NMLS 2019: Conference Overview

The 11th Annual NMLS Conference, held in Orlando, FL had a strong showing with nearly 675 attendees, nearly identical to last year which was a record year for the conference. Out of the 54 States and US Territories, only New Jersey and US Virgin Islands didn’t register, once again showing strong industry participation. This year’s conference had a strong focus placed on the complexity of ongoing compliance and the development of the NMLS 2.0 System to aid and improve the system’s service while enhancing user engagement. In 2015, the CSBS had been tasked to redesign the NMLS 1.0 into a “low-code” platform, easing future development and providing long-term savings for system upkeep and future releases. While the RFP was released in 2015, it wasn’t until Q1 of 2017 that PricewaterhouseCoopers (PWC) was retained to gather the requirements of each user group to create improvements to workflows, functionality and future integrations.

For nearly the last six months, a subcontracted group, Groundswell Consulting, has been providing mock-ups or “prototyping” for the NMLS 2.0 System. Industry has participated on multiple calls or demonstrations showing many proposed changes. Groundswell has also been developing the State Examination System (SES), which is a companion service to the NMLS for examination. While the system continues developing, this time allows for significant input by Industry to create improvements to the expected 2.0 system of record.

Changes to the Electronic Surety Bonds (ESB)

This was the 8th year that the ESB product was highlighted during the conference with two breakout sessions showcasing functionality expected in the 2.0 release. The panel was moderated by a CSBS Staff member, Phil Whims, with Tabitha Butts, a Senior Licensing Analyst at the Indiana Department of Financial Institutions, Sarah Bloome, an Underwriting Consultant with Liberty Mutual Surety, and Corban Enns, founder of Surety Solutions, a Gallagher Company.

Electronic Surety Bond Session at NMLS 2019

ESB session at NMLS 2019: (left to right)  Corban Enns, Sarah Bloome, Tabitha Butts and Phil Whims.

The session highlighted the current engagement of the industry with over 26,000 active electronic surety bonds recorded in the system. These bonds are spread out through 33 different licensing agencies, out of 64 possible (51%), making up 247 various licenses out of a possible 751 (33%). Ms. Butts highlighted Indiana’s use of the ESB and the improvements provided to their workflows, security and efficiencies for their license management. Mr. Enns used a case study showing the audience just how much money the ESB solution saves industry every year in shipping costs alone when utilizing the ESB solution over the traditional hard copy bonds. Summary of the equation is provided below;

Estimated Overnight Shipping Cost ESBs Recorded in NMLS    X    Two Deliveries    X     #of ESBs Recorded in NMLS

$9-25 X 2 X 26,000 = $468,000 – $1,300,000

For 2018, over $1M in estimated savings were received by the industry for shipping costs alone just for the single issuance of a bond. These savings didn’t account for any potential riders, continuation certificates or verification certificates. Mr. Enns stressed that the NMLS functionality is a material saving for the industry and one that regulators who are not actively participating should strongly consider. As the ESB is not a mandatory function within the NMLS, the theme of this years’ ESB Session was strongly focused on future adoption based on the 51% adoption rate by regulators.

Audience members representing all use groups who attended the ESB Session confirmed the ESB process, while difficult to get started, has saved a tremendous amount of time and resources for active participants. Further encouragement was made for those regulatory groups not yet using the ESB service.

In 2018, the industry has saved over $1M in shipping costs by using ESB.

Mr. Whims concluded the session with a high-level demo of some of the new functionality achieved within the NMLS as well as the changes to the development cycle using a low­ code methodology. The current AGILE development cycle allows the contracted group to push new releases much faster for feedback and industry opinion. However, this method does require more consistent feedback on improvements to the latest developments or services.

Finally, Surety Solutions, A Gallagher Company hosted three industry dinners throughout the conference. Over 50 mortgage companies were in attendance and over 1,200 years of collective industry experience. Once again, the value of relationships, depth of industry knowledge and continual pursuit of industry improvements were present.

It was another successful conference for the industry with valuable information presented during the sessions. However, the greatest value perceived this year was the continual networking with other industry professionals and the regulators at large. This is still a highly relational industry, and it takes time to cultivate and deepen those relationships. Continual effort will be put forth by the CSBS, panel members and Surety Solutions, A Gallagher Company to ensure that future value continues to be experienced from this conference.

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