|Mortgage brokers and bankers regulated by the New York State Banking Department are now responsible for paying assessment fees to cover the costs of the department’s supervision. The increased fees follow the loss of revenue from two banks that moved to a national charter.
According to a speech given earlier this year by the Superintendent of Banks Diana Taylor, the mortgage industry was not required to pay for the cost of regulated supervision by the department until now.
“So, with the notable exception of certain examination fees, my Department’s functions and efforts on your behalf,” Taylor told the New York Association of Mortgage Brokers, “were subsidized entirely by the depository institutions.”
Taylor said mortgage bankers and brokers assessments will make up about $14.2 million of the $80 million budget, noting a 30% (approximately $24 million) loss of budget revenue resulting from J.P. Morgan Chase and HSBC moving “from a state charter to a national charter.”
Assessments are based on the time spent to supervise each entity, she explained, and relative overhead costs are proportionately divided as well. Taylor added that the Department is streamlining its procedures to provide “better, more efficient service.”
“And if nothing else, I think that you’ll agree that our new system of allocating assessments across ALL the institutions we regulate is fair,” Taylor concluded, “and you will see that you will get your — not the depository institutions — your money’s worth.
Taylor said that the Department solicited input from each of the industry groups prior to finalizing the assessment procedure. “I think everybody has been great about realizing what kind of problem we had,” she told MortgageDaily.com. “We had to do this, under any circumstances, and I’m very appreciative of how everyone has been.”
She added that they are cutting the Department’s budget by 10 percent this year.
Despite the new assessment fees, Department spokesperson Kori-Ann Taylor said they have received 255 broker applications and 44 banker applications this year. “We are not seeing a decrease,” Taylor said in response to a recent public comment that the assessments would impact the mortgage industry. “If anything, we are seeing a substantial increase.”
Paula Parisot is a MortgageDaily.com feature reporter and a blogger at CloserBlog.com who has also worked in the mortgage industry.
Email Paula at: PaulaParisot@MortgageDaily.com
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