Rhode Island Governor Dan McKee signed Senate Bill 3075 on June 23, bringing sweeping new financial and governance requirements for nonbank mortgage servicers into immediate effect.
The legislation targets nonbank mortgage servicers that handle at least 2,000 one-to-four-unit residential mortgage loans for others and operate across at least two US states, districts, or territories.
Loans that are wholly owned by the servicer or being interim serviced ahead of sale are excluded from the threshold calculation used to determine coverage under the law.
Covered servicers are required to maintain capital and liquidity controls using generally accepted accounting principles and must hold written policies addressing capital, servicing liquidity, and operating liquidity.
Servicers that already meet applicable Federal Housing Finance Agency requirements will be deemed to satisfy the law’s capital, net worth, and liquidity standards, reducing the compliance burden for some firms.
The law also mandates board-level oversight, requiring a board of directors or an authorised equivalent body to supervise corporate governance, internal controls, legal compliance, and regulatory reporting, including the NMLS Mortgage Call Report.
Covered servicers must establish internal audit programmes, commission annual external audits, and maintain frameworks addressing credit, liquidity, operational, market, legal, and reputation risks.
State regulators are granted the authority to impose additional conditions on high-risk servicers, waive requirements for those assessed as low-risk, or temporarily suspend requirements during severe events.
Not-for-profit servicers, housing finance agencies, and servicers dealing solely in reverse mortgages are exempt from the financial-condition requirements set out under the new legislation.
Covered servicers must also conduct an annual risk-management assessment and present the findings directly to their board, reinforcing accountability at the highest level of corporate governance.
Legal analysts at Sheppard, Mullin, Richter and Hampton noted that Rhode Island’s new requirements form part of a broader trend of states imposing additional obligations on mortgage lenders and servicers across the country.
Because Senate Bill 3075 took effect immediately upon passage, covered servicers are advised to promptly review their capital, liquidity, governance, audit, reporting, and risk-management policies to ensure full compliance.
Multistate servicers in particular are urged to monitor other states for similar legislative developments and update their compliance programmes accordingly as the regulatory landscape continues to evolve.