Legal Seminar

1-4(ii) 3 and Section 4-8.1A(b) of the Residential Mortgage License Act of 1987 4 [5 ILCS 140/7(1)(a); 205 ILCS 635/1-4(ii), 4-8.1A(b)].” On April 3 rd , 2020, Ms. Rubin filed a request for review of the Department’s determination with the Public Access Counselor in the Illinois Attorney General’s Office. In the letter accompanying the request for review, Ms. Rubin asserted that the Department failed to provide any legal or factual basis to support its allegation that any of the exemptions cited above are, in fact, applicable to these records. Without addressing the adequacy of the Department’s response to the FOIA request, as explained below, it is the opinion of CSBS that, in light of the confidentiality provisions of the SAFE Act, the Department acted properly in relying on Section (7)(1)(a) of FOIA, Section 1-4(ii) and Section 4-8.1A(b) of the Residential Mortgage License Act of 1987 [5 ILCS 140/7(1)(a); 205 ILCS 635/1-4(ii), 4-8.1A(b)] to deny the FOIA request. In 2008, Congress enacted the SAFE Act to, as stated in section 1502 [12 U.S.C. 5101], encourage “. . . the States, through the Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators, . . . to establish a Nationwide Mortgage Licensing System and Registry for the residential mortgage industry.” The purpose of establishing the NMLS was “. . . to increase uniformity, reduce regulatory burden, enhance consumer protection, and reduce fraud . . .”. Section 1502 lists several objectives that NMLS was intended to accomplish, including “(3) Aggregat[ing] and improv[ing] the flow of information to and between regulators.” To accomplish this information sharing objective, in section 1512 [12 U.S.C. 5111], the SAFE Act permitted federal and state agencies to share information about mortgage licensing without the loss of privilege or confidentiality and also preempted state laws that would provide a weaker privilege or less confidentiality. Section 1512(a) provides for the continued application of any requirement under Federal or State law regarding the confidentiality of any information provided to the NMLS and any privilege arising under Federal or State law with respect to such information after such information has been disclosed to the NMLS or shared with any State or Federal regulatory officials with mortgage or financial services industry oversight authority. 5 3 Section 1-4(ii) of the Residential Mortgage License Act of 1987 states: (ii) “Confidential supervisory information” means any report of examination, visitation, or investigation prepared by the Commissioner under this act, any report of examination visitation, or investigation prepared by the state regulatory authority of another state that examines a licensee, any document or record prepared or obtained in connection with or relating to any examination, visitation, or investigation, and any record prepared or obtained by the Commissioner to the extent that the record summarizes or contains information derived from any report, document, or record described in this subsection. “Confidential supervisory information” does not include any information or record routinely prepared by a licensee and maintained in the ordinary course of business or any information or record that is required to be made publicly available pursuant to State or federal law or rule. 4 Section 4-8.1A(b) of the Residential Mortgage License Act of 1987 states in pertinent part: (b) In order to promote more effective regulation and reduce regulatory burden through supervisory information sharing, the Director is authorized to enter agreements or sharing arrangements with other governmental agencies, the Conference of State Bank Supervisors, the American Association of Residential Mortgage Regulators or other associations representing governmental agencies as established by rule, regulation or order of the Director. The sharing of confidential supervisory information or any information or material described in subsection (a) of this Section pursuant to an agreement or sharing arrangement shall not result in the loss of privilege or the loss of confidentiality protections provided by federal law or state law. 5 Section 1512(a) of the SAFE Act [12 USC 5111] states: