Initiative Will Hold Nonbank Mortgage Lenders Accountable for Serving Their Whole Communities
New York State Department of Financial Services (DFS) Acting Superintendent Kaitlin Asrow today announced a new regulation to help ensure nonbank mortgage lenders are meeting the needs of the communities they serve. This expansion of New York’s Community Reinvestment Act (CRA) will hold these lenders accountable for providing fair and equitable access to home loans, especially for low- and moderate-income New Yorkers. In New York and across the country, nonbank mortgage lenders have significantly increased their share of the market, accounting for approximately 64% of mortgage originations nationwide in the second quarter of 2025, compared to 42% in 2014.*
Acting Superintendent Kaitlin Asrow said, “Banks have long been expected to meet the credit needs of the whole communities where they operate. Nonbank mortgage companies originate the majority of home loans nationwide, and New York is taking action to ensure that they are held to the same CRA standard.”
State Senate Banks Chair James Sanders Jr. said, “This announcement ensures that nonbank mortgage lenders will be held accountable just as traditional lenders have been. New Yorkers can now be confident that we are building a stronger and more fair economic system.”
Assembly Majority Leader Crystal Peoples-Stokes said, “This CRA expansion supports equitable access to home loan products for New Yorkers. With this initiative, New York continues to lift barriers to credit, which will grow investments and opportunities in our local communities.”
In November 2021, Governor Kathy Hochul signed vital legislation sponsored by State Senate Banks Chair James Sanders Jr. and Majority Leader Crystal Peoples-Stokes to update the state CRA to encourage major participants in the mortgage market to better serve any New Yorker who seeks to buy a home. With the existing CRA regulation for banks as a guide, this new regulation was developed with input from a wide range of stakeholders, including industry groups and consumer advocates, and tailored to the distinguishing characteristics of non-depository mortgage lending.
Non-depository mortgage bankers who have made at least 200 originations in the preceding year are subject to evaluation under the new regulation. As many nonbank mortgage companies do not have physical branches, the regulation provides that branchless lenders will be evaluated based on where they do a substantial portion of their business. A lending test will assess how well mortgage bankers serve all borrowers and neighborhoods within their assessment areas, particularly low- and moderate-income communities. Additionally, a service test will evaluate whether mortgage bankers offer programs and services that promote community development. Unlike banks, mortgage bankers will not be required to make community development investments or grants, recognizing the differences in how these institutions operate.
The final regulation will take effect July 7th, 2026. Visit the DFS website to review the regulation.
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*The Financial Stability Oversight Council, 2025 Annual Report.
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