This Report was prepared pursuant to Title 6.2, Chapter 17, § 6.2-1720 D of the Code of Virginia (“Code"), which directs the State Corporation Commission ("Commission") to:

• annually review the proposed budget, fees, and audited financial statements of the State Regulatory Registry LLC ("SRR");

• annually, to the extent practicable, report to the House and Senate Committees on Commerce and Labor on the operations of SRR, including compliance with its established protocols for securing and safeguarding personal information in SRR;

• to the extent practicable, prepare, publicly announce and publish a report by no later than July 1 of each year that summarizes statistical test results and demographic information to be prepared by SRR or its test administrator; and

• report violations of this chapter, any enforcement actions thereunder, and other relevant information to SRR on a regular basis.

On behalf of the Commission, its Bureau of Financial Institutions ("Bureau") is pleased to submit this report on the 2018 operations of SRR and the Nationwide Mortgage Licensing System and Registry ("NMLS").

SRR is a non-profit subsidiary of the Conference of State Bank Supervisors (“CSBS"), a national organization which advances the quality and effectiveness of regulation and supervision of state banking and financial services, that operates the NMLS on behalf of state financial services regulatory agencies and carries out mortgage loan originator (“MLO") education requirements and testing under the Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (“SAFE Act"). NMLS is the system of record for non-depository financial services licensing or registration, including the licensure of mortgage companies, in participating state agencies, the District of Columbia, and the U.S. territories of Puerto Rico, Virgin Islands, and Guam. As of December 31, 2018, SRR reported audited total assets of $150.6 million and net income of $12.7 million. The certified public accounting firm of Tate & Tryon issued a “Clean" or Unqualified Opinion of SRR, and the financial statements and budgets appear to be accurate and reasonable. The Bureau does not take issue with the disclosures therein.

In 2018, SRR achieved significant milestones in managing its MLO testing and education programs. Those highlights include: a new education management system was designed, developed and launched and all 59 state mortgage agencies now accept its national test (“National Test") to satisfy their testing requirements. During 2018, approximately 41,000 MLO test components were administered by SRR. At the end of 2018, NMLS was the system of record for 63 state and territorial agencies, managing a total of 461 different license authorities covering a broad range of non-depository financial services. Virginia had 4,448 individuals apply to be licensed in the Commonwealth after taking and passing the National Test and 3,677 of those individuals were approved. SRR did not experience any material issues related to NMLS security, privacy, or information breach in 2018. In addition, SRR was not subject to any significant litigation in 2018.