Rhode Island Enacts New Capital and Governance Standards for Nonbank Mortgage Servicers

Rhode Island has enacted new financial and governance requirements for certain nonbank mortgage servicers. The legislation reflects a broader trend among states to strengthen oversight of mortgage servicing operations.

On June 23, 2026, Governor Dan McKee signed Senate Bill 3075 (S 3075) into law. The legislation establishes minimum standards for capital, liquidity, corporate governance, risk management, and regulatory reporting for qualifying nonbank mortgage servicers. The law took effect immediately upon passage.

The measure is designed to strengthen the financial resilience and operational oversight of larger mortgage servicers while aligning many state requirements with existing federal housing finance standards.

Which Mortgage Servicers Are Covered?

The law applies to a defined group of “covered mortgage servicers.”

Under the legislation, a covered mortgage servicer is a nonbank company that services or subservices 2,000 or more one-to-four-unit residential mortgage loans for other entities and operates in two or more U.S. states, districts, or territories.

The calculation excludes whole loans owned by the servicer as well as loans that are being serviced on an interim basis before they are sold.

Certain organizations are exempt from the law’s financial-condition requirements, including nonprofit mortgage servicers, housing finance agencies, and companies engaged exclusively in reverse mortgage servicing.

Capital and Liquidity Requirements

One of the law’s primary objectives is to establish minimum financial standards for covered servicers.

The legislation requires qualifying companies to maintain appropriate levels of capital and liquidity in accordance with Generally Accepted Accounting Principles (GAAP).

To provide consistency with existing federal standards, the law creates a safe harbor for servicers that satisfy the Federal Housing Finance Agency (FHFA) eligibility requirements applicable to enterprise single-family sellers/servicers. The safe harbor applies to requirements involving capital, net worth ratios, and liquidity, regardless of whether the servicer currently performs servicing for a government-sponsored enterprise.

In addition, covered servicers must adopt written policies governing capital management, servicing liquidity, and operating liquidity. Those policies must be appropriate for the size, complexity, and sophistication of the institution.

New Corporate Governance Obligations

The legislation also introduces formal governance requirements for covered mortgage servicers.

Each qualifying company must establish a board of directors responsible for overseeing the organization’s corporate governance framework.

Among its responsibilities, the board must:

• Maintain written governance policies and appropriate internal controls.
• Monitor compliance with Rhode Island law and the organization’s governance framework.
• Ensure timely and accurate regulatory reporting, including submission of the Nationwide Multistate Licensing System (NMLS) Mortgage Call Report.

The law also requires boards to establish internal audit standards that reflect the organization’s size, operational complexity, and overall risk profile.

Annual Audits and Risk Management

In addition to governance requirements, covered servicers must undergo an annual independent external audit.

The audit must evaluate several areas, including:

• Internal control systems.
• Tangible net worth calculations.
• Mortgage servicing rights valuation.
• Risk management controls.

The legislation further requires each covered servicer to maintain a comprehensive enterprise risk management program.

The program must address multiple categories of risk, including:

• Credit risk.
• Liquidity risk.
• Operational risk.
• Market risk.
• Legal risk.
• Reputational risk.

Servicers must also perform an annual risk assessment and present the results to their board of directors.

Regulatory Flexibility

The legislation grants Rhode Island’s banking regulator authority to adjust supervisory requirements based on a servicer’s risk profile.

If a covered servicer is determined to present an “extremely high” level of risk, the regulator may impose additional conditions beyond those established in the statute.

Conversely, the regulator may waive certain requirements for organizations determined to present an “extremely low” level of risk.

The law also authorizes the temporary suspension of certain provisions during significant economic disruptions or extraordinary environmental or societal events when regulatory flexibility may be warranted.

What the Law Means for Servicers

For covered nonbank mortgage servicers operating in Rhode Island, the law introduces new ongoing compliance obligations. Affected organizations may need to review their capital and liquidity policies, corporate governance frameworks, internal audit procedures, and enterprise risk management programs to ensure they comply with the new statutory requirements.

Servicers that already satisfy the Federal Housing Finance Agency (FHFA) financial eligibility standards for enterprise single-family sellers/servicers may benefit from the law’s safe harbor provisions. However, covered institutions must still comply with the legislation’s governance, reporting, audit, and risk management requirements where applicable.

Looking Ahead

The new requirements take effect immediately and may require affected mortgage servicers operating in Rhode Island to review their capital planning, liquidity management, governance frameworks, audit programs, and enterprise risk management processes.

For qualifying nonbank servicers, the legislation expands regulatory expectations beyond financial strength alone by placing emphasis on board oversight, internal controls, and comprehensive risk management.

As additional states continue evaluating supervisory standards for nonbank mortgage servicers, Rhode Island’s approach represents another step toward more standardized oversight of mortgage servicing operations across the United States.