The Conference of State Bank Supervisors and the American Association of Residential Mortgage Regulators are issuing nontraditional mortgage guidance for state-licensed mortgage bankers and brokers that is consistent with federal guidelines on originating interest-only and payment-option ARMs."At this stage of the game, it is very important to provide consistent guidance to all providers in the industry," said CSBS vice president Michael Stevens. Individual state regulators are planning to issue the guidance as best practices or regulatory bulletins to get it out quickly. Later the guidance will be translated into regulations or statutes, depending on the state. The state regulators pledged to work with their federal colleagues on improving the guidance if additional consumer protections are needed down the road. "We will do that together in cooperation with federal regulators," Mr. Stevens told reporters. Federal regulators issued guidance on nontraditional mortgages that applies to all federally insured banks and thrifts on Sept. 29.

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