What regulatory body can impose penalties on mortgage lenders in New Jersey?

The New Jersey Department of Banking and Insurance is the correct answer because it serves as the primary regulatory authority overseeing financial institutions, including mortgage lenders, within the state. This department is responsible for enforcing state banking laws, ensuring compliance with applicable regulations, and protecting consumers. When mortgage lenders violate these laws or regulations, the Department can impose penalties, fines, or take other enforcement actions to address the misconduct. This includes monitoring lending practices, licensing requirements, and conducting investigations into complaints.

In contrast, the Federal Reserve Bank's role is more focused on monetary policy and regulating national banks rather than state-specific mortgage lenders. The New Jersey Division of Consumer Affairs handles consumer protection issues generally, but it is not the primary body for the regulation of mortgage lending specifically. Lastly, the National Mortgage Licensing System primarily serves as a database for licensing mortgage loan originators and lenders but does not have regulatory authority to impose penalties, as this falls under state jurisdiction.