MBA Offers Recommendations on CFPB Draft Strategic Plan

The Mortgage Bankers Association offered comments and recommendations to the Consumer Financial Protection Bureau on its Draft Strategic Plan for Fiscal Years 2018-2022.

The Draft Strategic Plan (https://s3.amazonaws.com/files.consumerfinance.gov/f/documents/cfpb_draft-strategic-plan_fy-2018-2022.pdf), issued Oct. 18, articulates four goals:

–Prevent financial harm to consumers while promoting good practices that work for consumers, responsible providers and the economy as a whole;
–Empower consumers to make informed financial choices to reach their own life goals and enhance their own financial well-being;
–Inform the public, policymakers and the CFPB’s own policymaking with market intelligence and data-driven analysis of consumer financial markets and consumer behavior; and
–Advance the CFPB’s performance by maximizing resource productivity.

MBA Senior Vice President, Public Policy & Industry Relations Stephen O’Connor said during the past five years, the Bureau has accomplished both building out the agency’s functions, including enforcement, supervision and rulemaking, and issuing comprehensive new and revised rules applicable to the mortgage market. “In 2017, the CFPB is at an inflection point, when it can now pivot and focus its resources on providing supervision and binding, authoritative guidance that helps responsible parties, including those in the mortgage industry, comply with the new rules of the road, while limiting enforcement to the actors operating without regard for clearly delineated and well-illustrated rules established by CFPB,” he said.

O’Connor noted the CFPB repeatedly references throughout the strategic plan a desire to promulgate “data-driven regulation.” He said this approach is appropriate as good regulation should be informed by diverse sources of data and qualitative perspectives of stakeholders.

“As the CFPB seeks information to inform its regulation or other endeavors, it should be mindful of both the burden of its requests and the implications for consumer privacy,” the letter said. “Data collection requests should be public and allow for advance feedback on the breadth and scope, including the impact on consumer privacy, before the Bureau issues official requests to industry. Such feedback will allow for tailored requests that are effective but do not create unanticipated or inequitable burdens on industry or unwarranted invasions of consumer privacy.”

The MBA letter draws on key concepts from MBA’s recent review of the CFPB’s history and its recommendations for the Bureau’s future, CFPB 2.0: Advancing Consumer Protection (www.mba.org/CFBPv2).

The letter offers the following specific recommendations to the CFPB:

–Develop a framework for providing guidance, and under that framework, publish timely, binding written guidance, without disclaimers, that achieves broad stakeholder engagement without formal notice-and-comment procedures;

–Expand the “no action” letter program to clarify regulatory ambiguities, to ensure that new technology benefits consumers and industry alike;

–Use its supervision program to avoid harm to consumers and encourage responsible actors in the markets it regulates through non-public actions and guidance;

–Target enforcement actions at those who violate established rules and statutes, rather than using enforcement to announce new legal standards;

–Improve fairness in enforcement by permitting institutions to disclose receipt of Bureau enforcement demands and requests, publish a matrix showing how civil money penalties are calculated; and institute a process for moving a potential matter from enforcement to non-public supervisory resolution.

“With large rulemakings completed and a mature supervision program, the Bureau can reboot its approach to consumer protection in the mortgage market,” MBA said. “Authoritative written guidance and supervision will be far more efficient means of helping the industry understand and implement the Bureau’s expectations for consumers in the mortgage market than consent orders and enforcement actions.”