MBANow: MBA SVP Pete Mills on Reforming CFPB
The Mortgage Bankers Association released a new MBANow video featuring MBA Senior Vice President of Residential Policy and Member Engagement Pete Mills, who discusses a new MBA white paper, CFPB 2.0: Advancing Consumer Protection.
The video can be viewed at https://www.youtube.com/watch?v=865dk6YKFKI&feature=em-uploademail.
The paper (http://mba.org/CFPBv2), released last week, examines the approach of the Consumer Financial Protection Bureau during its first five years of undertaking enforcement actions in key areas–including actions that clearly departed from prior published interpretations–without providing sufficient supervisory guidance to the industry in advance. It offers eight recommendations to improve consumer protections while lessening the regulatory burden placed on mortgage lenders and servicers.
Mills noted the CFPB was created seven years ago under the Dodd-Frank Act and has been operational for five years. He said it made sense to undertake an evaluation of the CFPB and to look at ways to make it more efficient and to counter what MBA calls a culture of “regulation by enforcement,” which Mills said creates confusion and uncertainty.
“What the industry really needs at this point in time is clear guidance–not just the rules, but clear guidance on the Bureau’s expectations for how to comply,” Mills said. “The paper comes up with a series of recommendations that will push past what we call the regulation by enforcement paradigm and move us into a more guidance-driven supervisory approach.”
Recommendations include providing clear written guidance; Mills noted, for example, that the CFPB has on occasion taken “novel” approaches to interpreting the Real Estate Settlement Procedures Act. “It’s hard to look at an enforcement order, which is a specific set of facts, and apply those to your business,” he said. “You [as a lender] may have a different fact pattern.”
Mills said MBA views the paper in two ways. “It’s a road map for the existing Bureau; it’s a road map for a new Director if and when that occurs,” he said. “Congress is looking at a variety of CFPB-related reforms and we look at this as a road map for Congress potentially to use to implement some common-sense reforms.”
Other videos in the MBANow series can be viewed at the MBA YouTube channel, https://www.youtube.com/watch?v=Swk2VUJeZFI&feature=em-uploademail. The videos are also available on the MBA Insights landing page, https://www.mba.org/publications/insights/insights-publication##SubscriberID####RND##&PageID=21109.
