Advocacy Update: CFPB Lays Off 1,400, Court to Hear Injunction Request
CFPB Lays Off 1,400, Court to Hear Injunction Request
Thursday afternoon, employees at the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) began receiving termination notices pursuant to a Bureau Reduction-in-Force plan. Media reports indicate that more than 1400 employees received the notice.
Go deeper: The scope of layoffs is larger than expected. Recent discussions with the administration indicated that while the Bureau would certainly shrink, it would maintain sufficient resources to conduct core statutory functions, including rule writing capabilities in order revise and reform certain Chopra- and Cordray-era rules, and sustaining at least baseline levels of supervision, enforcement, and market monitoring functions required by statute.
Why it matters: With an estimated 200 employees remaining, it is unclear how CFPB will sustain core functions related to writing and revising rules and conducting supervision and enforcement. A separate internal memorandum that surfaced yesterday outlining the CFPB’s supervisory and enforcement priorities indicates that the Bureau will rely heavily on the supervisory functions of the states and federal prudential regulators.
• MBA has urged the administration to also maintain sufficient resources to address the need to review and revise many mortgage-related rules, such as pending Reg X servicing rules, loan officer compensation rules and MBA’s RESPA reform recommendations.
What’s next: This is an evolving story. A court hearing today – and subsequent appeals – may impact the scope and timing of yesterday’s layoffs.
For more information, please contact Pete Mills at (202) 557-2878.
FHA Fast Tracks End of COVID-Era Loss Mitigation Waterfall
On Tuesday, the Federal Housing Administration (FHA) released Mortgagee Letter 2025-12, Tightening and Expediting Implementation of the New Permanent Loss Mitigation Options, which sunsets FHA’s COVID-19 era loss mitigation waterfall and accelerates the effective date of the permanent loss mitigation guidance (originally in ML 2025-06) with modifications. Mortgage servicers must now adopt FHA’s new loss mitigation policy earlier than expected, including two safeguards – a cap on the frequency of loss mitigation options a borrower can receive and required Trial Payment Plans for all permanent options – intended to improve the sustainability of FHA’s loss mitigation policies.
Go deeper: Specifically, ML 25-12 made the following changes to its previous permanent loss mitigation guidance.
• Accelerates the sunset of the COVID-19 Loss Mitigation Options to September 30, 2025;
• Moves up the effective date of the new permanent loss mitigation options to October 1, 2025 from February 2, 2026;
• Ends FHA-HAMP effective September 30, 2025;
• Extends the time on the eligibility of a borrower for a subsequent permanent loss mitigation option to once every 24 months, from once every 18 months; and
• Cancels the scheduled increases in borrower compensation ($7,500) under FHA’s Pre-foreclosure Sale Program, Deed-in-Lieu of Foreclosure disposition options, and Cash for Keys incentives, maintaining the current amounts ($3,000).
Why it matters: Consistent with MBA’s previous recommendations, FHA’s announcement notably and concretely preserves access to streamline loss mitigation for struggling borrowers by retiring FHA-HAMP, FHA’s pre-COVID loss mitigation program that required borrowers to submit exhaustive application documents. Additionally, adopting stronger loss mitigation guardrails earlier allows FHA to limit serial forbearance and modification requests that have plagued FHA’s redefault rates and poor program performance. Now, FHA can evaluate the long-term effectiveness of its loss mitigation guidance with these additional safeguards in place.
What they’re saying: MBA’s President and CEO Bob Broeksmit, CMB, released the following statement on the new loss mitigation safeguards: “MBA welcomes FHA’s adoption of a new, permanent loss mitigation framework, which will help evaluate performance and ensure the protection of the [MMIF]. . . Together, these safeguards will improve sustainability, protect the FHA insurance fund, preserve borrower equity, and further align FHA with the GSEs.”
What’s next: MBA will continue to monitor and communicate any new loss mitigation policy developments from FHA, including decisions regarding the Payment Supplement. In the announcement, FHA says that the agency will review their entire permanent loss mitigation waterfall, including the Payment Supplement, to ensure the policy, “protects taxpayers while mitigating financial risks to the Mutual Mortgage Insurance Fund (MMIF).”
For more information, please contact Brendan Kelleher at (202) 557-2779.
MBA Again Leads Coalition Effort to Build Support for Trigger Leads Fix
Last week, MBA led a coalition of major industry trade groups and consumer advocates in sending a letter in support of the recently re-introduced (and slightly revised) version of the Homebuyers Privacy Protection Act (H.R. 2808 and S. 1467) to House Financial Services and Senate Banking Committee leaders – urging them to take swift committee action on the measure.
• The legislation has again been offered (and re-crafted) by Reps. John Rose (R-TN) and Ritchie Torres (D-NY) and Senators Bill Hagerty (R-TN) and Jack Reed (D-RI) – the same bipartisan/bicameral combination of champions who introduced companion legislation during the last Congress. A substantially similar bill passed the full Senate last year by Unanimous Consent.
Why it matters: Consumers remain vulnerable to trigger leads abuses – most prominently through receiving an excessive number of phone calls and/or texts after their credit is “pulled” as part of a real estate transaction. The reintroduction of the two bills reignites the debate to curb the abusive use of mortgage credit trigger leads, other than in appropriately limited circumstances (such as existing customer relationships).
What’s next: MBA will continue our efforts to work with a diverse set of coalition partners – and our congressional allies – to advance this needed legislative fix.
Go deeper: Take action through the Mortgage Action Alliance (MAA) channel and tell your elected officials to co-sponsor – and push for swift action on – H.R. 2808 and S. 1467!
For more information, please contact Madisyn Rhone at (202) 557-2741, Rachel Kelley at (202) 557- 2816, Ethan Saxon at (202) 557-2913 or George Rogers at (202) 557-2797.
MBA Submits Coalition Letter on FCC Deregulation Initiative
Last Friday, MBA and other trades sent a joint letter in response to the Federal Communications Commission’s (FCC) notice seeking comment on every rule, regulation, or guidance document that the FCC should eliminate for the purposes of alleviating unnecessary regulatory burdens.
In the letter, the coalition urges the FCC to take some of the following actions:
• Revise its February 2024 order on revocation of consent to ensure callers and text senders can accurately and efficiently process customer requests to revoke consent to receive autodialed or prerecorded voice calls.
• Remove the limitation, adopted in 2022, that permits callers to place, over a 30-day period, only three exempt informational prerecorded or artificial voice calls to residential numbers.
• Remove, from the Commission’s 2015 order, the condition that permits a caller to place an exempt fraud alert or data breach notification (among other categories of calls exempted) only if the call is placed to a number that was provided by the customer.
Why it matters: MBA has previously weighed in on these issues. Efficient, effective customer communications are essential if banks, credit unions, other financial services providers, and other businesses are to serve their customers and comply with their regulatory obligations. Our members need to be able to efficiently send time-critical, non-telemarketing communications to large numbers of customers promptly.
Go deeper: These communications include suspicious activity alerts (also known as “fraud alerts”), fee avoidance alerts, data security breach notifications, and communications to service the customer’s account (for financial institutions). However, certain Commission rules implementing the Telephone Consumer Protection Act (TCPA) impair businesses’ ability to place these consumer-beneficial calls and messages.
• Congress enacted the TCPA to combat abusive telemarketing practices – and not to create “a barrier to the normal, expected or desired communications between businesses and their customers,” the letter notes. In 2021, the Supreme Court in Facebook v. Duguid confirmed that the TCPA’s restrictions apply only to the abusive telemarketing practices targeted by the Act – i.e., telemarketers’ practice of calling randomly or sequentially drawn numbers of consumers – and they do not apply to calls placed by legitimate businesses to stored lists of customer numbers.
• Despite this precedent and the TCPA’s legislative history, certain Commission rules incorrectly restrict the non-telemarketing (informational) calls that banks, credit unions, other financial services providers place to their customers.
What’s next: MBA will continue to monitor the FCC’s response to this initiative and provide any relevant updates.
For more information, please contact Alisha Sears at (202) 557-2930.
Trump Administration Releases New Executive Order Calling for the Repeal of “Unlawful Regulations”
On Thursday, President Donald Trump issued an executive order (EO), Directing the Repeal of Unlawful Regulations, which orders federal agencies to repeal any regulation, or parts of regulations, that exceeds the agency’s statutory authority or is otherwise unlawful given recent Supreme Court precedent. These rescissions are to take place following the 60-day review period ordered in Executive Order 14219, which called on federal agencies to identify unlawful and potentially unlawful regulations.
• Additionally, a federal agency that does not repeal a rule they identified as unlawful must explain why they did not do so to the Office of Information and Regulatory Affairs.
Go deeper: Notably, the EO says that in promulgating rules that repeal existing rules, “agency heads shall finalize rules without notice and comment, where doing so is consistent with the ‘good cause’ exception in the Administrative Procedure Act.” This exception allows agencies to bypass the normal notice and comment rulemaking process when doing so would be “impracticable, unnecessary, or contrary to the public interest.”
• The EO explains, “[r]etaining and enforcing facially unlawful regulations is clearly contrary to the public interest. Furthermore, notice-and-comment proceedings are ‘unnecessary’ where repeal is required as a matter of law to ensure consistency with a ruling of the United States Supreme Court.”
What’s next: MBA will provide comments outlining which rules should be considered for recission in response to the accompanying request for information from the Office of Budget and Management.
For more information, please contact Justin Wiseman at (202) 557- 2854 or Alisha Sears at (202) 557-2390.
CFPB Announces Pause in Enforcement of Nonbank Registry Rule
Last Friday, the CFPB announced that it is not prioritizing supervision and enforcement of nonbanks with regard to entities that do not satisfy future deadlines under its Nonbank Registration Regulation, finalized in 2024–including the deadline upcoming on April 14th.
• The CFPB stated that the “policy applies to, but is not limited to, the upcoming April 14, 2025, registration deadline for entities subject to 12 CFR 1092.206(a)(2) and July 14, 2025, registration deadline for entities subject to 12 CFR 1092.206(a)(3).”
• The Bureau will “instead continue to focus its enforcement and supervision activities on pressing threats to consumers,” and is “further considering issuing a notice of proposed rulemaking (NPR) to rescind the regulation or narrow its scope.”
• State regulators and state AGs could still enforce this so, members are advised to consult with counsel.
Why it matters: MBA repeatedly voiced its concerns (see March 2023 letter) regarding the regulation’s costly and duplicative reporting framework and appreciates the CFPB’s announcement. MBA also urged the Trump administration to delay the upcoming reporting deadlines to provide the CFPB with adequate time to reconsider the costs and statutory basis for the database.
• MBA has stressed that the CFPB could have instead added its enforcement information on mortgage companies to the already comprehensive consumer-facing database maintained by the Conference of State Bank Supervisors’ NMLS Consumer Access portal.
What’s next: MBA will monitor the CFPB’s next steps and will advocate for them to consider issuing an NPR to rescind the regulation.
For more information, please contact Justin Wiseman at (202) 557- 2854 or Alisha Sears at (202) 557-2390.
Upcoming MBA Education Webinars on Critical Industry Issues
MBA Education continues to deliver timely single-family programming that covers the spectrum of challenges, obstacles and solutions pertaining to our industry. Below, please see a list of upcoming and recent webinars – all complimentary to MBA members:
• Social Media Compliance: Identifying Potential RESPA Violations in Digital Advertising – April 22
• Building Efficiencies into the Mortgage Lending Workflow – April 23
• Key Federal Regulations and Emerging Regulatory Trends for Lead Generation – April 29
• Cybersecurity in Mortgage, Part I: Review of Recent Trends and the Current Landscape – May 6
• Tech Trends Shaping the Future of Mortgage Lending – May 13
• Defeating New Servicing Challenges with AI and Automation – April 15
MBA members can register for any of the above events and view recent webinar recordings by clicking here.
For more information, please contact David Upbin at (202) 557-2931.
