It’s Time For The CFPB To Take A Breather

August 17, 2012 at 7:30 am Leave a comment

This morning I have to channel my inner Roberto Duran and say “No Mas!”  I pride myself on keeping up with the latest regulatory proposals, but like Roberto Duran who was getting so pummeled by Sugar Ray Leonard that he threw up his hands, proclaimed “No Mas” and walked out of the fight, I am officially pleading with regulators to slow down! 

In the past week, our good friends at the CFPB have issued proposals on preemption of gift card regulations, regulation of the servicing industry, high cost appraisals (this one was done jointly with the other financial regulators), and formally posted regulations on HOEPA loans to the Federal Register.  Mind you, this is just a fraction of the proposals the CFPB has out there on a wide range of issues. 

The CFPB will tell anyone who will listen that it is a model of regulatory oversight for this century.  But in its rush to get stuff done, it increasingly seems that the public input part of its responsibilities is the one it cares least about.  It is almost as if the behavioral economists who started up the Bureau knew exactly what they were going to do the day they began and aren’t going to let people get in the way of implementing regs that are in the best interest of the American consumer, whether she knows it or not.  For example, CFPB started the clock running on the comment period for its HOEPA amendments in mid-July with a due date of September 7, even though the proposal wasn’t entered into the Federal Register until a few days ago.  To be fair, the CFPB recognizes that this proposal, in conjunction with its other proposed amendments to Regulation Z, will have a big impact on the mortgage industry by redefining APRs in such a way that your mortgages are going to look more expensive than they do today. 

This is a big deal and the CFPB has indicated it is going to take this into account when determining when these new regulations should take affect.  But given what it perceives as its importance to consumers, it is trying to get this proposal finalized as quickly as possible.  This makes sense if you already have your mind made up, and in fairness to the CFPB, many of its most onerous proposals are mandated by the Dodd-Frank Act.  But the Bureau was given wide discretion in promulgating the regulations and in its rush to remake the mortgage industry before Richard Cordray’s recess appointment ends in January, it is making it impossible for industry stakeholders to properly scrutinize proposals that are going to have a huge impact on mortgage lending.

Entry filed under: Advocacy, Compliance, Regulatory. Tags: , , , , , , , , .

More Lending Guidance On gambling and the CFPB. . .

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Authored By:

Henry Meier, Esq., General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association.

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