MBA White Paper Considers Changes to CFPB Operating Procedures

September 13, 2017
The Consumer Financial Protection Bureau (CFPB) has issued a Request for Information (RFI) to encourage comment and insight on the agency’s enforcement processes
The Mortgage Bankers Association (MBA) is considering the future of the Consumer Financial Protection Bureau (CFPB) with a new white paper titled “CFPB 2.0: Advancing Consumer Protection,” which was prepared for the trade group by the law firm of Covington and Burling.
The white paper examines the CFPB’s first five years of pursuing enforcement actions, including actions that the MBA stated had “clearly departed from prior published interpretations—without providing sufficient supervisory guidance to the industry in advance.”
The white paper recommends that the CFPB follow the example set by other financial services regulators in providing “authoritative explanatory and clarifying guidance to the industry” while recommending potential changes to help strengthen its original consumer protection mission.
“The CFPB has done well where it’s developed rules that focus on the worst excesses of the pre-crisis market,” said David H. Stevens, President and CEO of MBA. “However, the Bureau has too-often opted for a ‘regulation by enforcement’ approach that uses enforcement actions, rather than written guidance, to communicate to the industry about practices it finds problematic. The CFPB can better protect consumers by publishing clear, consistent regulations and bright-line guidance like other regulators.”
Separately, the CFPB announced that its “recent supervisory actions” resulted in $14 million in relief to more than 104,000 harmed consumers during the first six months of this year. The agency complained that “one or more companies” overcharged and incorrectly charged consumers during the mortgage application and closing processes, while “one or more mortgage servicers” made errors in helping both borrowers paying their mortgages on time and at-risk borrowers.