What do National Mortgage Professional readers have to say about a potential downsizing or even elimination of the Consumer Financial Protection Bureau (CFPB)? We asked, and NMP readers told us.
And boy, did we get an earful.
Note that the CFPB has become a target for potential agency "deletion" under the second Trump Administration, with a reported "full work-stop" order from Acting Director Russell Vought — and even some CFPB employees alleging in a lawsuit there are plans to reduce the onetime 1,700-employee CFPB to a mere "five men in a room."
First, the breakdown: Out of a healthy total of 136 readers who took our survey, many chose not to identify their job positions. Some did, though, and of those, roughly 40% said they are mortgage loan officers, while about 60% said they’re mortgage bankers.
We asked the question: Do you agree with the CFPB being downsized? A majority — but not an overwhelming one — said yes, the agency ought to be slimmed down and streamlined. Specifically, 55% of survey respondents said the CFPB should be downsized, while 45% said it should not be.
But, many had much more to say. Far more telling were the additional, and often rather thoughtful, comments NMP received from readers, which illustrate a very wide divide indeed in opinions on this matter.
Comments Supporting The CFPB
“Sad,” one respondent wrote simply of a potential CFPB dismantling. “Just another step in the demise of America,” wrote another. One respondent said they were “angry” at the suggestion to dissolve the CFPB.
The loss of the CFPB would be “terrible for all consumers, and the economy,” commented one respondent. “Shuttering the agency will enable financial crimes and tank the housing industry,” another replied.
“I think everyone gets caught up in their own greed but we often forget that we are consumers just as much or more than we are loan originators,” wrote one respondent who identified as a loan officer. “Sure, we can make more money, but who’s going to protect it once we get it? Also, you’re already seeing real estate professionals posting false information and ‘baiting-and-switching’ clients.”
“False information is definitely hard to compete with, and we need agencies to watch over financial institutions that are bigger than us to protect this housing market, as there is not an easy fix to our affordable housing crisis,” the loan officer concluded.
“The CFPB was established because the industry could not adequately police itself,” wrote one respondent. “If it goes away, I would expect there to be a risk premium added in the secondary market to account for the increased probability of another mortgage meltdown due to unethical lenders taking advantage of borrowers for their own financial gain.”
“The CFPB is needed to prevent banks and other financial institutions from going back to the pre-2008 realm of ‘we'll do whatever we need to do to make money, and the customer doesn't matter,’” another respondent wrote. “The CFPB was enacted because the people that run financial institutions cannot be trusted to do the right thing (as evidenced by the large number of enforcement actions and lawsuits filed). This administration is violating the constitution as it guts consumer protections across the entire gamut of American life.”
“The CFPB needs to be properly staffed and funded and remain independent from any administration's attempts to close it down so we do not return to the pre-2008 ‘banks do whatever they want with no consequences’ era,” said one respondent.
Another claimed to feel “uncomfortable and angry” at a potential loss of the CFPB.
“I think it's ridiculous to close it. How is the general population to be protected by the bad actors in our industry?” a respondent asked.
“I use the CFPB’s website almost daily to ensure we're within federal regulations regarding mortgages and closings. It's a much-needed resource,” another respondent said in praise of the agency.
“I think the CFPB is a necessary watchdog for the financial industry. Although most players are putting forth their best effort to play by the rules, there are scoundrels, and the CFPB helped limit their effects,” said a respondent.
“Horrible,” was another respondent’s reaction to a potential CFPB demise.
“Another reason we should have never elected Trump. He doesn't have an ethical bone in his body,” a respondent contended.
Closing or heavily downsizing the CFPB “is outrageous and a conflict of interest and corruption in that this will only benefit the Trump-Musk billionaires who want to eliminate any government agency that scrutinizes their egregious conduct/ scams by eliminating the agencies that help/ protect the public and consumers so these billionaires can run amok!” wrote another respondent.
“It's a blow to the consumer, for whom the CFPB has acted as an arbiter of good behavior, tasking the banking and lending institutions to desist from exploitative and prejudicial acts. The demise of such an institution removes regulatory functions from every aspect of the lending industry,” a respondent claimed.
“In the four-plus decades I have been in the mortgage banking, banking, and real estate industry, industry has never self-regulated,” one respondent wrote. “Industry has just changed the name of the scheme, and found ways to drain consumers of every penny possible. Without the CFPB, industry will go farther, faster in their creativity to drive costs for any credit, mortgage, or real estate transaction. Good luck to consumers.”
“Closing the CFPB violates the Dodd-Frank Act and neglects the consumers it’s supposed to protect. Currently, there’s no oversight of consumer harm, which could lead us back to the 2008 financial crisis. Since the CFPB’s inception, they have returned over $20 billion to consumers. Closing the bureau will permit financial entities from the past to become repeat offenders and harm consumers,” a respondent wrote.
“No institution is perfect, but the CFPB's role in protecting consumers has greatly reduced predatory lending crimes. The Trump administration is fixed on protecting predators, which is frightening,” said another respondent.
Doing away with the CFPB “is a scam that Elon Musk and his hackers are just trying to do away with government agencies that protect consumers in order for their greedy corporations to get away with their wrongdoings. If they do away with the CFPB, they won’t stop — will they try to shut down/ dismantle the NMLS too?” worried another respondent.
“It is ridiculous” to remove the CFPB, emphasized another respondent. “CFPB creates guardrails for the mortgage industry. It stops us from spiraling out of control into another housing mortgage crisis. The CFPB was created in direct response to the 2008 mortgage crisis. Can it be improved or updated? Absolutely.”
“I know removing the CFPB will create more business for LOs and realtors,” the respondent continued. “However, in the long term, is it worth it if it means deregulating an already fragile mortgage economy? People are already purchasing homes up to a 57% debt-to-income on FHA files. So many new homeowners are ‘house broke.’ Even more people will get pre-qualified and take on mortgages they cannot afford with adjustable rates. Long-term homeowners will take out even more HELOCS and cash out refi’s since it'll be much easier to. Thousands will lose their homes. Who wins here? Huge corporations and wealthy individuals, who will swoop in and pick up handfuls of single-family residences selling for pennies on the dollar.”
“The CFPB is and has been an important instrument for all parties in the game to have a fair and grounded approach to do business,” wrote another respondent.
“The fact alone that approximately $29 billion has been recovered [by the CFPB] for the consumers is proof that this agency is doing their job well and created funding. Only crooks and cheaters want to abolish an agency like that,” another respondent wrote.
“Number 47 [i.e., President Donald Trump] has gone too far,” wrote one respondent. “The protections provided by the CFPB are part of government to protect its citizens against wrongdoers in the financial industry. God help us!”
Comments Against The CFPB
“Great news for the mortgage industry!” wrote one elated respondent regarding a removal or downsizing of the CFPB. Another similarly responded, “Great!” Still another echoed, “I think it’s a great idea.”
“Goody goody!!!” wrote one respondent who said "yes" to downsizing the CFPB, with no fewer than three exclamation points. “Good,” said another respondent, somewhat more subdued. “Wonderful. The best. Peachy!” responded an NMP reader.
“Fantastic news, long overdue,” reads another reply from one favoring a CFPB downsizing. “Drain the swamp.”
“I've been in this business for over 40 years and have done just fine without them,” wrote one respondent regarding the CFPB. “There are plenty of rules and regulations laid out, one on top of another — too many, I say. [The CFPB's] guidance is vague and seems all they do is go after businesses in harmful ways. We survived in the past without them and I'm certain we can survive in the future without them.”
Downsizing or removing the CFPB “would be a great decision,” one respondent said. “The CFPB has too much authority and is not regulated adequately.”
“The CFPB is a rogue organization. They are over-regulating and should be dissolved. What they do can be handled much cheaper by other agencies,” wrote one respondent.
“Best thing Trump has proposed,” one survey respondent wrote of removing the CFPB. “I hope they are deleted. They have gone after good brokers, lenders, etc. as a slap for the financial collapse that they needed to blame on someone. The added paperwork, [and the] annual NMLS fee is a joke. Realtors are every four years. It’s a money-maker and that is it. They have caused higher fees [for LOs] and have not protected the general public.”
“Eliminate it,” wrote another respondent regarding the CFPB. “It is over-reaching and adding to banking regulation strangulation. There is plenty of consumer protection in place in existing bureaus.”
The CFPB has “gotta go” because it is “oversight overkill,” a respondent contended.
“Excellent! No reason for the CFPB to exist. Our state regulators oversee us," another reader responded. "Why is it necessary to have any more regulators than needed?”
“There is already too much regulation. We have the FDIC and National Credit Union Administration (NCUA), and each state also has a level of regulatory compliance needs,” a respondent wrote in a similar vein. “The CFPB was created to protect the consumer; however, it only hinders the whole process. We spend more time making sure we ‘comply’ than we do actually helping consumers.”
“I think it's a wonderful idea,” one respondent said of downsizing or eliminating the CFPB. “I have dealt with the CFPB, and I can't tell after using their services what use they are to American consumers. I have had to dig up evidence of fraud, predatory lending, ID theft, tampering with contracts and credit reports, deception, defamation of character, collusion... it goes on and on, never-ending, and help is most certainly non-existent.”
“I had it all along. I tried telling all facets of government what was literally in everyone's face,” the respondent continued. “Now the same people have done the same thing to my 77-year-old sis who has cancer. So, shut them down. I would say shut the whole son of a b*tch down.”
Others Say Change, Not A Shutdown, Is Necessary
“Not positive! The CFPB has been a pain in the rear since it was created, but the reason behind the CFPB was to rebuild the confidence in the U.S. financial system,” a respondent wrote. “This rebuilding of trust has helped increase loan amounts, decreased down payments, and has kept interest rates low. It has also weeded out many unscrupulous companies and individuals.”
“The CFPB has a place in the regulatory space, but a closer look might show they are doing the same job as the GSEs in terms of underwriting compliance. If there are other issues, maybe that should be turned over to the states to fine or assess penalties,” wrote another respondent.
“Change is due for the CFPB, but haphazardly cutting jobs and defunding is not the whole answer. The CFPB has created help for borrowers and LOs, but the overreach and demands from some of the investigations has been too much,” one loan officer wrote. The LO then asked what should be done “without the CFPB, who is some of the oversight for help — but then also, who is oversight for the CFPB?”
“I agree with the mission of the CFPB and think they should still exist for the mission assigned. However, they should not be able to be politicalized and should not run on the thoughts that every business is bad," a respondent wrote. "Ninety percent of businesses are good, and may have a few errors. The CFPB should root out the 10% and should help improve the 90% without enforcement."
“The CFPB is a necessary evil, a thorn in the side of all the mortgage companies trying their best to stay compliant,” wrote another respondent. “It would be nice if they offered help instead of just hand-slapping. However, they are necessary to keep those scam artists in check. Since they are essentially self-funded, it's really not a burden to the taxpayers.”
“While the mission of the agency is understandable, it seems that oftentimes it would overreach — sometimes successfully, sometimes not," a respondent contended. "Also, how [the CFPB] is funded is questionable, without the need to answer to and obtain funding from the typical appropriations process.”
“Confused on how we move forward,” wrote another respondent.
“Create one organization that does what the CFPB, Department of Housing and Urban Development (HUD), and Federal Housing Administration (FHA) do,” suggested one respondent. “How does The Department of American Mortgage Efficiency (DAME) sound?”
