Strength In Numbers

Seeking advice from the CFPB

An illustration of a woman with a megaphone leading a crowd.

Insider

Contributing Writer

I started working in the mortgage compliance world shortly after the creation of the Consumer Financial Protection Bureau (CFPB). As I read through the new rules being implemented, I often discovered ambiguities in the law.

In those early days, I regularly reached out to the CFPB through a reg inquiry. To do so, I would send the law that I believed needed clarification in an email along with my question.

The most frustrating part quickly became the phone call that followed with a CFPB attorney. Expecting clarification, I was surprised the first few times as the attorney on the other end read the law to me word for word, with no additional explanation, the same law that I had sent over in my email and spent days or weeks studying before submitting the question. As they read, I would often interrupt, hoping for clarification, and they would continue reading or start over.

Needless to say, it didn't take long before I stopped submitting reg inquiries.

In 2020, the CFPB created a new program, known as the Advisory Opinion Program, which provides written guidance to assist regulated entities to better understand their legal and regulatory obligations. Entities can submit requests for advisory opinions regarding any issue under the Bureau’s jurisdiction that can be resolved through an interpretive rule. Per the CFPB, the purpose of this new program is to help the bureau comply with one of its primary functions, which is to issue guidance to implement Federal consumer financial law. They stated that “providing clear and useful guidance to regulated entities is an important aspect of facilitating markets that serve consumers.”

We recently submitted a couple of questions, going through the process of drafting up the questions, along with any applicable laws.

Then we waited and waited. After the first month passed with no response, I wondered if I would ever hear from them.
Around that time, my friend, Audrey Boisseneu, reached out to let me know they were having someone from the CFPB as a guest on her Mortgage Pros411 podcast and she asked if I had any questions.

Finally, I thought, this is my chance to get some answers. I presented the general topics I had questions about, but I also asked Audrey and Kevin to address the silence from the bureau.

A couple of weeks later, I received a single sentence follow-up to my inquiry asking to set up a call with a gentleman named Mark.

This call was definitely different from the CFPB calls of the original Richard Cordray days. Although not an attorney for the CFPB, Mark was helpful in answering my questions to some degree with what he knew, and then guiding my requests down the proper channel. He also volunteered to follow up on outstanding items and future requests to make sure they were answered.

Between the rapid changes in the rates and the program adjustments, the industry needs clarification now more than ever.

The first step in seeking clarification is to use the online tool found at https://reginquiries.consumerfinance.gov. Simple questions can often be sent in a few minutes’ time. The bureau says that they will respond within 10-15 business days, and if they need more time than that, they will let the inquirer know. Keep in mind that they can’t provide guidance on state or Federal law that is not under the Bureau’s authority; nor can they accept comments on pending rulemakings. Those should be submitted to the public docket.

If you have a more serious, long-term issue that needs clarification, consider utilizing the Advisory Opinion Program. Not many requests are taken up through this new program, but for the ones that are, this program provides written guidance to help those in the industry better understand their legal and regulatory obligations.

A third way to get more clarification is to make your voice heard early in the rule-making process. As part of the process, the CFPB solicits public comments from the public, professionals in the industry, and organizations that support the industry sector. The CFPB looks for trends in the comments as well as areas that may need additional guidance.

Recently, there was a request related to the automated valuation model (AVM) and compliance requirements related to it. It is likely the rules related to AVMs will have a regular impact on you in the business.

Another request that is currently open relates to needed mortgage loan programs. The CFPB is trying to find new opportunities for borrowers to utilize in an effort to promote competition and support household financial stability. If you are interested in commenting on this request or others, you can do so by going to consumerfinance.gov/.

This experience has taught me that although we can continue sending anonymous requests for our students and clients, there is strength in numbers. Reg inquiries and other requests are tracked; if the CFPB gets a lot of requests, they are more likely to provide an official written FAQ or advisory opinion.