Yesterday I wrote about the Overview & Purpose Of Consumer Financial Protection Bureau (CFPB), in which I outlined the creation of the CFPB, their primary purpose, an who they regulate. Today I want to go into What Has The CFPB Been Up To Since It's Creation, and internal changes that have been taking place at the CFPB.
The CFPB as it stands right now has, as Senator Jerry Moran (R-Kans) puts it “their own jurisdiction and regulate vast segments of our economy without accountability or restraint" The CFPB is a very powerful agency that is only subject the the supervision of the President of the United States. Many members of the Senate and Congress realize that this is way to much power to give any agency, there are bills presently being proposed to change that. But in the mean time the CFPB is preforming their duties without any restrictions, and doing pretty much whatever they want. This autonomy, and lack of supervision has produced some good and bad results.
The CFPB in my opinion has gone way beyond what any other regulatory agency is allowed to do. For example:
When the CFPB does one of their Examinations/Audits on a Lender, they not only look at financial records, and quality of loans processed, they also question employees, search e-mails, text messages, and anything else that has any possibility of being Lender related. It sort of reminds me of the Senator Joseph McCarthy trails of the 1950's.
- They have the power to and have used it to tell small Financial Institutions to merge into one entity.
- They have wasted a lot of time duplicating rules and guidelines that are already in place.
- They are attempting to change Debt-To-Income Ratios and Downpayment requirements on Loan Programs.
I could go on but I thing these present a good picture. However, even though to date the CFPB has mainly concentrated on the Lending Industry, they have started to extend their attention to other financial institutions under their supervision. Some of the things that the CFPB is attempting to do is not all bad, in fact there are a few things that I would support such as:
- Eliminating the disparity between Loan Originator Licensing Requirement between Non-Depository Lenders and Depository Lenders.
- Prohibiting the three major Credit Bureaus form selling off consumer credit information, by creating an automatic Opt-Out. The consumers would have to grant the Credit Bureaus the authority to sell their credit information by Opting-In. This would be the complete oposite of what exsists now, where the Credit Bureaus sell off consumer information unless they Opt-Out.
- Revising and combining the Good Faith Estimate (GFE) & Truth-In-Lending Statement (TIL) into one understandable document.
- Looking closer at the way Credit Card Companies operator.
- Taking a closer look at advertising policies
- The Creation of "Small Business Panels" otherwise known as "Advisory Groups"
For the purpose of this blog I will stop there, and expand a little more on the "Small Business Panels" otherwise known as "Advisory Groups". Apparently the CFPB is starting to realize that maybe they do not know everything, and have started to incorporate Industry Experts into their so called Small Business Panels/Advisory Groups. The impact of these groups, even though their creation is very recent, has already started to show that the CFPB might be listening, and not just going off like a bull in a china shop. The new GFE/TIL that is supposed to be rolled out in the Fall is a good example of that. I have seen the new GFE/TIL and it is a major improvement over what we have right now.
So there are positive things going on at the CFPB, but they still have not won me over. Mainly because with the positive they still continue to implement new changes that raise my distrust, like the implementation of new secret Regional Satellite/Branch Offices. I recently found out that they have created one in Hartford, CT, and is staffed with people whose job is to try to trap Lenders into stating something wrong. Some of the staffers are Loan Originators that were responsible for the wrong doings of the past. After all who better to know how to break the rules than those that have already demonstrated a high degree of proficiency at it. And OH buy the way these experts are being paid at a tune of about $160,000 per year.
There is a lot more that I could write about what is going on at the CFPB, but this blog is already longer than I intended. I hope that the above information provides a better understanding of What Has The CFPB Been Up To Since It's Creation, and internal changes that have been taking place at the CFPB. I am sure that they will remain one of my favorite blog topic in the future.
Info about the author:
George Souto is a Loan Officer who can assist you with all your FHA, CHFA, and Conventional mortgage needs in Connecticut. George resides in Middlesex County which includes Middletown, Middlefield, Durham, Cromwell, Portland, Higganum, Haddam, East Haddam, Chester, Deep River, and Essex. George can be contacted at (860) 573-1308 or firstname.lastname@example.org