Lending

It's confirmed: CFPB doesn't need to follow Trump's executive order on regulations

Along with other independent agencies

regulation file

The Office of Information and Regulatory Affairs finally put to rest questions around the requirements of independent agencies under President Donald Trump’s recent presidential memorandum and executive order.

The uncertainty surrounded the impact of the EO on the future of regulations across all industries. 

Dominic Mancini, acting administrator of the OIRA, put out a memorandum giving interim guidance on implementing Trump’s executive order on Jan. 30 titled “Reducing Regulation and Controlling Regulatory Costs.”

The memorandum, which gives a list of questions and answers, includes the question, “Do Section 2’s requirements apply to significant regulatory actions of independent agencies?”

The short answer: no.

From the memorandum:

No, the requirements of Section 2 apply only to those agencies required to submit significant regulatory actions to OIRA for review under EO 12866. Nevertheless, we encourage independent regulatory agencies to identify existing regulations that, if repealed or revised, would achieve cost savings that would fully offset the costs of new significant regulatory actions.

Although the OIRA released the guidance specifically on Trump’s executive order, it answers the government’s stance on where independent agencies fall in having to oblige with the onslaught of regulatory changes coming out.  

The biggest housing-related independent agency caught in the confusion is the Consumer Financial Protection Bureau, especially since there are two major housing regulations in motion right now that could be frozen.

Other independent agencies include: the Federal Reserve Board, the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corporation, the Securities and Exchange Commission and the National Credit Union Administration.

The CFPB is working on a final rule on the CFPB’s TILA-RESPA Integrated Disclosures rule, and on top of this the final mortgage servicing rule implementation date had the potential to be pushed back.

Both will likely carry on as originally planned now thanks to the clarification from the OIRA.

Richard Andreano, practice leader of Ballard Spahr's Mortgage Banking Group, explained in an interview that he thinks the CFPB will now move ahead on rule making as usual as they believe that is their mission to do.

Andreano added that the bureau is an interesting situation in the mortgage area when it comes to Dodd-Frank. “With that many rules, there will be a need for fixes and clarification. A lot of what they are doing is fixing the original rule. And with that, there are some burdens and some benefits. It’s not that we don’t want some of these rules,” he said.

The calcification, however, only addresses the main confusion around whether the CFPB must adhere to Trump’s recent regulation orders. There are a lot of variables around the CFPB that are up still for grabs, including a ruling from the court on rehearing the case between PHH and the CFPB and a possible act coming out that would turn the head of the CFPB into a political appointee who can be dismissed at will.

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