In what was either the cheekiest throw down of a gauntlet or else one of the stranger phrasings for a professional in public life in recent memory, the head of the Consumer Financial Protection Bureau declared the CFPB is a “regime (that) will govern the mortgage servicing market – including both the banks and their nonbank competitors – in perpetuity.”
That was from the prepared remarks of Richard Cordray, director of the CFPB, speaking in Washington on Wednesday to the National Association of Attorneys General.
This comes one day before the House of Representatives takes up a bill that could give Cordray oversight.
The Consumer Financial Freedom and Washington Accountability Act, sponsored by House Financial Services Committee member Rep. Sean Duffy, R-Wisc., goes on the House floor Thursday.
The bill would replace the single CFPB director as numero uno with a five-member commission appointed by the president and confirmed by the Senate. Supporters say this would ensure that a diversity of viewpoints inform the CFPB’s regulatory and enforcement agenda. It would also conform the bureau’s governance to that of other federal agencies charged with consumer or investor protection.
“We know that this is an agency that was designed to be unique, if not perhaps rogue; it is an agency like no other. Arguably it is the single most powerful and least accountable Federal agency in the history of our nation and thus demands rigorous oversight. The American people deserve better,” said House Financial Services Committee Chairman Jeb Hensarling, R-Texas.
The bill further subjects the CFPB to the regular appropriations process and makes the CFPB a stand-alone independent agency rather than a bureau within the Federal Reserve System.
Speaking of the mortgage servicing market, Cordray extolled the CFPB’s role so far and seems to be saying that the bureau, as constituted, is the best approach and that it will not be changing. The CFPB, obviously frustrated with rate of reform in the mortgage servicing industry, is making its opinion known loud and clear. Last week, Steven Antonakes, CFPB deputy director, shocked a room full of mortgage servicers in the opening session of an insdustry conference saying,"Nearly eight years have passed and I remain deeply disappointed by the lack of progress the mortgage servicing industry has made."
In his remarks Wednesday, Cordray aslo said that the Dodd-Frank Act that created the new Consumer Bureau also authorized it to write new rules to clean up the mortgage servicing market.
"Where did we go when we set about writing these rules? Naturally enough, we took a close look at what we could learn from many years of work that you and your teams had already been doing in the mortgage servicing space. And we learned plenty," he said.
“All of that consideration has now borne fruit in a new regulatory regime. This regime will govern the mortgage servicing market – including both the banks and their nonbank competitors – in perpetuity,” Cordray said. “And the Consumer Bureau has both supervisory authority and enforcement authority to make these rules stick and ensure that servicers must comply with them. These changes will usher in a new era of fundamental reforms in mortgage servicing.”
Jeff Emerson, a staffer in Hensarling’s office, said that he could not get a response to Cordray’s remarks late Wednesday because Hensarling was chairing a committee meeting.
HousingWire will be covering the House hearing on the bill Thursday. Cordray is the subject of the cover story in HousingWire's February issue.