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Opinion, commentary, and analysis on everything that makes the U.S. housing economy tick -- not to mention the ghosts in the machine, too. Written by HW's team of editors and reporters each business day.
Lending

What is the most likely outcome for the CFPB?

HousingWire webinar panelists answer

March 29, 2017

As the confusion and uncertainty around the Consumer Financial Protection Bureau continues to escalate, HousingWire gathered three expert panelists to weigh in on the discussion, giving their insights on the most likely steps forward for the government and bureau.

And after an hour-long question and answer webinar, it’s easy to see why there’s so much discussion over the topic. There are so many possible outcomes at play with the CFPB that it’s difficult to speculate on which one will come to fruition.

Between the CFPB’s court case with the PHH and a handful of bills circulating trying to overhaul it, the one thing that is for sure is that something will have to change, even if it’s simply CFPB Director Richard Cordray fulfilling his term and walking away in July 2018.

The full recording of the webinar is now available on HousingWire here. For a teaser of what was discussed, here are some highlights on what the panelists said.

The panelists include:

  • Ryan McKenna, General Counsel at radius financial, has closely followed the PHH/CFPB case and given insider knowledge on how lenders feel about the future of the industry.
  • Laurence Platt is partner in Mayer Brown’s Washington D.C. office and a member of the Financial Services Regulatory and Enforcement practice. Be sure to check out Platt’s in-depth explanations on the CFPB and President Donald Trump’s recent executive orders here.
  • Ron Rubin is a lawyer and writer. Most notably, Rubin formerly worked at the CFPB as an enforcement attorney and was also a senior counsel and chief advisor of regulatory policy for the Committee on Financial Services.

For starters, Platt opened up noting that he does not expect the CFPB to go away completely. And, “if they are going to go down, they are going to go down swinging,” he said.

Until the future structure of the bureau is worked out, there are two main areas at play for the CFPB: regulation and enforcement.

For enforcement, Platt said expect business as usual.

But with regulation, Platt said people should think small, as in smaller regulations. “I don’t expect a lot of regulatory stuff to come out of the CFPB in the near future,” he said. This mean what does come out will be in regrads to smaller regulations.

And if the CFPB did go away, the industry shouldn’t expect enforcement to simply let up, as Platt told attendees to not get comfortable since the state attorneys general will step up.

One specific bill to overhaul the CFPB that was discussed during the call was the Republican-led bill to replace the single director of the CFPB with a five-member bipartisan committee, a change the Republican Party has long pushed for.

If this were to happen, Rubin stated they ultimately could do the job just as well, a view that is opposed by people who believe bipartisan committees can’t anything done.

The only real issue that politicians would have with a commission, Rubin explained, is that it brings almost complete transparency. “You can’t hide what’s going on,” he said.

Consumers aren’t likely to have an issue with that at all. But if this did happen, Rubin commented that it would take five years to internally balance out the agency.

Given the five-year-timeline, it doesn’t seem like the industry should expect change anytime soon when it comes to overhauling the CFPB.

Check back in a couple of days for the full Q&A webinar recording, which digs deeper into the timing of things, the PHH case and the future of Director Richard Cordray. 

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