There are six things to consider in dealing with the government, courtesy of Peter Carroll, EVP, Mortgage Policy at Quicken Loans, and Katherine Porter, professor of law at the University of California at Irvine.
Porter, who focuses on bankruptcy, commercial law, consumer law, and mortgage foreclosure, was appointed by California Attorney General Kamala Harris to be the state’s independent monitor of banks in a nationwide $25 billion National Mortgage Settlement.
Carroll was formerly senior vice president of Wells Fargo & Co. and was assistant director of the Office of Mortgage Markets at the Consumer Financial Protection Bureau.
Their advice, delivered at Source Media’s mortgage servicing conference in Dallas on Thursday:
Government is here to stay. Stop whining and start working. The worst whining comes from outside counsel, and most in the business know regulation is part of the game. Don't let the lawyers control the tone of the discussion.
Kill all the lawyers, or at least don’t let them out of your sight. And pair them with people in the business when reviewing regulations, compliance, requests for comments and everything else they do.
Be creative thinking about how to take advantage of mechanisms that exist inside government to get ideas out there in test mode.
Know your enemy. It’s not just about the CFPB but all the different regulators – state and federal – and they don’t always communicate with one another. In fact, the only thing all 50 state attorneys general agree on is that there are 50 of them.
Don’t just go through the revolving door – embrace it. Try giving someone coming out of government a real job. Get them to do meaningful work in your company. Don’t just put them out to pasture in a corner office.
- Build government engagement into your business growth model. It's not a box to check but a strategic opportunity to avoid liability and to make more money.
When it comes to regulators, Porter says there is no such thing as being too basic.
“You cannot underestimate how little they understand your business. Take the time to educate them. You can't aim too low,” she said.
And as your company grows, expect more scrutiny.
“Government has an obesity problem. It wants to catch a fat fish. Its interest in your business will grow as your business grows,” Porter said. “More customers means more mistakes. More mistakes is more liability. It's more fun to beat up Bank of America. (Regulators) are human too."