CFPB interfering with competition, former association president claims

by Diana Aqra25 Jul 2013

The CFPB’s latest crackdown on Castle & Cooke Mortgage for its loan officer bonus plan is interrupting the normal course of business and competition, a former association president has said.

Bill Kidwell, the 2007 former president of the Colorado Association of Mortgage Brokers, told MPA it shouldn't matter what employees are paid if borrowers are aware of what they're paying.

“Why should regulators be able to decide how I pay my employees if I am offering a competitive product to borrowers?” Kidwell said.

In announcing its action against Castle & Cooke, CFPB director Richard Cordray argued that consumers should be able to get mortgages without fear of how financial incentives paid to loan officers could affect the rate they pay. But Kidwell argued that there was nothing unfair or deceptive about making a profit.

But the CFPB has argued that incentivizing loan officers to upcharge consumers by distributing bonuses based on the interest rates of loans sold is unlawful. It is looking to secure restitution for those consumers that were upsold, the organization said.

While it may be generally agreed that the practice of charging unaffordable rates to consumers is wrong, Kidwell is one among many who is fearful and angry about the CFPB’s overarching power over the way mortgage originators compensate their employees. The industry should be “left to its own devices,” Kidwell said.


  • by Nathan | 7/25/2013 9:03:25 AM

    I heard a rumor when the CPFB opened it was paying some of their auditors a percentage of the fines it levied against mortgage companies. Does anyone know if this is true?

  • by maureen obrien | 7/25/2013 9:16:44 AM

    we all know what happened when the regulations were not enforced. that is why we desperately need the CFPB, finally.

  • by Amy | 7/25/2013 9:19:39 AM

    I too am tired of regualtion however I have seen where behavior has changed as a result. With out a doubt before the comp rules came out, many consumers would be put in FHA mortgages who could qualify for much less expensive conventional or bond programs. Happened all the time and apparently it still does at firms like Castle and Cook.


Is TILA-RESPA a good or bad thing long term?