No state laws were violated by Castle & Cooke throughout its investigation, the Utah Division of Real Estate has told MPA.
The Utah Division of Real Estate discovered conduct by Castle and Cooke Mortgage during the summer of 2011, but the investigation was referred to the CFPB for further direction, according to an official from the Utah Department of Commerce.
“Allegations did not violate state law, stated Francine A. Giani, executive director of the Utah Department of Commerce,” in an email to MPA. “Utah investigators referred the case to the Consumer Financial Protection Bureau as our team thought the conduct fell under federal rules on compensation in the mortgage industry,” she wrote.
Utah’s inaction against Castle & Cooke and CFPB’s action raises the question as to what degree state regulators have actually regulated mortgage companies up until this point, and more importantly, to what degree the CFPB will be using them for their own federal enforcements. As previously reported by MPA, regulators from states like California and Florida said that they didn’t actively do examinations, only licensing activities, but that they were working closely with the CFPB to coordinate examination efforts.
Alan J. Cicchetti, director of a Lenders Compliance Group and former regulator, previously told MPA that the introduction of the CFPB has caused a “level of examination that is unprecedented,” and that “originators of all sizes, including independent brokers, should have a system in place that standardizes its policies and procedures, should an audit or [CFPB] examination take place.”