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Is the CFPB hurting the economy?

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Mortgage Professional America | 07 Apr 2014, 10:45 AM Agree 0
The House Financial Services Committee has scheduled a hearing to examine the economic impact of the CFPB and other regulatory agencies
  • Joe in MN | | 07 Apr 2014, 11:10 AM Agree 0
    Is the CFPB hurting the economy?

    Hell Yes!
  • Tom Jones | | 07 Apr 2014, 11:22 AM Agree 0
    The CFPA is really hurting the mortgage industry, big time. There are a lot of unknown, misunderstand,inturpation of the laws and down right stupid parts of the law. It ends up hurting the very people they are trying to protect. Lenders are not making mortgages that should be made for reasons of being scared to do so for fear of making a mistake and ending up in a legal battle, so when this happens lenders do not make mortgages. I for one would like to see this law repealed, been in this business for forty years and never saw such a mess. Controls are over the top.
  • Ron Aguilar | | 07 Apr 2014, 11:28 AM Agree 0
    all comments are correct, I can't even begin to justify why over regulation is like taking a chainsaw to a problem.
  • | | 07 Apr 2014, 11:30 AM Agree 0
    What is your alternative suggestion to accomplish the goal?
  • George | | 07 Apr 2014, 11:43 AM Agree 0
    The actions of the CFPB have demonstrably hurt the economy in at least two major ways. First, their regulations have cost business immeasurable hours of time, effort and legal fees in order to comply with superfluous disclosures.

    Second, their actions pursuant to Dodd Frank and compensation to date have worked to eliminate competition. A further result is the reduction of available competitive finance in low economic neighborhoods. QM, an over correction to prevent future problems akin to those experienced in the recent real estate crash are aimed at problems resolved by market forces before the new rules were even implemented. The restriction of credit for housing, one of our economy's driving engines, has significantly dampened all economic activity in our country and throughout the world. Yes indeed they are hurting the economy.
  • Austin Summer | | 07 Apr 2014, 11:46 AM Agree 0
    'One size fits all' QM rules are not going to work. No one borrower is exactly alike and yet all of them are held to the same standard (e.g., 43% DTI). Broker compensation included in the 3% points and fees calculation, but this is not applied to the big banks and mortgage bankers. This is not transparent and it is hurting consumers who may be forced to go to the big banks or mortgage bankers for a higher rate, but the mortgage is safely within the 3% points and fees calculation. Also, broker inability to LOWER their lender paid compensation for the sake of the transaction. This is to prevent disparate treatment. Sorry, I don't think that it is disparate treatement when you are trying to save a deal. How can you regulate stupid? If people feel that they are being taken advantage of, then why even go through with the transaction? That person doesn't have access to the internet? Friends? Co workers? Family? Brokers can't lower their lender paid compensation because of fair lending. This is hindering the borrowers' opportunity to save money.
  • Jo Crozier | | 07 Apr 2014, 11:47 AM Agree 0
    I'll tell you what the alternative is! Cordray needs to go and get people at the top of the agency who truly have a clue about mortgage banking. IF YOU CAN'T DO THAT, MAKE THIS ROGUE AGENCY DEFUNCT! Those of us who have been in this industry for decades now understand that this business is about service and relationship to the consumer. I truly believe those of us who are still standing are standing because of knowledge and we've got the priorities straight. THE CLIENT COMES FIRST. Sen. Warren? We would certainly like to hear some feedback from you on this. CORDRAY IS NOTHING MORE THAN A SCHOOL YARD BULLY WHO IS ENTIRELY TOO PROFESSIONALLY IMMATURE TO HOLD THE POWERFUL POSITION HE HOLDS. We have too many people who are inept and ignorant of the industry now in control of the industry. Who gets hurt? The consumer, that's who. I wonder if Cordray could pass the NMLS exam? Chances are no he cannot. And my tax dollars are paying for this? REALLY?
  • Carol Landis | | 07 Apr 2014, 11:48 AM Agree 0
    A politician friend told me a long time ago,
    "You can not legislate Morality" Perhaps following the Golden Rule - do unto others - would have kept us all out of the necessity for the current rules.
  • Frank Hudacek | | 07 Apr 2014, 11:49 AM Agree 0

    Depends on what the goal is. I would always let the markets decide what works and what doesn't. Im of the opinion that the markets just learned a very costly 5-year lesson in what doesn't work.
  • Gary J. Heinecke | | 07 Apr 2014, 11:59 AM Agree 0
    Why doesn't the CFPB go after builders or Zillow?
  • Melanie Thompson | | 07 Apr 2014, 12:07 PM Agree 0
    Let's not forget about the fees to bank account holders due to the DFA's imposition of fees caps on retailers accepting POS debit/credit cards. That's why "free" checking is no more, or the "free" checking comes with fees for every banker assisted thing an account holder needs (copy of a check $1-$10, copy of a statement $1-$4 per page plus $24/hour research fee, VOD fees, VOM fees, replacement card fees, etc., etc.). Then there's the monthly fees on accounts that are from $2.95 to $12.50, plus the automatic movement of money from savings to checking to cover POS swipes fees that run $12.50 to $35.00 per swipe when an account holder isn't as diligent as they should be on their checking balance. The overreach of and over-regulation coming from government is felt by all, in all corners of the economy. The CFPB didn't bother to show up to its employee discrimination hearing. If they don't give a rip about their employees, they surely don't give a rip about consumers, much less the industries impacted. I think they're happy that industry is being harmed. They don't care to follow required legislation cost/harm predictions (isn't it an SBA requirement that impact of the legislation be calculated?), but just have the open comment period request that small businesses address their expected cost for compliance in their comment.
  • Melanie Thompson | | 07 Apr 2014, 12:13 PM Agree 0
    Jo Crozier: if taxpayer dollars were paying for the CFPB, there'd be a completely different story in play. Instead, Chris Dodd and Barney Frank had a completely partisan vote on the DFA and the democrats created an agency under the umbrella of the Federal Reserve Board that has no oversight from Congress and no budget constraints (well, that's not exactly true: the CFPB is only constrained by how many fines they levy and collect from the various industries they regulate - hence the $150+Million in renovations to an office building they RENT).
  • Mary | | 07 Apr 2014, 12:23 PM Agree 0
    The whole Mortgage Industry learned an expensive lesson. This over regulation which by the way, I agree, is choking the life out of our industry, is the extreme reaction to the lack of self regulation.
  • 2Bsquare | | 07 Apr 2014, 12:29 PM Agree 0
    The cost per mortgage increased $1,840 from Q4'11 to Q4 13. Hmm, MLO comp. Now we have QM and new GFE compliance. The CFPB is taking the stance of the FRB and putting nothing in writing.

    What amazes me, why hasn't the House Small Business Committee had a similar hearing.
  • John Deleva | | 07 Apr 2014, 12:48 PM Agree 0
    Any regulation driven by ideology is likely to cost much and accomplish little as it relates to the intended. 30 years of honorable service qualifies me to say if you thought the system was broke before Dodd/Frank and CFPB standby for really broken. CFPB in time will turn out to be a very expensive lesson in unintended/intended consequences of regulatory overreach. CFPB in principle reads well at 10000 feet, its a disaster on the's protecting consumers?????
  • Joe Petrowsky | | 07 Apr 2014, 01:18 PM Agree 0
    The sad part of all these regulations that have come about over the last few years, have all been created in the name of protecting the consumer. The problem with this concept, it cost the consumer so much more to accomplish getting a mortgage these days.
  • Ron Aguilar | | 07 Apr 2014, 01:22 PM Agree 0
    Wow, this topic got a lot of traction! Thanks everyone for your feedback.
  • Dane O | | 07 Apr 2014, 02:02 PM Agree 0
    The large banks were already hesitant to make certain types of mortgages outside of Fannie Mae and Freddie Mac guideline. The CFPB simply added another layer of fear in lending.
  • Jeff | | 07 Apr 2014, 02:19 PM Agree 0
    By the time CFPB came along and over regulated the mortgage industry the things they were trying to protect consumers from weren't being done in over 4-5 years. I'm all for protecting consumers but what they're working on and creating more compliance forms are not being done anymore. More rules, more agencies, more politicians involved = more problems.
  • Bill in Florida | | 07 Apr 2014, 02:28 PM Agree 0
    Venting, but pretty much wasted breath folks. DoddFrank was/is not much more than political theater coupled with DC's blame game pass the buck strategy to scapegoat the weakest link in the chain, the lowly broker and to go after the deep pockets of the big banks. They sure accomplished that. The big banks have done ok. Their retail networks were sure helped along by dumping on the broker industry. And I spent half my working life working for the big guys. Is the main purpose of the CFPB consumer protection or a money grab thru one fine after another? The problem was fixed before the CFPB came along. When the junk products went away that big banks created, along with the market to buy them...the bad guys left Dodge. All that had to be done was enforce what existed already for once. But the powers that be have done a pretty effective job of dumping on the broker industry. Deep pockets will always win out apparently. Wasted breath.
  • Jim in CT | | 07 Apr 2014, 02:54 PM Agree 0
    The lesson is that if you want to have some influence on regulation you'd better have some influence with people who like to regulate, which is generally the Democrats. Until they want change there will be none. The Realtors are way, way better than us at this.
    Until Dems want changes in Dodd-Frank or CFPB the House can bluster and hold all the hearings it wants, but nothing will change.
  • Joe M | | 07 Apr 2014, 03:32 PM Agree 0
    Like most gov'tal regs, they take it over the top, to try and justify their jobs(ie. a 1 pg GFE to a "revised" 3pg GFE that no one can understand, it doesn't even have to be signed
  • Mag | | 07 Apr 2014, 08:05 PM Agree 0
    Regulations were already in place. Lack of enforcement by the big boys whose pockets were/are still overflowing was the issue. Most of us, with the exception of Rogue Brokers, obeyed the laws. Been at this for 20+ years, licensed in 2 States and tired of dealing with nothing but compliance issues. The consumer is suffering because of the CFPB and the bad mouthing of the brokers. Heck, I was advised by a 1st time buyer seeking a community subsidy grant that her counselor had advised to her stay away from brokers. Really? Well, I am now a Mortgage Professional. Kiss it!
  • Tony Robb | | 08 Apr 2014, 03:59 PM Agree 0
    Unintended consequences combined with an over correction of market anomalies through dozens of years has lead to a virtual log jam in our industry, and many others. To think we shall pass these expense onto customers, plaguing them more with regulatory burdens, while government spends more money on committees and over-sight which evaluate committees, who are responsible for over-sight is a perfect example. Lets go back to 5 pages and a handshake, it would put many bureaucrats out of work which isn't a bad thing!
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