Adapting and rebelling: Working with CFPB

by MPA08 Dec 2014
By David Lykken
Special to MPA

It amazes me how many organizations are still operating under the assumption that the CFPB is a temporary hurdle to overcome. Too many in the industry are resisting the organization and assuming that, if they push back hard enough, it will go away. But let this be your wake up call — the CFPB is here to stay.
We may not agree with every ruling the comes out of the CFPB. It  may make it harder for us to do business, keep our employees, and serve our customers. But, if we're honest with ourselves, we played a large role in necessitating the creation of the CFPB. We let things get too far out of hand in the industry, and we gave the organization a reason to come into existence.
Now, we're dealing with a new reality. Too many lenders want to pretend like it's still the "good old days," before the CFPB became involved in regulating the industry. Instead of pushing back against the CFPB, though, why don't we consider working with it? Viewed in the right way, the CFPB can be seen as a partner--not as an adversary.
In our businesses, we don't just want success; we want sustainable success. Now, I would agree that the CFPB sometimes pushes too hard and we should show support to our own representation in congress to relax standards and give us more freedom.
However, I have met many people at the CFPB and most of them really want to work with us to improve the industry. So, let's not be bad sports about this. Let's shoot for long-term sustainability. Let's adapt to the new norm. Let's work with the CFPB--and stop rebelling against it. The CFPB is here to stay.


  • by Jay | 12/8/2014 10:06:54 AM

    Any organization that is headed by one individual, has little or no accountability to our elected officials in congress and the senate, and has it's budget unapproved, collects private information on individuals and is allowed to make, enforce, and create its own penalties and issue judgement on its own is not an organization created in anyone's best interest - simple as that.

  • by Marc Savitt | 12/8/2014 11:21:00 AM

    David, while I’ve always respected your opinions, I disagree with your comments in this article. I’ve been meeting with the CFPB on a regular basis since their inception. This includes meetings with Elizabeth Warren and Richard Cordray.

    While the CFPB has continually assured small business mortgage brokers and originators of a level playing field, we’ve seen just the opposite. An example would be the 3% rule. The CFPB allows lenders to receive SRP, because they (CFPB) “don’t know how to count it.” That’s their words, not mine. Therefore, the 3% rule only applies to mortgage brokers!

    The CFPB banned YSP, because they claimed it was an “unfair and deceptive practice.” However, SRP, which the Fed has acknowledged is the exact same thing, is allowed to continue.

    Raj Date, who is the former Deputy Director, gave speech after speech bashing brokers. Congressional testimony by the CFPB did much of the same.

    What about brokers not being able to order appraisals? Wasn’t it a federal chartered bank and an unlicensed AMC that were the subject of Cuomo’s investigation, which brought about the HVCC and now the AI rule? Banks, which played the biggest part in the fraud, are allowed to order their own appraisals. Is this a level playing field??

    What about licensing? Brokers and originators are required to be LICENSED, while LOs in banks are only registered. Does this sound like a level playing field?

    Your comment “So, let’s not be bad sports about this.” is infuriating to me as a 35 year veteran of this industry. I wonder if you’d be a good sport, if your income was limited and your competition was given a competitive advantage by a rogue government agency. Where’s their oversight??

    You also advised us to “Stop rebelling?” Your comments are tantamount to surrounding and allowing the CFPB to eliminate our industry.

    Please disclose to us, if you have accepted any consulting fees from the CFPB and/or the big banks?

    Marc Savitt, CRMS
    President, NAIHP

  • by Viva la Revolucion | 12/8/2014 12:06:30 PM

    What Jay and Marc said.


Should CFPB have more supervision over credit agencies?