Can we maintain a constructive relationship with the CFPB?

by Ryan Smith11 Sep 2014
By David Lykken
Special to MPA

I am often criticized by some in the industry for showing too much support for the CFPB. Isn't this organization the enemy? Shouldn't we be fighting against the CFPB if we want to support the mortgage industry? Isn't the CFPB actually bad, not just for the industry, but for the whole economy?
Don't get me wrong: I do think that regulation has become too strict in the past few years, and I think agencies like the CFPB have in many instances overstepped their bounds. But, when I encourage people in the industry to work with the CFPB on issues, there is one thing I keep going back to: we are the ones who created the CFPB. Not literally, of course. But it is our complacency and lack of self-governance that necessitated the creation of the agency. We at least owe the CFPB our cooperation.
Many of the people who are working for the CFPB are people from our own industry. We may perceive them as having "joined the dark side," but I don't think they see it that way. I think, when it all comes down to it, we in the industry and those who regulate us want the same thing. We want a vibrant, growing economy that is fair and provides the best opportunities for all parties involved.
Knowing we share the same goals, we should at least be willing to have a constructive dialogue. Things get done, not when we yell back and forth at each other, but when we are willing to have civil discussions. So, let's start getting things done. Let's be open to dialogue.

David Lykken is 40-year industry veteran who consults on virtually all aspects of mortgage banking. David hosts a successful weekly radio program called “Lykken On Lending” ( that is heard each Monday at noon (Central Standard Time) by thousands of mortgage professionals.



  • by Katie | 9/11/2014 12:18:13 PM

    Excellent, excellent article! Thanks!!

  • by Jacob | 9/11/2014 12:24:08 PM

    Many great points!

  • by mortgage pro | 9/11/2014 1:32:40 PM

    Isn’t this a rather childish way to frame your argument? It really sets you up to easily strike down what you yourself have proposed. Using words like “enemy”, “joined the dark side”, and “bad” is really unnecessary and is really insulting to anyone reading this article who is involved in this industry day to day. Let’s start with treating the reader as an adult.
    Everyone in this business now did not create the problem. Most if not all of us left in the business now were not involved in any of the unethical behavior that created the problem. There is also strong evidence that those that did try to report and stop that behavior were ignored or worse. Even when it did reach the enforcement agencies nothing was done. We only asked that they enforce the laws and regulations that already existed and the failure to do that caused a lot of these problems to get out of hand. The answer: more regulation.
    We welcome smart regulation. The problem is that CFPB does not understand our business, and that many of their efforts seem to be aimed at gaining public support. Any government bureaucracy, once created, is almost impossible to dismantle. I expect the CFPB to be around for many, many years. That doesn’t mean we have to like it or just take what they have to say without pushback. We should be vocal in our opinion about how the CFPB wants to regulate us; we should not act as if we are cooperating with them, but present a united front of opposition when appropriate. The CFPB certainly grandstands in their enforcement activities and perhaps we should in educating the public on the dangers of over-regulation. Everyone I know in this business sees the regulation choking off good business little by little. If the mortgage business is important to the economy, then the economy will suffer.
    Your solution seems to be just that. Let’s cooperate with them. But it has to be a two way street, and they have to stop looking to just punish the mortgage business, and start looking to cooperate with us if they want us to be partners in informing and protecting the consumer. There are many, many good people in this business that have devoted their entire working lives to the mortgage industry that have always treated their customers the right way. It is time for the CFPB to realize that and to realize what great partners we can be.


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