The world's richest man has called for the watchdog to be 'deleted'. What does the mortgage industry think?

The Consumer Financial Protection Bureau (CFPB) landed at the center of a media storm in November when Elon Musk vowed to “delete” the watchdog as part of cost-cutting measures undertaken by the soon-to-be-created Department of Government Efficiency.
The Bureau, which regulates the US mortgage industry, has also grabbed headlines in recent months by beginning audits on brokerages and initiating high-profile legal proceedings against companies including Rocket Companies, Berkshire Hathaway subsidiary Vanderbilt Mortgage & Finance Inc., as well as credit rating giant Experian.
But to date, Musk’s call for an end to the CFPB doesn’t appear to have garnered a flood of mortgage industry support. In a post last month, Sun West Mortgage Company chief executive officer Pavan Agarwal highlighted a November CFPB report encouraging states to write their own rules and expand upon their own laws, suggesting that could open the door to a new regulatory framework that might not necessarily be a better outcome for the industry.
🚨 Consumer Financial Protection Bureau (CFPB) Dismantled? Mortgage industry shake-up alert! 🚨
— Sun West Mortgage Company, Inc. (@SunWestMortgage) December 17, 2024
Pavan Agarwal, CEO of Sun West, dives into the potential dismantling of the CFPB and why this might NOT be the victory some are hoping for.@PavanCelligence pic.twitter.com/K1VFV0xd1l
“If they are in fear of being trimmed dramatically by the Trump administration, they are setting the stage for states to take over where they left off,” Agarwal said, “and that’s actually worse for the mortgage industry because now [we’d] have to deal with a patchwork of regulations.
“I’d rather have the regulator you know, and is smart, versus the regulator you don’t know, and hopefully they’re smart. Be careful what you wish for – it may not come out the way you think it’s going to be.”
‘It’s a slippery slope if we go too far’
While Chicago-based broker Mike del Preto (pictured below) of A and N Mortgage Services, Inc. said some of the Bureau’s focuses in the mortgage space can occasionally look like overreach, it clearly has good intent. “I’ve been a very honest and transparent open book of a mortgage lender so for me, it’s really just a breath of fresh air,” he said.
“We should all be doing things in the clients’ and consumers’ best interests, and treating our clients like we’d like to be treated. I think the CFPB in general is intended to put the consumer first and protect them.”
Some of the CFPB’s measures in the mortgage industry can sometimes miss the mark, del Preto said. “They often are not in the streets doing the work for the industries that they’re trying to put guardrails around, so they sometimes they miss the boat. But that’s very common, so it’s not like this is something that’s new, and it’s got good intention.
“There’s already enough fraud as it is, and consumers have a hard enough time being protected when it comes to mortgages. I think some deregulation would be good but it’s a slippery slope if we go too far.”
Shining further light on credit reporting agencies and their use of trigger leads would be a positive step by the CFPB for the mortgage industry, according to Sonoran Lending president and senior loan officer Jay Lessard (pictured below).
“Hopefully down the road, we’ll see some focus on that,” he told MPA. “But [the CFPB] is something that we pay attention to. We want to make sure we’re staying in line with what we need to and at the same time providing a solid overall product.”
What’s next for the CFPB?
Musk’s plans to abolish the CFPB faced pushback from elected representatives including Senator Elizabeth Warren, who told WBUR Americans should be skeptical about the multibillionaire’s true motives.
“Whenever billionaires are talking about how they think things would work better for ordinary families, hang on to your wallet,” she said.
Republicans have long criticized the CFPB, which was created as part of the Dodd-Frank financial reform law in the wake of the 2008 financial crisis, as a symbol of government excess. Only Congress has the power to eradicate the watchdog.
Musk and former Republican presidential candidate Vivek Ramaswamy are set to helm the new Department of Government Efficiency, or DOGE, when President-Elect Donald Trump takes office on January 20.
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