Tag Archives: Consumer Financial Protection Bureau

Richard Cordray's nomination to continue leading the Consumer Financial Protection Bureau (CFPB) is headed to the Senate following a vote from the Committee on Banking, Housing, and Urban Affairs Tuesday. The committee confirmed Cordray's nomination by a party-line vote of 12-10, with Republican members keeping to their vow to not support any potential leader until CFPB's structure is fundamentally changed. Also up for vote was the nomination of Mary Jo White to head the Securities and Exchange Commission. White was approved by a vote of 21-1.

As the industry prepares to implement the Consumer Financial Protection Bureau's (CFPB) new ability-to-repay rules, Federal Reserve Governor Elizabeth Duke warns new consumer protections may come at a cost to the industry as lower-quality-credit borrowers are precluded from the housing market. As the broader economy continues to improve, household formation will increase, according to Duke, ""but if credit is hard to get, these will be rental rather than owner-occupied households.""

Richard Cordray, director of the Consumer Financial Protection Bureau (CFPB), sat once again on Tuesday in front of the Senate Banking Committee, this time to present his case to continue leading the consumer agency. While some had expected a contentious round of questioning from Republicans critical of CFPB in its current form, the proceedings were generally cordial. However, Sen. Mike Crapo did take the opportunity to voice his concerns about the agency's structure and about Cordray's controversial recess appointment, which was called into question earlier this year.

In an article released March 3, Edward Pinto and Peter Wallison, two fellows at the American Enterprise Institute (AEI), assert that the QM rule is ""simply another and more direct way for the government to keep mortgage underwriting standards low."" While the two authors acknowledge that the rule's provisions--described by them as ""draconian""--would ""probably have addressed the problem of low underwriting standards,"" they say the lack of down payment or credit history requirements doom it to failure.

Although some argue the push for homeownership was the root cause leading to the housing downturn, a report from the Bipartisan Policy Center's (BPC) Housing Commission argued it was actually a wide range of factors that converged to create the crisis and offered its own formula for encouraging sustainable homeownership for those with modest incomes. With past mistakes in mind, the commission argued sustainable homeownership should be encouraged among lower-income borrowers and can be achieved through broad availability of prime, fixed-rate mortgage financing and adjustable-rate mortgages with clear terms and limits on adjustments and maximum payments.

Fifty-four Senate Democrats and Independents issued a letter to the president last week defending the Consumer Financial Protection Bureau (CFPB) and pledging to support the re-appointment of current director Richard Cordray. Obama announced last month his intent to renominate Cordray for the position, reigniting criticism and the threat of another filibuster. Adding to the controversy is a recent appeals court ruling invalidating the appointments of several National Labor Relations Board members who were appointed at the same time as the CFPB leader.

The Consumer Financial Protection Bureau recently finalized several rules for the mortgage industry, including the ability-to-repay rule and new mortgage servicing guidelines. As the Bureau prepares for the rules to take effect in January 2014, it aims to take several actions to educate and prepare both the industry and consumers on the new regulations.

About 60 percent of loans written today would not be acceptable under the finalized rules for a qualified mortgage (QM) and the anticipated rules for a qualified residential mortgage (QRM), according to new research from CoreLogic. CoreLogic analyzed 2.2 million loans written in 2010 to determine what percentage of them meets QM and QRM guidelines. But, CoreLogic still concluded that ""[w]hile QM and QRM remove 60 percent of loans, they remove 90 percent of the risk.""

In light of the heightened number of mortgage servicing transfers, the Consumer Financial Protection Bureau (CFPB) issued a bulletin to servicers and subservicers to remind them of protections for consumers when loan transfers occur. ""If the transfer process is not handled properly, consumers may find that their servicer lost important loss mitigation documents or that the servicer did not credit their payments on time,"" the CFPB explained. The CFPB also announced it is making servicing transfer-related problems a focus and will be scrutinizing servicers in a few specific areas.

The Consumer Financial Protection Bureau (CFPB) announced Steve Antonakes will serve as acting deputy director while the agency continues searching for a replacement for departing deputy director Raj Date. CFPB announced in November that Date would depart at the end of January 2013.