Under the Dodd-Frank Act, the Consumer Financial Protection Bureau (CFPB) was created. The real teeth of the CFPB was to centralize mortgage banking oversight and regulation into one agency. Over the last several years, mortgage originator licensing education has focused on the creation of the CFPB and the intended impact on the industry.
The CFPB is in its infancy, so there will be a lot of growing pains as it matures and is able to provide the federal oversight that was envisioned. It is not untypical that legislators have a grand vision when they create agencies like the CFPB, anticipating that the “devil is in the details”, letting the new creation make the real decisions of what needs to be done and how to do it.
I recently received an offer from a company that appeared to blatantly violate mortgage marketing regulations that have been taught to originators. As an experienced loan officer, I was anxious to see how the new “regulatory hammer” might come down on an alleged violator.
I considered whether my grievances were better directed to a State or a Federal agency. Because the mailing came from another State I decided that the Federal level was appropriate. I marked the piece up and looked up the CFPB’s website and found that they had a convenient way to forward complaints. I followed their directions and waited for a response.
Within ten days, I received a call from a person identifying themselves as a representative from the company that the CFPB had forwarded the complaint to, wanting to discuss the matter. Instead of investigating the matter thoroughly, or reviewing the forwarded mailing for violations of mortgage marketing regulations, the CFPB chose to let the “fox explain why it had raided the hen house”. The entire conversation consisted of dodges and excuses, with many of the things said, demonstrating a complete lack of knowledge or understanding about the infractions that I was referring to. I made my position clear that I was not satisfied with the explanation that I was provided.
A few days later I was advised by e-mail that the CFPB had received the response, it was available for my review on their website, and to contact the CFPB if there were any further questions. I followed their directions and after reading the comments called back into the offices of the CFPB to discuss the response and proceeded to get a stereotypical, government agency, run-around.
Apparently the very consumer that the agency was set up to protect is not the highest priority on the CFPB’s list as they start up their operations. It was the kind of offer that I received that caused much of the deception so prevalent prior to the mortgage meltdown. My complaint deserved an independent investigation by someone with knowledge of the new regulations. I would rather have waited for a thorough investigation and response than participate in an effort that was a complete waste of my time. The alleged offending party apparently is allowed to continue to send out its questionable mailings, no more questions asked.
The Federal government’s recent record of new agency start-up has been less than impressive over the last few months. The government grows bigger with every new agency of oversight that legislators create. Unfortunately, the results are smaller than the grand expectations that are set. Hopefully, time will produce better results.