CFPB Official: All Mortgage Originators Should Play by Same Rules

All mortgage originators should play by the same rules regardless of their charter said a top official at the Consumer Financial Protection Bureau (CFPB) during a financial services conference on Thursday.

Speaking at the Consumer Federation of America’s Financial Services Conference, Raj Date, Special Advisor to the Secretary of the Treasury on the CFPB said the agency is working on writing rules to fix very basic matters of the mortgage market.

“We are writing rules requiring mortgage lenders to assess whether a borrower can actually pay them back,” he said. “And, we are writing rules making sure that monthly bills sent by mortgage servicers include key information about the loan.”


The CFPB remains without a leader since Richard Cordray hasn’t been able to get through the Senate confirmation process. Without a Director, the agency is limited to supervising only those institutions with more than $10 billion in assets to ensure they comply with existing consumer financial laws.

“And once Rich Cordray is in place as our director, we’ll not only supervise these large banks, but also—for the first time at the federal level—we will supervise providers outside the banking system, including mortgage companies, payday lenders, and private student lenders,” he said.

Non-banks play an important role in the mortgage marketplace said Date, but during the housing bubble they were responsible for many problematic loans offered to consumers.

“With Rich in place, we will be able to ensure that brokers, originators, and servicers play by the same rules regardless of their charter,” he said. “It shouldn’t matter if you’re a thrift, bank, ILC, finance company, or investment bank. If you want to be in the business of consumer finance, then you’ve got to play by the same rules as everybody else.”

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  • This is ONLY going to increase the costs for the borrower.  Sen Hutchinson spoke this morning to Tim Farley on POTUS channel on Sirius satellite radio.  Said its not necessary, that it would overwhelm the financial industry and restrict lenders from participating in niche services. Thought certain parts of Dodd Frank should be repealed as well as her constituancy overwhelmingly was complaining of too much regulation and costs associated with once simple rules, and that the way the loans were packaged to unknown players has been reigned in.

    • wealthone,

      With a few glaring exceptions, the problem has rarely been in the issuance of regulations or creation of laws.  It is generally in the area of enforcement and the will to prosecute to the level needed.  While there is Bernie Madoff to point to, the result did not come from the skill of investigation or the will to prosecute, it came because Bernie’s conscience and related fear finally got to him and the public was angered.  Yet all the information needed to come after him was filed annually with FINRA for years.

      Where are the prosecutions over the mortgage demise?   I guess those at Citynarrow (you know the name) did not and do not have much of a conscience and are in denial.  But were they alone???  I guess the few tens of millions in fines and penalties paid by the figure face of the mess (and the head of the company which got a sweetheart mortgage for one of the named creators of the recently enacted “regulating law” which created the Consumer Financial Protection Bureau) is good enough in the current Department of Justice. 

      What good are more laws and regulations in an environment where investigation is tied up in politics and prosecutors seem so feeble?

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