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.”