Senior Financial Advisors Beware, CFPB Is Watching Certifications

The Office of Older Americans launched in October by the Consumer Financial Protection Bureau may be new, but it is quickly beginning to examine financial products geared toward older Americans, as well as the people who sell to and advise seniors on those products.

The agency, mandated under the Dodd-Frank Act and launched in July, introduced its Office of Older Americans in October. The office is led by former AARP national board member Hubert “Skip” Humphrey, also a former Attorney General, and includes some reverse mortgage oversight under its authority.

“[Congress] wants us to look at financial transactions that seniors engage in,” Humphrey said during a webinar hosted by the National Council on Aging this week, noting health care and housing products as some of the most often used financial tools by seniors.


The bureau will take a close look at the certifications of those who advise seniors on financial products, Humphrey told attendees. For some in particular, the rules could be positioned to change.

“[Some] unfortunately got their certifications by attending a two-hour conference at a hotel,” Humphrey said. “Congress is aware of that and they have told us to monitor and report back for regulation in those areas.”

Rule making by the agency has been hindered in part by the lack of a director to lead the bureau. The Senate voted today not in favor of moving forward the nomination of Richard Cordray, the Bureau’s enforcement chief whom President Obama nominated for the position.

Written by Elizabeth Ecker

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  • I hope the Assistant Director is prepared to follow through.  The proliferation of credentials is ridiculous.  Use of most of them in marketing and other promotional activities should be prohibited whether no matter what the intended age of the customer/client.

    The CFP is a great model and its ranks show it.  A very significant portion of its holders have graduate degrees in related fields and many hold licenses as attorneys and CPAs.  Its minimum five basic college level required courses could stand to be beefed up but on the other hand, it is much better than most other “financial” related credentials.

    The securities industry has done an OK job in attempting to cut down on questionable credentials.  Even they could do better.

    It is too bad that the CSA is so light on requirements.  By extending the education requirement, it could be a good credential.  It has a long way to go to get there.  Despite its drawbacks, its education provides some good insights into seniors. 

  • How will the CRMP fare?  While Skip points to 2 hour hotel courses, how will the CFPB feel about a 15 hour convention requirement with an exam, and some industry experience?  

    The CRMP should have higher formal education requirements but it doesn’t.  I cannot imagine Skip looking over this low standard despite an experience and an exam.

  • The CRMP was designed in accordance with the ANSI standards for accredited continuing education programs. The Critic is clearly misinformed as indicated in the comments above.

    Candidates for the CRMP must first meet the pre-requisite of participating in the required number of hours of continuing education (currently 12), either from NRMLA or other approved providers, within the past year, prior to being eligible to apply. The Independent Certification Committee (ICC), which is moving towards being comprised entirely of individuals who have earned the CRMP designation, approves courses for which credit is granted. Candidates must also participate in our ethics synmposium, in addition to the 12 hours of continuing education, pass a comprehensive exam that was developed through an arduous psychometric process driven by one of the top consulting companies nationally in vocational knowledge measurement and professional credentialing, then undergo a thorough background check. While the CRMP designation is good for three years before renewal, once the CRMP is earned, holders of the designation must  obtain an additional 12 hours of approved continuing education courses each year, including participating in a reverse mortgage issues update course.

    We designed our program in accordance with the appropriate standards because our research showed there has been increasing concern about the validity of professional designation programs and we wanted to make sure that the CRMP would be recognized and acceptable to various entities that might have concerns.

    A far as formal education requirements go, in developing our program a fair amount of time was spent discussin whether a college degree or some other formal education benchmark should have to be met. In the end, it was decided that a number of reverse mortgage professionals might lack formal higher education, but have significant career and life experience, qualifying them to earn this designation. A college degree earned 20, 30 or even 40 years ago would have little relevance to a professiona’ls ability to perform in our field today. For example, I obtained a BA in Liberal Arts with a major in History way back in 1975. Would any of my studies back then make much difference on my ability to perform my job today? Probably not nearly as much as everything I have learned out in the business world since. 

    • Peter,

      Taking the fluff out of it, to acquire (not keep) the CRMP it boils down to:  1) meeting an experience requirement, 2) getting a background check, 3) sitting (or sleeping) through 12 hours of approved meeting hours (actually 10 clocked hours), 4) attending a live ethics course of 3 hours, and 5) passing an exam.  Wow, I guess I was terribly wrong and misinformed.  I forgot about the background check (but then again most of us in the industry have that already done that through the NMLS). 

      Even the CFP does not require a 4 year college degree but it does require five fairly difficult courses with five finals.  Upon completion of the course requirements, CFP candidates are eligible to sit for a rigorous ten hour exam given over 2 days.  That is 25 hours of testing in total.  Most financial planners think highly not only of the education but also the obtaining of the credential.

      I am a real estate broker and that field is closely tied to the same basic issues as reverse mortgages.  To provide the best
      service to seniors, one should know basic real estate concepts, have a strong grasp of appraisal, understand real estate finance, be familiar with basic business law, and grasp basic financial concepts including budgeting and the time value of money calculations. 

      I can see how wading through the Macedonian influence on Greek democracy, Tertium Bellum Punicum, De Bello Gallico, the 100 Years’ War, the Spanish Inquisition, the Boer War, the Crimean War, Biblical concepts in the Communist Manifesto, Mein Kampf, the Dutch influence in Indochina, or British rule in Palestine might not be of paramount value in overseeing a nonprofit related to Jazz but such studies do give one perspective and validate a certain amount of acumen and native intelligence applied to a specific or several specific academic disciplines.  But understanding an unrecorded land contract can help explain to a senior why they need a HECM for purchase rather than a refi even if they have been the equitable owner of the property for forty years, especially when legal title is now in the hands of a grandson with a different last name from the seller.  Or why a 99 year lease must be analyzed since it is not title.  Or why 47 bail bond liens (from four different California Superior Courts and a Federal District Court involving over 30 judges) against the house need not only cancelled checks but also court approved releases of lien to be formally filed in order to clear title.

      No, I do not remember everything I learned in all of those real estate related courses but they have stood the test of time as providing a strong working foundation for what I have done thereafter in the field of real estate and mortgages.  Knowing what I do now, I wish I had a course or two in money and banking.

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