Two years ago, the Consumer Financial Protection Bureau (CFPB) did not formally exist. One year ago, it was without authority or enforcement capabilities. Today, the fully-empowered agency, which officially launched on July 21, 2011 and got a director some six months later, now has a staff of 757, according to the CFPB.
The size of the CFPB (in terms of staff) dwarfs the number of active Federal Housing Administration-approved reverse mortgage lenders, which has dramatically declined from about 1000 in January 2010, to about 700 in January 2011, to less than 300 at the outset of 2012.
Source: The CFPB, as of Dec. 31, 2011
The CFPB, spawned by the massive Dodd-Frank Act, has the potential to substantially impact the reverse mortgage industry in areas such as lending practices, mortgage servicing examinations and senior consumer protection.
The bureau has promised to take a close look into senior financial affairs, with a special interest in protecting seniors’ homes. It has also announced its intentions to conduct a study on reverse mortgages within a year of its official launch, per a Dodd-Frank mandate, and the outcome of the study may influence the creation of more regulations for the industry.
More than 3,700 new regulations have come out of Dodd-Frank as of October 2011, with another 4,257 in the pipeline, according to remarks by Representative Spencer Bachus (R-Ala.) at last year’s Mortgage Bankers Association Conference.
Nearly 400 staff members at the CFPB are devoted to supervision, enforcement, fair lending, and equal opportunity; it remains to be seen how the bureau’s power will impact small banks and lenders in the coming months.
Written by Alyssa Gerace