The Consumer Financial Protection Bureau is devoting the majority of its time to regulating the mortgage markets, a top CFPB official told attendees of a Mortgage Bankers Association conference this week in New York City.
“We opened for business almost 10 months ago. Since then, we’ve made tangible progress in a number of markets,” said Raj Date, deputy director of the bureau. “We’ve launched an evaluation of overdraft protection and payday lending. We’ve worked to help students better understand their financial options. And we’ve started figuring out whether shorter, more transparent credit card agreements can really make a difference to consumers’ understanding.
“But, as you might imagine, the place we’re spending most of our time is in the mortgage market,” Date said.
While the U.S. mortgage market was supposed to be the broadest, most liquid, most sophisticated consumer finance market in the world, it failed, and failed to calibrate risk, he said.
The CFPB has launched several mortgage industry efforts toward improved transparency for borrowers. The agency has worked to overhaul mortgage disclosures under the Truth in Lending Act and Real Estate Settlement Procedures Act. It has also made recent new requirements of mortgage servicers, and is currently in the process of drafting an ability to repay rule that will apply to all forward mortgage borrowers.
“We We want to craft a sensible rule that works for the market throughout the credit cycle, but we want to be attentive to just how fragile and risk-averse the market seems to be today,” Date said.
Written by Elizabeth Ecker