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At the Mortgage Bankers Association (MBA) Annual Convention & Expo today, Richard Cordray, Director of the Consumer Financial Protection Bureau (CFPB), addressed attendees by discussing the bureau’s initiatives in helping the housing ecosystem’s recovery and protecting the consumers whose purchasing activity makes this revival possible.
“No economic sector that precipitates a global financial meltdown could possibly expect to escape far-reaching reforms, as the Congress so dictated,” stated Cordray, in support of the CFPB’s measures since its formation. “But the safeguards we have put in place around underwriting, servicing, and loan originator compensation have improved industry performance, promoted responsible lending, and helped restore consumer trust that was badly shaken by the events of the past decade. These improvements benefit responsible lenders just as much as they benefit consumers.”
Cordray went on to identify three of the bureau’s focus points in the coming year:
1. Consumer Complaints
“While compliance with existing laws and rules is, of course, a baseline expectation for all providers, we believe that the industry can better serve consumers by paying more conscious attention to what those consumers themselves have to say,” Cordray affirmed.
Cordray articulated that by successfully addressing complaints, the industry can create efficient, sound businesses; he also explained that by establishing systems to closely manage complaints, like the bureau’s Consumer Complaint Database, businesses can “can identify spikes in specific complaint types, emerging trends, issues with new and evolving products, and patterns across geographic areas, companies and consumer demographics.”
2. Redlining
The CFPB Director stated that although we’d hope historical injustice was behind us, redlining continues to be an issue in housing. The bureau defines redlining as, “covering illegal disparate treatment in which a lender provides uneven access to credit, or unequal terms of credit, because of the race, color, national origin, or other prohibited characteristics of the residents of the areas where the consumer resides or the property is located.”
The CFPB is teaming up with the Department of Justice to make enforcement actions possible and provide millions of dollars in relief to consumers who have been adversely affected by these discriminatory practices.
3. RESPA Violations
Cordray assured attendees that the bureau would continue enforcing RESPA regulations despite the recent PHH ruling. Expressing the bureau’s respectful disagreement with the decision, Cordray stated that the CFPB is “considering its options for seeking further review” while continuing to adhere to their 2015 bulletin identifying risks related to marketing services agreements.