CFPB to Re-Examine Regulation

On Tuesday, Chris D’Angelo, the associate director of the Consumer Financial Protection Bureau’s (CFPB) division of Supervision, Enforcement and Fair Lending, said at an American Bankers Association meeting in Washington that the CFPB is bureau was set to undertake a review of a host of major rules that it has put in place, including the qualified mortgage rule.D’Angelo stated that the CFPB is “embarking” on the process of reviewing rules that it has put in place as mandated under the Dodd-Frank Act.

The qualified mortgage rule, a standard set up to make sure borrowers can repay their mortgages, as well as other mortgage servicing and home lending regulations are set to come up for review. The CFPB wants to “try to see what the real-world effects on the market” these regulations have.

All rules that the CFPB mandates are to be reviewed five years after they take effect, as mandated by Dodd-Frank. This goal is to make sure that the rules set by the bureau are not putting too much burden on financial institutions and providing the benefits to consumers they were intended to provide.

Recently, the CFPB announced that it has begun review of its remittance rule, which took effect in October 2013. This rule requires institutions that provide remittance transfers originating in the U.S. to disclose their fees up front. Following this review, the bureau made changes intended to make it easier for banks and other firms to comply with these regulations.

D’Angelo said that the CFPB will be moving on to reviewing mortgage rules in the coming weeks and months. The CFPB finalized several regulations for the mortgage servicing industry and other aspects of the mortgage market in January 2013.

He also said at the American Bankers Association meeting that the CFPB is still finding problems with the mortgage servicing industry despite these rules being in place, although, according to D’Angelo these problems emanate from “the third-party service providers and the folks who develop your technology solutions.”

Although changes are expected to take place, the bureau does not want to eliminate the incentive compensation practices that banks have in place.

“We know that you need those in order to manage larger organizations and how you drive your employees,” D’Angelo said.


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