Good afternoon —
Rohit Chopra has his work cut out for him. Enforcement at the CFPB dwindled during the Trump administration, in no small part because the agency gutted its fair lending office.
The Government Accountability Office found that during a 2018 reorganization, the CFPB shifted its fair lending enforcement from specialists to generalists at the enforcement office. The CFPB distributed nearly three quarters of its fair lending staff to other divisions.
The mortgage and housing industries widely expect Chopra to focus on regulation through enforcement; strengthening the fair housing division would be an early step toward realizing that goal.
"Chopra can restore the CFPB to its intended mission," Jesse Van Tol, president of the National Community Reinvestment Coalition, told Senior Mortgage Reporter Georgia Kromrei. "Under Chopra's leadership the CFPB can get back to work strengthening the oversight of financial institutions and restore protections that were diminished or ignored under Trump."
The industry, of course, has requests. It wants regulatory equity. In a letter nominally congratulating Chopra, the Community Home Lenders Association asked the CFPB to ensure that all mortgage loan originators – including those working at depository institutions – comply with the same regulatory requirements as non-depositories.
Scott Olson, the group's executive director, argued that exemptions for LOs at banks from licensing, testing, independent background checks and continuing education requirements is incongruous with requirements of bank employees working in insurance and other financial sectors.
The Wells Fargo account scandal is but one example of differing regulation standards, Olson said.
"The combination of unqualified bank mortgage loan originators, combined with senior bank management pressures on employees to push profitable mortgage products without regard to suitability, represents a clear consumer threat."
James Kleimann
Managing Editor, HousingWire
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