According to Mortgage Bankers Association (MBA) president and CEO Bob Broeksmit, America is in complete damage control mode as the Federal Reserve works to contain inflation, thus inflicting pain on the mortgage industry. Unfortunately, in times like this, bad policies have the propensity to raise their ugly head. Broeksmit noted in his opening remarks at the 2022 MBA Annual Conference in Nashville on Monday that the primary threat currently comes from the Consumer Financial Protection Bureau (CFPB), where the director can function as judge, juror, and executioner all in one.
The Consumer Financial Protection Bureau (CFPB) has been in the news recently after a panel of Trump-appointed justices on the Fifth Circuit U.S. Court of Appeals ruled that its financing source is unconstitutional. The Bureau is funded by the Fed rather than through appropriations legislation passed by Congress.
“When establishing rules, Americans need the CFPB to establish clear and uniform standards while also offering notice and feedback,” Broeksmit said. Unfortunately, the Bureau only sometimes follow this reasonable procedure, announcing new legal responsibilities without formal process or deliberation, enforcing novel and untested legal theories, and making it extremely difficult for businesses to understand their legal obligations.
Despite his complaints about the CFPB, the MBA CEO stated, “we prefer to settle rules that provide us some safe harbours for the manner that we make mortgages, and we don’t want it to go away completely.” The court of Appeal ruling currently has little to no effect on the industry, but if the Bureau appealed the ruling to the supreme court and it got upheld, the consequences would be massive. This might translate to a sudden reduction in the financing and staff strength of the Bureau. To read more, click here.