WASHINGTON (May 15, 2018) – The Bureau of Consumer Financial Protection plans to eliminate regulation by enforcement and increase regulatory clarity, according to speakers at the Regulatory Issues Forum at the 2018 REALTORS® Legislative Meetings & Trade Expo.
The high-profile session, keynoted by CFPB Acting Director Mick Mulvaney, focused on regulatory policy concerns important to the real estate industry. During his remarks, Mulvaney addressed the latest actions out of the CFPB, plans for improved efficiency and effectiveness of agency operations, and his perspectives on issues important to Realtors®.
Mulvaney spoke at length about the bureau’s previous policy of regulation by enforcement. “The regulation by enforcement answer is really simple: we aren’t doing it anymore,” he said. “It’s a fairness issue, if you’ve done something for so long and the government wants to change the rules, shouldn't the government have to tell you they are changing the rules before they fine you?”
According to Mulvaney, under his direction, the CFPB has made it a priority to get “back to basics.” The goal, he said, is to bring clarity to both consumers and businesses about what is and is not legal. He criticized the previous administration, saying that businesses were punished not for breaking laws, but for legal business practices the administration felt should be illegal. Said Mulvaney, “We are not out to make you look like a bad guy if you are not. We are out to enforce the law, not become the law.”
In line with this, the acting director promised to do away with unduly and overly burdensome regulations.
“NAR is encouraged by the new direction of the bureau under Director Mulvaney’s leadership, specifically, plans to decrease unnecessary regulatory burdens in line with the current administration,” said NAR President Elizabeth Mendenhall, a sixth-generation Realtor® from Columbia, Missouri and CEO of RE/MAX Boone Realty. “NAR has been supportive of legislation that promises to reduce burdensome requirements, including for smaller creditors, to facilitate increased lending, and we are hopeful such changes will move through Congress soon.”
During the audience Q&A, the issue of student loan debt and its impact on the rate of homeownership was broached. According to Mulvaney, the CFPB concentrates on education and stopping predatory lending practices. “We don’t have a magic wand to make a pile of student loan debt go away. What we can do is make sure that consumers are educated before they take on that debt,” he said.
A panel discussion followed Mulvaney’s keynote, including Phil Schulman, partner at legal services provider Mayer Brown, and Tim Wilson, president and CEO of Prosperity Home Mortgage. Panelists were asked about an NAR-supported proposed structural alteration that would change the CFPB from a single director to a five-member commission.
Wilson said the stability and moderation of a bi-partisan commission could mitigate the large swings previously seen when transitioning between presidential administrations and bureau directors. Mulvaney has also shown support for instituting a commission. “We should never rely on a single individual to enforce the law; you shouldn't have to trust me not to abuse my authority,” he said.
The panelists also agreed that more clarity needs to be provided in regards to the Real Estate Settlement Procedures Act in the wake of the PHH violations case. According to Schulman, “We need guidance, and we should be knocking on the door of the CFPB about several issues, one of the most pressing being co-advertising between agents and lenders. This is a practice that has been going on for more than 10 years, and the CFPB has provided no guidance on how to do so in compliance with RESPA.” However, both Schulman and Wilson expressed hope that this ‘new CFPB’ will provide this much needed clarity.
The session ended with a call for participation in the CFPB’s Requests for Information, which help the bureau assess its efficiency and effectiveness. “I need information from you folks, from consumers, from everyone who has a dog in the fight to provide insight,” said Mulvaney. NAR recently submitted comments on Consumer Investigative Demands and associated processes used by the bureau to gather facts during an investigation to pursue potential violations of federal consumer financial laws.
The National Association of Realtors® is America’s largest trade association, representing 1.3 million members involved in all aspects of the residential and commercial real estate industries.