TheMReport

56 | TH E M R EP O RT O R I G I NAT I O N S E R V I C I N G DATA G O V E R N M E N T S E C O N DA R Y M A R K E T THE LATEST GOVERNMENT A Clear Path Forward for the CFPB A proposal called for several changes and increased transparency at the bureau. S ince its formation in 2011, the Consumer Fi- nancial Protection Bureau (CFPB) has been widely ambitious, reportedly issuing 50 rules within its first five years, making it the "fastest rulemaking body in the federal government," according to research from the American Action Forum. With the bureau appearing at a junc - ture set to "critically examine" its practices following the release of 12 requests for information (RFIs) last year, the Mortgage Bankers Association (MBA) released its own proposed "roadmap" forward for the bureau. Since the bureau's founding, it "has exercised its authorities to drastically change the regulatory regime over consumer financial products and services. No industry has been more impacted by this transformation than the housing finance industry," the MBA stated. While conceding that the CFPB has "bolstered consumer financial protection," the MBA complained that the bureau has exceeded its authority, created unnecessary costs, imposed "unnecessary regulatory burden," and restrained consumers' access to mortgage credit. In its "Roadmap to CFPB 2.0," the MBA addressed potential im - provements in each of the major functions of the bureau: rulemak- ing, enforcement, supervision, and market monitoring. One of the main themes of the roadmap was clarity or transpar - ency, which was central in the proposed changes for each major bureau function. "The need for greater clarity extends both to the Bureau's expectations for how business should act and what businesses can expect from the Bureau. Uncertainty around regulatory expectations hinder innovation and business develop - ment," the MBA stated. To improve its rulemaking process, the MBA proposed the CFPB "create a 'rule on rules' that promotes responsible rulemaking." When issuing guidance, the proposal requested the CFPB "adopt a clear guidance policy," including making guidance "clearly reliable" and issuing guidance after receiving public feedback. The bureau should also refrain from using the examina - tion manual as a means of issuing new expectations. It called for clarity and trans- parency in the CFPB's enforce- ment actions. In the case of civil investigative demands, firms should understand their purpose and should know when they have concluded, the report said. Also, "Timelines need to be realistic." The proposal also called for an end to "Regulation by Enforcement," clear UDAAP stan - dards, transparency during investi- gations, and the establishment of "a civil money penalties matrix." When conducting examinations, the CFPB "should not 'expect' perfection but rather a compliance management system that's com - mensurate with the institution's risk profile," the proposal said. Also, firms' appeals to the bureau's examinations should be public. In terms of its role of "mar - ket monitoring," the proposal implored the CFPB to remove its consumer complaint database from public view. "Contrary to the CFPB's stated position, publishing unverified complaint data does not promote consumer financial education or market transparency," the MBA explained. "The opposite is true." It went on to say that "pub - lishing consumer complaint data distorts market transparency and consumer understanding" because in many cases what is labeled as a complaint is actually a misunder - standing and "rarely" involves "ac- tual business errors or misconduct." The proposal also addressed specific regulations, including loan originator compensation, ability- to-repay/qualified mortgage rule, TILA-RESPA integrated disclo - sure rule, RESPA Section 8, and HMDA. Overall, the MBA said its road- map aims to promote the CFPB's "dual statutory mandate to vigor- ously enforce consumer protections and enable financial opportunity." "The Bureau has shown an admirable willingness to listen to stakeholder concerns about how it can improve both its own practices and the regulations it is tasked with enforcing," said MBA President and CEO Bob Broeksmit with the release of the MBA's paper. "The recommendations laid out in this roadmap will further strengthen CFPB's policies and en - sure that all consumers are treated fairly and equally and have access to the quality sustainable products they deserve."

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