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FEATURE SERVICING hard for me to see the JPMorgan Chase loss as an argument for more regulation." What's Next W GOP challenger Mitt Romney by only 4 percentage points, a difference of 48 percent and 44 percent, it's clear that nothing is clear about how the CFPB and Dodd-Frank will fare after the 2012 general election. What is clear, some say, is that ith a recent Gallup poll putting Obama ahead of the agency and reform law will face an existential threat from Republicans who vow to defund and repeal financial reform from the past two years, just as most Democrats will continue to call for stronger regulation in the wake of Wall Street blunders. As for the regulators and their already tight credit and sink a slow but steady recovery. That debate may be what leaves Dodd-Frank without many of its rules today. The law firm David Polk released a report in March that found regulators had missed more than 50 percent of their time-sensitive rulemak- ing deadlines for 400 rules. Of those, regulators slid past 70 percent, or 158, of their require- ments, an astonishing number since 99 rules still need finalizing and 147 lay in wait. up in May when JPMorgan Chase revealed an unflattering trading loss in the billions ($2 billion then, reportedly $4 billion or more now). Although some say that lawmak- ers soft-balled their approach to Chase CEO Jamie Dimon, those in favor of the law jumped on the opportunity to declare Dodd- Frank—and the Volcker Rule's ban on short-term proprietary trading— more needed than ever. Tack on a recent damning report that now-defunct A resurgence of interest spoke What Will Compliance Cost? THE GOVERNMENT CONTINUES TO CHAMPION PLANS FOR NEW SERVICING STANDARDS, BUT THE POTENTIAL PRICE TAG FOR MEETING REGULATORY DEMANDS IS LIKELY TO CREATE COLLATERAL DAMAGE. C proposed rules for mortgage servicers from the Consumer Protection Financial Bureau (CFPB). According to a commentary from Fitch Ratings, these new rules, if implemented, would set consistent learer monthly mortgage statements, warnings before interest rates adjust, quick correction of errors—these are among the Countrywide Financial bought political access with hundreds of VIP loans, and many supporters renew their call for tougher financial reform. Mark Calabria, Cato Institute, missed deadlines? At least one ana- lyst says that the Dodd-Frank rules will come in time, even with the fuss over politics and regulation. "I think the regulators are dismisses calls for a stronger Dodd-Frank as those that come from "proponents frustrated that it's getting mired in the regulatory process and . . . vast decision- making process that is delegated to regulators." "You're going to grab whatever straw you can," he says. "It's doing exactly what they should do: don't worry about dead- lines, worry about getting it right," CNBC quoted Thomas Vartanian, chair of finan- cial institutions for law firm Dechert, as saying recently. "In my 35 years in government and Washington, I don't remember any [dire] consequence for a regulator not meeting a deadline, but there can be serious conse- quences in the marketplace for not getting the regulation right." standards for residential servicers, but the rules "will also further increase compliance costs for the industry and potentially drive further consolidation within mid to smaller servicers." The ratings agency stated one key change with the proposed CFPB rules is that it applies to banks and nonbanks of all sizes and types, and for smaller institutions, the impact of compliance costs is believed to be even greater compared to the largest banks. "As such, Fitch believes these changes have the potential to drive further consolidation and uncertainty in the industry as larger entities scale down their presence due to increased scrutiny and compliance risks, while smaller entities exit due to higher compliance costs and insufficient returns," the commentary stated. THE M REPORT | 55 ORIGINATION SERVICING ANALYTICS SECONDARY MARKET