Big changes for financial regulation are on the horizon.
In a press release, the Consumer Financial Protection Bureau (CFPB) announced it will be reviewing its policies, rules and educational materials.
In the release, acting Director Mick Mulvaney says: “Much can be done to facilitate greater consumer choice and efficient markets, while vigorously enforcing consumer financial law in a way that guarantees due process.”
In other words, the CFPB is thinking about rolling back some of its regulation put in place under former leadership, put in place by the Obama administration.
The CFPB was created in 2010 by the Dodd-Frank Wall Street Reform and Consumer Protection Act and started formally practicing in 2011. Since then, the CFPB has changed the way real estate agents, lenders, appraisers and consumers do business in the real estate market.
Some of the most significant transformations to the financial industry the CFPB spearheaded include:
- making mortgage and other financial forms more accessible by abridging them and translating them into plain English;
- receiving and addressing consumer complaints;
- filing dozens of lawsuits against financial companies for harming consumers;
- making and enforcing new consumer financial laws; and
- implementing changes under the Truth in Lending Act (TILA).
But, in keeping with the administration’s stated goals, the CFPB’s newly appointed leadership seeks to turn back the clock.
President Trump recently boasted he has “done more on knocking out regulations than any other president in our history… and we haven’t even started.” As evidence, in July 2017, the Trump administration put a stop to 860 pending regulations, including consumer protections and environmental rules, according to the Los Angeles Times.
Following the administration’s deregulatory agenda, the acting director is gathering information to take the teeth out of the CFPB.
Looking to the future, this anti-regulatory agenda will see a return to the lending environment of the Millennium Boom — think “no doc” loans and zero down payments. It’s very exciting in the moment, when homeownership soars and home prices become untethered from what can be sustained by reasonably qualified buyers. But when the inevitable crash comes, the resulting price plunge and spike in foreclosures will be steep and terrible for housing.
Before any changes are official, the CFPB is requesting public comment on its activities. Comments can be submitted via the Federal Register, with details to be published in the coming weeks. Check back here for links to submit your comments as they become available.
Submit your comments at the Federal Register, here.