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20 SPOTLIGHT: CFPB A LOOK AT THE LATEST NEWS AFFECTING THE BUREAU CFPB'S PERCEIVED OVERREACH, LACK OF ACCOUNTABILITY DISCUSSED IN CONGRESSIONAL HEARING Two major subjects discussed during a hearing early last month entitled "e Semi- Annual Report of the Consumer Financial Protection Bureau" before the House Committee on Financial Services were the Republicans' perceived lack of accountability on the part of the Bureau, as well as whether or not the Bureau's efforts have been overreaching. CFPB Director Richard Cordray testified during the hearing last month to discuss the Bureau's achievements in its nearly four-year existence, as well as answer questions from members of the Committee. Republicans, many of whom are members of the Committee, have repeatedly made efforts to reform the CFPB in the last three-and-a-half years. One of the Bureau's most vocal critics has been U.S. Rep. Jeb Hensarling, the Chairman of the House Committee on Financial Services. "e CFPB undoubtedly remains the single most powerful and least accountable federal agency in all of Washington," Hensarling said during the hearing. ". . . Americans are losing both their financial independence and the protection of the rule of law. e Bureau is fundamentally unaccountable to the president, since the director can only be removed for a cause; fundamentally unaccountable to Congress, because the Bureau's funding is not subject to appropriations; fundamentally unaccountable to the courts because Dodd-Frank requires courts to grant the CFPB deference regarding its interpretation of federal consumer financial law. us, the Bureau regrettably remains unaccountable to the American people. at is why we need CFPB on budget and led by a bipartisan commission; mere testimony is not the equivalent to accountability." Representative Randy Neugebauer (R-Texas) said he believes the pendulum has swung too far in the other direction. "Consumer protection must be done in a smart, tailored, and politically neutral manner," Neugebauer said. "It should not be used to advance ideological policies. If the pendulum of consumer protection swings too far, you have nothing left to protect. . . Some of my Democratic colleagues allege that Republicans want to get rid of the CFPB. I look back over the last five years and see a field of proposals to restructure the CFPB, not to get rid of it." Neugebauer said he planned to introduce several bills to refocus the CFPB, including one to introduce a balanced process into the Bureau's decision-making. "Many have forgotten that Elizabeth Warren, our former colleague Barney Frank, and even the president originally supported a board leadership structure," Neugebauer said. Among the Bureau's achievements Cordray touted were the new rules implemented to protect consumers in the mortgage industry. "Our Ability-to-Repay rule, also known as the Qualified Mortgage rule, put new guardrails in place to prevent the kind of sloppy and irresponsible underwriting that had precipitated the crisis," Cordray said. "Our mortgage servicing rules offered new and stronger protections to homeowners facing foreclosure. And our other rules addressed significant problems in the mortgage market deemed in need of repair. During this period, we continued our extensive work on regulatory implementation by providing tools and resources to assist the industry in implementing our final rule to consolidate and streamline mortgage disclosure forms at both the application stage and the closing stage." Cordray described attempts to make the Bureau more accountable as a "natural back and forth" between the Bureau and Congress. "I think this is in many respects a natural back and forth between the Congress, which has the rightful and important responsibility of oversight, and an executive agency like our own, which is of course ultimately accountable to the Congress, both for carrying out the statute that Congress has enacted that is the law we're supposed to implement and to make sure that you have the information you need to be able to oversee our operations," Cordray said. "ere's no disagreement about that. ere's no resentment about that. It can be a lot of work to respond to aggressive oversight, but I don't begrudge it. I think it's an appropriate role of Congress." After praising the Bureau's "remarkable" efforts that have resulted in directly refunding $5.8 billion dollars to more than 15 million consumers who were reportedly harmed by predatory practices, Committee Ranking Member Maxine Waters (D-California) turned her remarks toward criticizing the Republicans' efforts to make the Bureau more accountable. "I cannot imagine staff time and resources that the Bureau has spent responding to your frivolous requests—at the expense of helping our nation's consumers," Waters said. "But that's precisely the Republican playbook. ey want the CFPB to be wasting resources digging out from under a deluge of requests—so that the payday lenders, debt collectors, and other predators can continue victimizing the American people unabated. Mr. Chairman [Hensarling], your party pretends to care about the huge challenges of income inequality and minority access to credit, vilifying this agency as 'hurting the very people we are trying to help.'" Not all Democrats share Waters' sentiments. In February, Reps. Steve Stivers (R-Ohio) and Tim Walz (D-Minnesota) re-introduced bipartisan legislation that would create an independent inspector general for the CFPB that would be appointed by the president and confirmed by the Senate. Currently, the CFPB shares an inspector general with the Federal Reserve—a position that is appointed by the Fed chair and not subject to Senate approval.

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