(OnlineEd – Portland, OR) Good news from the CFPB – they’re still not quite speaking softly, but starting in November at least, they’re leaving the big stick at home.
The Consumer Financial Protection Bureau confirmed earlier this month that enforcement attorneys would no longer be accompanying examiners in on-site exams of mortgage lenders.
The CFPB began the practice of having an enforcement attorney present at exams starting in 2012. This practice led to uneasiness in lenders and often made the process more costly. Detractors also argued that this practice limited the effectiveness of the examination process and differs from the practices of other federal regulators.
Beginning November, however, the agency will no longer have enforcement attorneys present at exams. According to a Bureau spokeswoman:
“We found that it wasn’t efficient to have both examiners and enforcement attorneys physically present on exams,” said the CFPB spokeswoman. “We think this approach will result in better overall oversight.”
However, just because enforcement attorneys are on the bench, doesn’t mean that they will be uninvolved. The CFPB made sure to clarify that enforcement attorneys will still be working with examiners:
“Supervision Examiners and enforcement attorneys will continue to work closely to ensure that the financial institutions that we oversee are following the rules.”
Not all of the news coming out of the CFPB is good, with many mortgage lenders struggling to make changes to comply with several January final rule effective dates, but this news should encourage mortgage lenders and should help relieve some of the stress and burden on the industry.
Joseph is a graduate of Oregon State University. When he isn’t at work, he stays busy with music and recreational sports.