Giving The CFPB Kudos


These days, the Consumer Financial Protection Bureau is actually getting a lot of praise. For one, The NAMB, The Association of Mortgage Professionals praised the CFPB and its Director Richard Cordray for taking steps to revise mortgage rules designed to facilitate lending in rural and underserved areas. NAMB went on to strongly urge the agency to quickly address the need for regulatory relief for mortgage professionals unfairly targeted for unnecessary and harmful regulations in the aftermath of the financial crisis of 2008.

“Any regulation relief that helps a group of consumers is a good start,” said John Councilman, NAMB President, “but it’s way past time for Director Cordray and the CFPB to acknowledge that mortgage professionals were not responsible for causing the financial crisis.” Councilman added, “If Director Cordray truly wants to help serve the underserved and rural areas, he and his agency should offer real regulatory relief to the thousands of mortgage professionals who are both small business owners and the best advocates for consumers.”

“The real irony under the current set of rules is that many community banks and credit unions essentially act as mortgage brokers because they operate as indirect lenders by outsourcing their mortgage underwriting and using a warehouse line to fund loans,” Councilman continued.

“If Director Cordray truly wants to help consumers make sure that healthy market competition with consumer protections are maintained, he should use the authority given to the CFPB by the Dodd-Frank Act to eliminate the inclusion of creditor payments to mortgage brokerage entities in the 3% cap on points and fees,” added Councilman.

“If the CFPB does not fix this issue soon, low and moderate income consumers may be harmed by paying a higher mortgage rate than they would otherwise qualify for, thereby creating a potential disparate impact,” concluded Councilman.

Bob Davis, American Banker Association executive vice president of mortgage markets, added, “We applaud the bureau for listening to community bankers who struggle to serve rural and underserved areas. These proposed changes are sensible measures that will make it easier for certain hometown bankers to meet the mortgage credit needs in their communities.”

“We appreciate that the CFPB responded favorably to ABA’s recommendations to expand the definitions of ‘rural area’ and to increase the number of loans an institution can make before falling out of the ‘small’ category.  If these proposals become final rules, many communities will enjoy more choice and expanded competition for mortgage credit.

“ABA intends to maintain its constructive engagement with the bureau and the Congress to achieve broader relief for the more than 60 percent of the U.S. population not impacted by these changes. Consumers in all parts of the nation deserve relief from overly restrictive rules and unintended consequences of recent reforms.”

About The Author


Tony Garritano

Tony Garritano is chairman and founder at PROGRESS in Lending Association. As a speaker Tony has worked hard to inform executives about how technology should be a tool used to further business objectives. For over 10 years he has worked as a journalist, researcher and speaker in the mortgage technology space. Starting this association was the next step for someone like Tony, who has dedicated his career to providing mortgage executives with the information needed to make informed technology decisions. He can be reached via e-mail at