The More Things Change... a Reflection on the CFPB Overhaul

As we all have heard by now, the CFPB is under what appears to be a complete overhaul. The beginning of that process was the termination of Rohit Chopra, the now-former CFPB Director. This was a campaign promise of President Trump, and he very quickly made good on that promise.
For those of us who still call the mortgage industry home either directly, or indirectly, we enter a season of uncertainty with respect to the implications of these decisions moving forward. The CFPB was very active, especially in the latter days of the Biden administration. They were aggressively pursuing actions involving a variety of different institutions. For now, those companies get at least a temporary reprieve.
While there is much handwringing over this decision, I tend to take a long-term approach. One of the things we must remind ourselves of is the fact that data collection is only going to become more prolific moving forward. What I mean by that is that while the function of the CFPB is now uncertain relative to enforcement in the immediate, the data is still being collected. There may be a new sheriff in town, but that new sheriff and the man who appointed him will only be around for the remainder of a four-year term.
If you're reading any political opinion into my comments, you're misreading them. There is none. It's just a simple fact that when administrations change, especially from one party to the next, many things change. But in a few short years, there will be a new administration, whether it's Republican, Democrat, or Independent. And the appetite for regulatory control and enforcement will likely also change. When that change occurs, the fact that data collection has been, is, and will be ever-increasing ought to at least resonate in the back of the mind of anyone in this business contemplating playing in the gray.
Some would argue that the CFPB did not do enough, and others suggest that they did too much. I tend to believe that both things are true and that having a regulatory agency with broad powers, such as the CFPB, is complicated by the fact that it is funded through regulatory action, through enforcement. Fines and fees are required to feed the machine. Call me cynical, but that often leads to less-than-pure motivations.
Another critical variable is the direction the newly appointed Treasury Secretary and now CFPB director, Scott Bessent, will take this department. He is generally regarded in the financial sector as intelligent and formidable. I will reserve judgment on this new direction until we have actual data on how he intends to lead.
Meet Kirk Faulkner Kirk brings a wealth of experience to the Knowledge Coop, spanning media sales, technology, non-profit work, and a thriving 20+ year career in the mortgage industry. His focus on compliance and training within the mortgage sector is enriched by his diverse background, which shapes his unique perspective and approach. This multifaceted expertise allows him to navigate the complexities of the mortgage industry with a comprehensive understanding and innovative solutions.