Mick Mulvaney- CFPB Interim Director-The Emperor with No Clothes?

Mark S. Lynch, Esq.

HNCIt was only a couple of years ago that the daily topic of conversation among title professionals was TRID, threats of CFPB enforcement actions against the title industry and potential of stronger regulations through Dodd-Frank. While these regulatory frameworks are still in place, there is currently a noticeable lack of discussion by title insurance professionals. So, what happened?

Confusion reigned at the CFPB when Richard Cordray, the director of the CFPB, a consumer watchdog agency resigned and named his chief of staff, Leandra English, as the bureau’s acting director. English barely had time to assume the duties of Director when, shortly after, President Trump named Mick Mulvaney as CFPB’s acting director.

Since Mick Mulvaney took over at the Consumer Financial Protection Bureau, he has not taken a single enforcement action against any bank, lender, credit card company, or any other entity within his purview. Nothing. Perhaps his lack of enthusiasm stems from his less than favorable opinions of the agency he is charged to direct and who once described the agency as a “sick, sad” joke. Mulvaney’s primary agenda since assuming leadership of the CFPB has been to  rein in the agency and overhaul its mission. Since taking over, Mulvaney has reportedly scaled back an investigation into the Equifax data breach, relaxed restrictions on often predatory payday lenders, and recommended that Congress pursue sweeping changes to the CFPB’s powers.

A review of a CFPB database obtained shows that the bureau issued an average of two to four enforcement actions a month under former Director Richard Cordray, President Obama’s appointee.  The climate of the CFPB under current acting director Mulvaney was described by Aaron Klein of the Brookings Institute as “…kind of a reflexive, anti-whatever the last guy did approach.” This do nothing approach is a startling difference from the CFPB under Director Corday who, from 2013 to 2017, handled more than 1.2 million consumer complaints and brought about nearly $12 billion in relief for harmed consumers.

CFPB watchers on both sides think enforcement action hasn’t stopped entirely, and supervision and investigations are still happening. The CFPB has blamed the slowdown on a new administration taking over and announced that “assessing the legal risks of all pending enforcement actions is a critical part of the transition process and standard procedure for new leadership at enforcement agencies such as the Bureau”. Notwithstanding, the CFPB still maintains that “… review continues alongside the agency’s ongoing law enforcement work.”

While the CFPB may be evaluating its role in the current enforcement climate, even Mulvaney appears to believe his tenue at the CFPB will be relatively brief. In addressing a banking conference, Mulvaney told reporters that he is likely to remain at the helm of the CFPB through the end of 2018. “I tell folks that the way the Senate is working we’re just sort of assuming that I’ll be there for the rest of this calendar year — that’s just how we’ve planned,” he said. “It could be dramatically longer than that; it could be shorter than that.”

So, what does this all mean for title insurance professionals in Maryland and nationally? Perhaps it is best illustrated by the June 7, 2018 dismissal by CFPB of its case against PHH initiated in 2015 when then Director Corday tacked a $103 million increase onto a $6 million fine initially levied against PHH for allegedly illegally referring consumers to mortgage insurers in exchange for kickbacks. This abandonment of this important challenge to the powers of the CFPB, represents an important and sudden shift in direction by the CFPB.

My prediction is that the industry wide enforcement on all fronts as was evident by Deputy Corday’s leadership will significantly diminish and be replaced by singular and press worthy enforcements designed purely for public consumption under Mulvaney such as the one billion dollar ($1,000,000,000.00) fine levied by the CFPB against Wells Fargo in April of 2018 for abuses in auto insurance and mortgage lending.  Additionally, given the pro-business environment of the current administration combined with the noticeable reduction of regulatory initiatives of the 2010 Dodd-Frank Wall Street reform law, the CFPB will likely see a diminishing role in the financial and real estate industry framework for the foreseeable future.

Good news or bad……………only time will tell.

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