A Period of Uncertainty – Welcome to the CFPB!
Written by: Bill Dolan, CMB, AMP
With the recent shake-up at the CFPB, lenders are most certainly facing a period of regulatory uncertainty, including dealing with your HMDA reportable loans scheduled for upload to the CFPB no later than Monday, March 3, 2025.
Due to no changes being announced regarding HMDA reporting, the most prudent decision would be to “hit the button” and transmit your LAR HMDA data taking a business-as-usual approach.
Keep in mind that all Lenders are still obligated to comply with TRID and all other regulations including ATR/QM, RESPA, FCRA, and ECOA. Failure to do so or comply could result in running the risk of potential lawsuits from borrowers or enforcement actions from state agencies.
It is important to note, that not all functions of the CFPB have been totally halted. A case in point is the Acting Director Vote of the CFPB directing the office of research to continue to publish the Average Prime Offering Rate (APOR) which demonstrates the importance of this metric.
The consumer complaint function appears to be in limbo for both consumers and financial institutions alike. With the shutdown, consumer complaints are not currently being reviewed nor addressed, which could possibly harm the consumers.
Serious concerns linger over data security and access (check the 60 minutes program piece this last week) to CFPB data, especially with the dissolution of vendor contracts. It was noted that safeguards have been implemented to protect supervisory data, including training and potential liability for data leaks.
Though current uncertainty at the CFPB exists, keep in mind, that state attorneys general, along with other financial regulators and private litigation will continue to increase their enforcement activity potentially with more aggressive state enforcement in areas such as RESPA and loan originator (LO) compensation plans.
SCA recommends the following action items for Lenders:
Though uncertainty at the CFPB currently exists, a stop work order at the CFPB will not and does not impact underlying statutes and regulations. Continue to comply and remain risk adverse.
Lenders must maintain adherence to compliance procedures. One such example is the HMDA filing website that is still online requiring submission of your 2024’ HMDA data no later than Monday, March 3, 2025.
Lenders should pay close attention and monitor state-level enforcement actions, as state agencies and attorneys general may very well increase their activity (and some have already begun).
Monitor for updates from the CFPB and other regulatory bodies regarding HMDA reporting and other compliance matters.
Communicate with SCA and our regulatory compliance consultants to support you and your organization, providing you with the answers to questions and concerns you may be experiencing during this time of CFPB uncertainty.
By contacting SCA and speaking with Bill Dolan, Director at (617) 694-2617 or via email at: Wdolan@scapartnering.com, you will be able to stay informed and remain proactive as together, we navigate through these unpredictable times and continue to mitigate potential risks and pitfalls to your lending operations.
