Cordray Is Coming — Look Busy!
Last month, the Obama administration wasted no time in 2012 when it appointed former Ohio Attorney General Richard Cordray as director of the new Consumer Financial Protection Bureau (CFPB).
The appointment made big news, of course, because it had been without the approval of Congress, which had been stonewalling the Cordray nomination for months.
Now that the CFPB has a director — somebody who can provide leadership and direction, somebody who can sign off on new changes and regulations — it’d be well to ask whether this brave new agency will be able to get anything done.
Obviously, the jury’s still out — barely any time has passed yet. But if I were to compare the CFPB to a sports organization, at first blush I’d say it’s resembling a hockey team.
Let me put it this way. When I go to watch my beloved Columbus Blue Jackets play, how does the game start? The players face off, the ref drops the puck, and boom! Action ensues. No stepping out of the batter’s box, no touchbacks, no wasted time.
Similarly, the puck seems to have hit the ice for the CFPB, because already you can see the agency ramping up its activity. Just in the last few weeks, it’s proposed more changes to the good faith estimates and settlement statements that lenders and title companies must produce for mortgage customers.
In the past, although different governmental agencies were providing documents for the same mortgage transactions, they really didn’t speak to one another — if you looked at your good faith estimate, it really didn’t make any sense when you looked at your settlement statement.
Now the CFPB is saying, “OK, here we are, we now have the ability to streamline and have these documents work together.” And it’s been proposing new forms that should be easier for consumers to understand. (Click here to learn more of the details of these forms.)
As a matter of fact, it just sent out the latest versions of the forms for my industry to comment on. Here’s the thing, though: To me, they’re even more confusing than before. Fortunately, this is still the prototype phase. I’m hopeful that with more testing, public input, and tweaking, the bureau will produce final versions that will be a benefit to consumers.
In closing -
Updating forms isn’t the only thing on Cordray’s radar. He’s also looking into beefing up federal oversight of all those check-cashing operations that have been proliferating. Because of the CFPB’s broad powers, it should be able to tell those businesses that they’ll have to conform to rules that benefit consumers, and I don’t think that’s a bad thing to see.
Will all this activity add up to substantive, necessary change, or just action for action’s sake? Only time will tell. After all, let’s face it: Even in the most raucous of hockey games, sometimes only a few pucks actually hit the back of the net.
Scott Stevenson
