It is no secret I have a fair amount of animus toward the CFPB, which, since its creation in 2010, regarded itself as “the new sheriff in town” and proceeded to “push the envelope” in the exercise of its enforcement practices. One of its more offensive practices was its use of “regulation by enforcement”.  Simply stated, it would figure out some business model it didn’t like, but wasn’t illegal per se’, and bring an enforcement action against the company or companies for doing something that had heretofore, been regarded as legal.

Once it beat the companies into submission through fines and negative publicity, the rest of the industry would take the hint, and change, go out of business, or fail. In Russia that might be an acceptable M. O., but in the United States, I’d like to think that such  overreach would be frowned upon.  However, in the past, there was little widespread condemnation, even though the practice was little more than the ex post facto enforcement of what it decided, sua sponte, what the law should be.  And how could there be any real pushback? The Bureau was a law unto itself; it was run by a single administrator, and did not derive it’s funding through congressional appropriation. In short, it could figuratively stick its finger in the eye of any business with impunity.

Not so today. Now, in the words of a recent Wall Street Journal article, here, the CFPB has “pushed its last envelope”. For more on what we can look forward to in 2018, see links here, here, and here. ~PCQ



DecisionAs with much that the CFPB does these days, there is some that is good, some bad, and some, just plain ugly.  And for a cynic like me, everything – even the good stuff – seems to be imparted with a slightly paternalistic and patronizing tone.

You see, in the CFPB world view, the American people are divided into two basic camps: One is made up of evil, bloodsucking, vampire squids, looking to latch onto members of the other camp; the gullible, naïve, dumb and dumber set, who were all born yesterday. Continue reading “TRID Fatigue? Here’s What Buyers Need To Know (In Plain English)”

DecisionIn the July 23, 2015 Wall Street Journal, former Senator Phil Gramm, wrote about the “double whammy” effect of Dodd-Frank (here). First, it “…has hit the banking industry hard, hurting the recovery.” But second and worse, “…is its effect on the rule of law.” Continue reading “How Dodd-Frank Destroys The Rule Of Law”

BullyAugust 1, 2015 is showtime!

That’s the date that the TILA/RESPA integrated disclosures rules (“Rules”) go into effect, compliments of the ubiquitous Consumer Financial Protection Bureau (“CFPB”), devil spawn of Dodd-Frank. Continue reading “The TILA-RESPA Integrated Disclosure Rules – Are You Prepared?!”

Decision“Bureaucracy destroys initiative. There is little that bureaucrats hate more than innovation, especially innovation that produces better results than the old routines. Improvements always make those at the top of the heap look inept. Who enjoys appearing inept?”  ― Frank HerbertHeretics of Dune

Just to refresh memories: Continue reading “The CFPB – Are We There Yet?”

Fotosearch_cb008926[1]I have been critical of the Consumer Finance Protection Bureau (“CFPB”) for many things, but providing good easy-to-understand information is not one of them.  The CFPB, or the “Bureau,” as they like to call themselves, reminds me of the stereotypical Catholic School nun, who was a great teacher…until you crossed her – and then she’d whack you across the back of your head with a stiff wooden yardstick. Of course, today, the Bureau’s version of the wooden yardstick is a huge fine, public humiliation, and a finger-wagging threat not to cross them again. Continue reading “HyperLynx: Fundamentals of Purchasing a Home”

whiplash“24% of all purchase loans have a debt-to-income ratio greater than the CFPB’s Qualified Mortgage rule limit of 43% [of debt to income], a new series high.“  ~Mortgage Risk Index-March 2014 Release, AIE’s International Center on Housing Risk

Hmmm. I thought the CFPB was the new sheriff in town, protecting the Little Guy from the villainous Big Banks. Isn’t that why it created the Qualified Mortgage or “QM” rules?  Wasn’t QM that safe harbor, giving peace and comfort to lenders who stayed within the guidelines deemed “safe”?  Wasn’t a debt-to-income ratio[1] over 43% deemed “risky”?  And for those lenders foolish enough to stray outside of the QM box, they became subject to the draconian Ability to Repay, or “ATR” rules, which, if violated, gave borrowers the right to sue lenders for giving them loans they should not have taken out. Huh? Continue reading “Housing Risk In 2015: It’s Déjà Vu All Over Again!”

iStock_000018564106Small (2)In a November 25, 2014 article by Adam D. Maarec of Davis Wright Tremaine, my old alma mater, posted here, he notes that attorneys general from sixteen states signed a letter to the ubiquitous, omniscient, and otherwise ever-vigilant, Consumer Finance Protection Bureau, aka the “CFPB” – or as they like to refer to themselves, using the Hoover-esque nom de plume, “the Bureau,” urging that it adopt rules imposing “prohibitions, conditions, or limitations on the use of pre-dispute arbitration clauses in consumer agreements for financial products or services.” Continue reading “Querin Law: State AGs Ask CFPB To Limit Arbitrations”

Thumbs down02“…the United States is still producing around $800 billion a year less in goods and services than it would if the economy were at full health, and as a result millions of people aren’t working who would be if conditions were better.” Neil Irwin, senior economics correspondent, N.Y. Times, Aug. 4, 2014.

If the U.S. economy were a person, we’d characterize them as suffering from chronic malaise, interrupted by occasional bursts of vitality. In a recent N.Y. Times article subtitled “A Recovery in Need of a Recovery” (here), author, Neil Irwin, the paper’s senior economics correspondent, does an excellent job identifying and discussing those sectors of the economy in need of a Venti Americano, with a few extra shots of caffeine. Continue reading “America’s Economic Malaise And The Importance Of Real Estate”

congresscloudsFormer Congressman Barney Frank testified before the House of Representatives Committee on Financial Services on Wednesday, arguing that the Dodd-Frank Wall Street Reform and Consumer Protection Act and the voluminous set of regulations that followed shortly thereafter was a positive for the economy and safeguarded the American public from ever having to face an economic down turn the likes of the great recession ever again. Frank, a former chairman of the committee he now sat in front of, was one of five witnesses called before the committee to assess the impact of the law from multiple angles. He was the lone witness to testify in favor of the law.  MReoprt, July 23, 2014

It’s been four years since Dodd-Frank was signed into law.  So how’s it going?  Has Wall Street been reformed? Have there been any innovative law protecting consumers from themselves? Continue reading “Q-Rant! Barney Defends Frankendodd!”