Yesterday, while speaking at the 2013 ABA Annual Convention, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray defended his agency’s track record on mortgage rules and consumer protection, while emphasizing that the CFPB will not expect “perfection” in the months after the Qualified Mortgage standards take effect next year.
Cordray said that the CFPB has been less strict in its mortgage rulemaking than the Dodd-Frank Act’s statutory text would have been, pointing out that the CFPB crafted several exceptions for small lenders and servicers and created a QM safe harbor. He also emphasized his agency's post-rulemaking implementation guidance. “We could have left you entirely on your own,” he said, noting that instead “we have made it a point to engage directly and intensively with financial institutions. Successful compliance is good for everyone -- consumers, industry and regulators.”
During a Q&A session, ABA President and CEO Frank Keating pressed Cordray on January's impending deadline for mortgage rule compliance, stressing the vendor readiness and technological challenges that have left many bankers unsure of whether they can be in full compliance. “If you’re making good-faith efforts to come into compliance and are pushing your vendors, we’re not going to expect perfection,” Cordray said.
When Keating mentioned the risk of private litigation under the rules, Cordray predicted that “you’re not going to see some outburst of litigation in the first months after this takes effect.” Cordray also noted bankers’ concern about the effects of the rule on the mortgage market but called some of those concerns “overblown.”
Read Cordray’s remarks.
View the CFPB’s new one-page QM guide.