Mulvaney: CFPB Still Protecting Consumers

Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, came before thousands of REALTORS® Tuesday to dispel the idea he’s trying to get the federal government out of the business of protecting consumers, as critics have charged.

“Many bureau employees were convinced I was trying to burn the building down,” he said at a regulatory forum on the first day of the 2018 REALTORS® Legislative Meetings & Expo in Washington, D.C., on May 15. Rather, Mulvaney said he’s directing the agency to do what it’s been empowered to do without stretching the agency’s mandate. “We’re just trying to get back to basics.”

Mulvaney said the agency is mandated by statute to enforce consumer protection laws and there’s been no slackening in that effort. “We’re still going after those who break the law,” he said. “There are still bad actors.”

What the agency isn’t doing anymore, he said, is going beyond statute to go after practices that the former director of the agency didn’t like, but that are not illegal. “Regulation by enforcement—we’re not doing that anymore,” he said.

He cited the agency’s treatment of marketing service agreements as an example of the kind of overreach he’s trying to curb. In the past, CFPB went after these agreements aggressively. That action came despite the fact that the U.S. Department of Housing and Urban Development made it clear marketing service agreements were legal as long as the arrangement was disclosed to consumers and compensation arrangements weren’t tied to the amount of business generated.

The agency suffered setbacks in court in such efforts to curb marketing service agreements, including in a high-profile case in which it tried to levy a $109 million fine against PHH Corp., a mortgage services company. In January, the D.C. District Court vacated the fine. Mulvaney cited this as an example of why they’ve chosen to scale back: “We are out to get the bad guys, not make you look like a bad guy if you’re not.”

Industry professionals at the forum responded positively to the agency’s new approach. “It really is a sea change at the bureau,” said Phillip Schulman, an attorney who helps real estate companies and lenders navigate the federal regulatory landscape.

Tim Wilson, CEO of Prosperity Home Mortgage, said the shift has allowed lenders to focus more on delivering better products to consumers, rather than trying to figure out what’s right and what’s wrong under the agency’s enforcement of settlement rules. “I sleep better now,” he said.