In a June 19 speech to the Exchequer Club, CFPB Director Richard Cordray advised that the Bureau fully expects all institutions to be in compliance with the new mortgage rules when they become effective in January 2014.
Director Cordray acknowledged that the CFPB has revised and will continue to revise the rules, but stated that the CFPB does “not believe that this process should slow down the implementation process at any lender or servicer.” To support the implementation deadlines established by the CFPB, he stated that “Congress established an outside deadline for the effective date of the rules it directed us to write, and we set the effective date to reflect that deadline.”
While, the CFPB has broad authority under Dodd-Frank to make exceptions to statutory requirements, apparently it does not believe exceptions to deadlines are appropriate, even though the industry has only one year to implement the most sweeping changes in mortgage regulations in this country’s history. The Director also failed to acknowledge that the CFPB went well beyond the mortgage servicing reforms mandated by Congress by adopting requirements not expressly provided for in Dodd-Frank that require significant staff, systems and operational changes.
For example, the CFPB adopted requirements related to information systems, early intervention with delinquent borrowers, continuity of contact with borrowers, and evaluation of borrowers for loss mitigation that even the Bureau acknowledged are “discretionary rulemakings” in the preamble to the RESPA servicing rules. Yet the CFPB saw fit to apply the Dodd-Frank implementation deadlines to the requirements. It is troubling that an agency committed to transparency is justifying the imposition of regulatory requirements based on a statutory timeframe when the statute does not require the CFPB to adopt the requirements.