CFPB Faster to Regulate than Other Federal Agencies
The Consumer Financial Protection Bureau’s (CFPB) median pace of creating new regulations is 3.5 times faster than that of significant executive agencies. This revelation, coming from a recent report by American Action Forum (AAF), doesn’t come as a surprise to professionals working in the real estate industry who are burdened with CFPB regulation on a daily basis.
Created in July 2011 under Title X of the Dodd-Frank Act, the CFPB has finalized 49 rules while taking an average of 197 days to propose and finalize each one. According to Sam Batkins at AAF, “Just 26 (out of 49) of those measures have imposed $2.8 billion in costs with an associated 16.9 million paperwork burden hours. For perspective, it would take 8,450 employees working full-time (2,000 hours) to complete the agency’s new recordkeeping and reporting requirements.”
On top of the billions in regulatory cost, the CFPB oftentimes gets the rules wrong, causing confusion and uncertainty for mortgage lenders, realtors, and homebuyers. 13 rules issued by the CFPB had to be corrected, including the most recent “Know Before You Owe” also known as TRID. Heritage Action Real Estate Professionals sent a letter to the CFPB in July calling for clarification on this issue.
While fighting back on individual CFPB regulation is necessary, Congress must work to abolish the bureau and return financial regulation back to the relevant pre-existing agencies. Passing Rep. Jeb Hensarling’s (R-TX) Financial Choice Act would be a good start to curtail the power of the CFPB and repeal or replace some of the worst provisions contained within Dodd-Frank.