by Jeff Sovern
Blankenstein's essay appears in the National Review. Bureau-watchers may recall that Blankenstein served as an associate director at the Bureau during the Trump administration but left after a rebellion over blog posts he had written a decade earlier questioning whether use of the n-word is racist, among other things. Here's the opening of the National Review piece:
On April 1, the Consumer Financial Protection Bureau (CFPB) issued a “compliance bulletin” that warned mortgage servicers that “unprepared is unacceptable.” The agency, largely a brainchild of then-professor Elizabeth Warren, intimated that the proverbial hammer would fall on any mortgage servicer that does not allocate sufficient resources and staff to handling an anticipated wave of distressed borrowers. Left unstated is what the CFPB would consider to be sufficient resources, and where it gets the legal authority to make such a demand. What was clearly stated is that the agency wants to dictate how companies act beyond what the law requires, and is willing to use the strong arm of the government to get its way. This is the government equivalent of a visit from the mob: Nice business you got there. It would be shame if anything happened to it.
Unfortunately, this was not the first time the criminal syndicate masquerading as a government agency ignored the law and issued vaguely worded threats to regulated entities without regard to niceties like what the law actually requires. * * *
The Bureau's description of the Bulletin in question appears here, and that page links to the actual Bulletin. I'm not sure why Blankenstein claims the Bureau left unstated where it gets the legal authority; the Bulletin states "The Bureau is committed to using its authorities, including its authority under Regulation X mortgage servicing requirements and under the Consumer Financial Protection Act (CFPA), to ensure that homeowners facing the ongoing economic impact of the Coronavirus Disease (COVID-19) national emergency receive the benefits of critical legal protections and that avoidable foreclosures are avoided." The CFPB includes the Bureau's UDAAP authority. The Bulletin also cites the Equal Credit Opportunity Act and provides additional guidance abut what the Bureau sees as problematic behavior. I would have thought that an industry that criticized the Bureau for regulation by enforcement would have appreciated the advance warning of how the Bureau plans to use its enforcement powers.
So much ignorance from Blankenstein. He claims that the CFPB has no jurisdiction over Libre because it doesn’t actually offer the immigrant bond. Wrong. It brokers it, and that’s a “consumer financial product or service” under the CFPA. It’s notable that this fool couldn’t get hired by a law firm, but had to go to an obscure think tank/lobbying front.
My personal experience with the CFPB has not been cooperative or helpful. I filed a complaint with the CFPB about a Servicer’s violations of Regulation Z and TILA. The Servicer responded to the complaint by ensuring the CFPB that it would follow the rules explicitly. The servicer’s false and deceptive response prompted the CFPB to close the complaint without any further investigation or enforcement. I filed a second complaint to the CFPB informing them that the original complaint that was closed due to the servicers answer was in error because the servicer continued to violate Regulation Z and TILA. Again, no action was taken by the CFPB. To date, I have NOT received a statement for eighteen (18) months due to the servicers refusal to permit online access or produce any paper statements providing required accounting. The servicer told us that we can figure out our own balance on the mortgage. The servicer is also refusing to provide any information on our variable interest rate as well. The servicer told us to figure out our interest rate based on our contract. They are refusing to provide any statements, any accounting, and any information on our variable interest rate. They are also refusing to provide any online access to our account. This is the type of inadequate CFPB response to consumers that many people are experiencing. If the CFPB is refusing to do their job because they are working for or representing the lenders and servicers than what is the purpose of the agency?