Peter Idziak (pictured top), a senior associate and mortgage attorney at Polunsky Beitel Green, said some of those states have even begun passing laws that would have been largely unnecessary with the CFPB still in place.
“I definitely think just in the industry as a whole, as we’ve seen the CFPB step back from both supervision and enforcement, that you’ve seen states step up, and that’s occurred in a couple of different ways,” Idziak told Mortgage Professional America. “One, you’ve seen more active state regulators and state AGs either enforcing existing state laws or federal consumer protection laws, because they are able to enforce a lot of those under Dodd-Frank.
“You’ve also seen states themselves start passing legislation in areas that maybe in the past, they were a little less interested in, because there was a feeling that you had a federal regulator that was enforcing a federal standard.”
Nobody to call
When federal regulators were enforcing a federal standard, if there were any questions at the state level, they would just pick up the phone and call the CFPB. Idziak said he’s heard that’s no longer an option.
“In the past, and I’ve heard this from more than one regulator, if they’re looking to a federal rule, like a CFPB rule, they’ll call up the CFPB and ask them how they interpret it,” Idziak said. “And one regulator told me, ‘It’s their role. I’m going to follow their interpretation.’ But if there’s no one to call anymore, this is where you get regulators, because the CFPB isn’t responding, now they feel they have more freedom. They’re creating or interpreting rules in their own way.”
