“As you’ve seen the CFPB step back, under Dodd Frank the states have the authority to enforce federal consumer financial protection laws,” Idziak told Mortgage Professional America. “There has definitely been an uptick among especially blue states and especially AGs. And that brings a whole other interesting wrinkle.
“Where you have your state regulators in the space, financial regulators, they’re very familiar with consumer credit mortgages, because it’s what they do every day.”
Attorney general enforcement
Idziak noted that attorneys general are generalists. As a state’s top legal official, they have to be well-versed in a wide range of legal topics. And while some likely have a mortgage lending background, others might come to brokers and lenders not knowing exactly what is involved.
“If you have an AG reaching out, you definitely need to be aware that, even if you don’t think there’s anything here, this is obviously partially a political issue,” he said. “You are going to be telling your story for the first time to someone who isn’t familiar with what you do. I was talking to a lawyer, and he said they had a meeting with a state AG, and they said, ‘So, what’s the difference between a banker and a broker?’”
He said this can be an opportunity for brokers and lenders to take control of the narrative from the beginning.
