Real estate

Legal experts weigh in the CFPB and the future of the regulations

It is unclear who would enforce the Respa if the Trump administration succeeded in getting rid of the CFPB, for which an act would require CongressBut Cain believes that that task can fall back on HUD.

“If the agency is not there to manage this stuff, someone and it might have to go back to Hud, but this job was taken away for a reason from Hud,” Cain said.

It is due to this uncertainty that enforcement experts believe that state rulers will increase their efforts to enforce both the federal respa status and all respa rules at state level.

“I think we will see that some of the state lawyers are participating general to try to circumvent the loss of power that the agency has,” Marx Sterbcow, a respa lawyer and the managing partner of Sterbcow Law Groupsaid.

Holly Spencer Bunting, a lawyer at Mayer Brown Who also specialized in respa believes that we will see the lawyers -general in Democratic states actively in maintaining respa if the CFPB is not.

“I absolutely think that the supervisors in those states are the ones who try to fill the gap earlier,” said Bunting.

But leaving states to enforce Respa has the potential to make things a bit messy.

“The problem is that you don’t get uniformity,” said Cain. “What the Attorney General thinks of New York, the attorney general of Pennsylvania, Colorado and California think that all can be different things, and so it becomes very difficult to exploit a company in several states. You exceed a state line and it can be a whole new set of rules. “

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Respa lawyer Rich Andreano van van Ballard Sphar Says that such a situation would be incredibly disturbing.

“Perhaps you see more of what state rulers have their own views about what they think is allowed or not allowed under respa and then we end up with 30 different views on the status and that would not be a good thing,” said Andreano. “There are already differences in state laws and we acknowledge that, but there is one respa, but to have so many different interpretations of the same status, I think that industry would argue for the federal government to step ahead and regulate things. “

While the enforcement of the Respa to state rulers certainly has its disadvantages, enforcement experts also see some positives.

“A positive for participants in the industry who do their utmost to satisfy and worry that the bad actors with less federal enforcement will increase them and further disadvantage on the market is that there is still someone who forces this articles of association , “said Bunting. “I think that will offer some comfort to those people.”

Bunting also noted that something that industry can regard as positive that consumer groups can regard as a negative is that state rulers may not have the same expansive enforcement fine as the CFPB.

“So the enforcement of the state can lead to fewer fines of civil money or less extensive fines than if the CFPB would take those actions,” she said.

Although state rulers miss the same fine authority as the CFPB, Andreano believes that they are better equipped to find the small bad actors.

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“Sometimes the little players think they can get away with violations because they are so small that they don’t think they will be found, but the states are the ones who can find the little boys,” said Andreano. “So, with the involvement of the state, we see a more level playing field within certain states.”

With the CFPB that now comes under the leadership of McKernan, awaiting his confirmation hearing, it can still be considered whether the CFPB will resume its supervision and control activities. His record shows that when McKernan served as a board member of the FDIC, He insisted on stronger supervision of large asset managers, which suggests that the CFPB can again become an active regulator.

According to Sterbcow, the best individuals of the CFPB in the enforcement and regulations department were satisfied with the news of the nomination of McKernan.

But regardless of who is in charge, Bunting expects the CFPB to eventually be fulfilled and for enforcement to resume.

“I think we will see enforcement that is comparable with under the first Trump administration, where it focuses on very clear violations of the law, as well as issues that have direct damage to the consumer and where refund can be provided,” she said . “I feel that it is where we are going, regardless of who the CFPB leads.”

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