Cordray promotes Mini-CFPB in California
Articles by: Richey May, Feb 17, 2020
California Governor Gavin Newsom is taking steps to ramp up enforcement efforts on financial services entities doing business in the state, citing federal withdrawal and inaction by the CFPB. The Governor’s recently released 2020-21 budget proposal includes a bill titled “California Consumer Financial Protection Law” co-authored by former CFPB director Richard Cordray himself. It would effectively inject the Department of Business Oversight (DBO) with additional resources and expand its authority to examine and enforce compliance with laws like the Military Lending Act (MLA) and the Dodd-Frank Act provisions related to Unfair, Deceptive, or Abusive Acts and Practices (UDAAP). Such authority is unprecedented as it would give the DBO (a state bureau) even more power than its federal equivalent, the CFPB. Cordray defends this peculiarity by stating his interpretation of Dodd-Frank: “To put it simply, the law says clearly that federal law sets a floor, not a ceiling, on consumer financial protection in this country. Congress thus opened the door for more vigorous protection of consumer rights through state officials who can ensure that these laws are strong and that they are enforced effectively.” Can it really get even tougher to do business as a mortgage lender in California? All signs point to yes.
Richey May will continue to monitor the increased enforcement efforts that will impact mortgage bankers, especially as more states could follow suit.
In helping numerous mortgage lenders either address or prevent Consent Orders and Settlement Agreements, Richey May has become a leading expert regarding the California DBO’s compliance expectations and enforcement practices. Whether it’s per diem interest, trust account reconciliations, or fair lending issues, Richey May can deliver guidance, supervision and peace of mind. Contact us today to get started.