Originators have long lamented some of the CFPB’s decisions, and one bank is taking the regulator to court, alleging it is unconstitutional.
“One bank’s challenge to the CFPB will move forward after the D.C. Circuit Court of Appeals reversed dismissal of the lawsuit,” law firm Manatt, Phelps & Phillips wrote on the legal website lexology.com. “In its suit, Texas-based State National Bank of Big Spring argues that independent agencies must be led by multiple members (such as the five Commissioners of the Federal Trade Commission) and not a single person, as is the case with CFPB director Richard Cordray.”
And while the outcome is yet to be determined, mortgage originators are already arguing in favor of the suit’s objectives.
“The CFPB has a lot of power and it shouldn’t be ruled by just one person,” Steve Kirmish, president of Residential Mortgage Corporation told Mortgage Professional America. “I’m not so sure how far the lawsuit will go, though.”
Many of today’s financial institutions, and particularly smaller community banks, are becoming increasingly vocal in their concerns about the regulatory and compliance actions that they feel disproportionally affect them. Many feel that some of these actions create undue burdens on them, particularly because they have limited staffs and budgets compare to larger FIs. They argue that this is a strategic concern because it ultimately affects their profitability and ability to invest in needed operational improvements.
Overview by Ed O’Brien, Director, Banking Channels Advisory Service at Mercator Advisory Group
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