I found today’s The Title Report article, ” CFPB to Supervise Mortgage Servicers, will level the playing field” (subscription required) to be troubling. Attorney Richard Horn, former senior counsel for the CFPB, is promoting the direct supervision of mortgage servicing operations by the CFPB in an effort to level the playing field and reduce consumer risk.
Really? Is he kidding?
Don’t get me wrong–I am very much in favor of regulatory oversight for the industry. However, encouraging direct regulatory oversight of any independent operation creates a very slippery slope regardless of the perceived benefit. The article mentioned that the primary reason for this recommendation is that it would benefit ” those service providers that don’t care about compliance” and would subsequently provide protection for the consumer. As much as I agree that the industry needs oversight, I would never invite the regulator into a private-sector organization regardless of the perceived benefit. It is the responsibility of the management team to ensure safety, soundness and compliance. It is not the role of the regulator to manage any organization.
I’m reminded of an old saying with this news. If you let the camel’s nose into your tent, you will ultimately be sleeping in the desert.
Just my thoughts!!