When the Consumer Financial Protection Bureau (CFPB) was created, it had, and still has, one mission — to protect consumers. In so doing, it has looked into every aspect of consumer finance to see where reforms were needed. It has looked closely at mortgage lenders and servicers and those that work with them.
This has included a close look at the title and settlement services industries, which has led to a change in the way they interact with partners in this relationship-focused industry, as well as a focus on compliance above all.
Friday, April 13, 2012, the CFPB handed down Bulletin 2012-03, in which it stated that financial institutions under bureau supervision may be held responsible for the actions of the companies with which they contract. The bulletin notified regulated entitles and their service providers that the bureau would take a close look at service providers’ interactions with consumers and hold all appropriate companies accountable when legal violations occur.
At the time, CFPB Director Richard Cordray said: “Consumers are at a real disadvantage because they do not get to choose the service providers they deal with — the financial institution does. Consumers must not be hurt by unfair, deceptive or abusive practices of service providers. Banks and nonbanks must manage these relationships carefully and can be held accountable if they break the law.”
“The CFPB has dramatically changed how we view the regulatory environment,” said Frank Pellegrini, president and CEO of Prairie Title.
For the rest of this story, and all the additional content and insight available in our 16-page 2016 CFPB Anniversary special report, download your free copy of the report here.