Lately, the Consumer Financial Protection Bureau (CFPB) has been the subject of extensive criticism from both Washington and consumer advocacy groups. In March, the Bureau’s employee performance rankings were accused of racial disparities, and later that month the agency caught flak from the Senate for increasing its headquarters’ renovation budget.
This month, the CFPB has come under fire again. The Banking, Housing, and Urban Affairs Committee grilled director Richard Cordray on the information included in the National Mortgage Database. Sen. Mike Crapo claimed the collection of personal information “encroaches on Americans’ privacy,” and made his concern clear in a heated back-and-forth with the director, as noted by the Washington Free Beacon.
“I have the concern that the government collecting this phenomenal amount of data about private citizens could be used in an evasive way,” Crapo is reported saying in the Washington Free Beacon. Director Cordray countered by explaining that the data’s purpose allows for better insight into the mortgage market, and could possibly prevent another financial crisis.
The CFPB also came under fire from the Financial Services Committee for not providing enough financial literacy training. According to HousingWire.com, Congresswoman Shelley Moore Capito noted that approximately $40 million is spent by the CFPB for financial literacy, but their efforts at promoting it had been lackluster at best.
In response to these accusations, the CFPB expanded their eRegulations tool, designed to make mortgage rule more accessible and easier to understand. They will also be using the expansion to provide assistance in electronic mortgage closing.
“We strongly believe that electronic closing solutions – known as eClosings – can lead to more knowledgeable consumers and a much better process for everyone involved,” as Cordray was quoted in HousingWire.
Having more knowledgeable consumers can help drive homes sales by streamlining the mortgage application process. Still, risks will always be inherent in mortgage lending, and banks can protect themselves with application processing software that can quickly determine the creditworthiness of applicants.