Here’s a hypothetical scenario: Let’s say the staffers at the Consumer Financial Protection Bureau (CFPB) remain forbidden to work until Jan. 21, 2029. What would the mortgage servicing regulation landscape look like?
At the Mortgage Bankers Association‘s Servicing 2025 Expo in Dallas on Wednesday, top servicing executives said that even in a friendlier regulatory environment, it would not be wise to ignore long-established servicing policies like loss mitigation and wantonly take on risk.
For one thing, prior to his firing, former CFPB Director Rohit Chopra left state regulators a roadmap to carry on the agency’s legacy in case it’s de-fanged. New York and Massachusetts are still positioned to go after mortgage servicers (primarily through UDAP), but the other Democratic states could also follow Chopra’s suggestion and pass new legislation. That, however, probably wouldn’t have much impact on 2025, speakers said.
“We’re all probably in agreement the CFPB isn’t going to go away, but it could be weakened, de-fanged, less of an aggressive agency,” said Nanci Weissgold, an attorney at Alston & Bird. She added that Republicans tend to take a narrower read on statutes that Republicans, and Chopra priorities like junk fees, non-bank registry and the “public shaming” of so-called repeat offenders “is hopefully going to dissipate.”
It’s also just wise to remember that the government has a long memory, said Josh Kotin, a lawyer at Cooley. Thanks to Dodd-Frank provisions, a new administration on Jan. 21, 2029, could review servicing practices over the prior four years and launch an investigation.
“Dodd-Frank is mind-numbingly agile and could look back to 2025,” Koblin said.
A patchwork of federal regulators at other agencies will also likely take on some CFPB duties if it’s de-fanged, several speakers said on Wednesday.
“There is a lot of uncertainty with the CFPB,” said David Schneider, CEO and president of Cenlar. “That void will be filled. We’ll be in a highly regulated environment for years.”
