"While attention has focused on changes at the federal level, state regulatory agencies have been quietly, and not so quietly, ramping up their examination capabilities. Reports from recent industry conferences indicate that many former CFPB staff members have found new homes at state agencies, bringing their expertise and institutional knowledge with them. This will ramp up capabilities at the state level, though it's not yet clear how the states will use this new power."
"They're not just filling gaps left by federal pullbacks; they're proactively building capacity to address lending practices within their jurisdictions. For lenders operating across multiple states, this shift creates a more complex compliance landscape, not a simpler one. Instead of dealing with one federal agency's interpretation of regulations, you may find yourself navigating dozens of state-specific examinations, each with its own priorities and focus areas."
A narrative suggests federal CFPB pullback and a government shutdown will ease mortgage compliance burdens. State regulatory agencies are expanding their examination capabilities and hiring former CFPB staff, increasing their expertise and institutional knowledge. State examination teams are growing larger and more sophisticated and are proactively building capacity to address lending practices. Lenders operating in multiple states face dozens of state-specific examinations with varying priorities and focus areas, creating a more complex compliance landscape. While the CFPB retains authority over major industry rules, states may spend more time examining and enforcing those rules, increasing enforcement activity rather than reducing it.
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