Regulator Expands as Originations Recede

The Consumer Financial Protection Bureau (CFPB) has its 2024 business plan in place, and it includes increasing the agency's size by 50%. The bureau plans to hire 75 enforcement attorneys and support staff to boost investigations against "large market actors," according to an internal email obtained by American Banker. There was a similar hiring spree in 2021, when the CFPB increased staff by approximately 10%, but this is a far more aggressive expansion drive. Though the leaked email indicates the bureau has large institutions in its sights as the need for the hiring push, the CFPB is watching everyone in the industry, regardless of the size of your organization. Lenders can now access and review the same data the agency monitors for patterns and violations, and there's more than one upside to looking at it.

Industry law firms have warned that regulators compare companies with their peers in specific market service areas (MSAs) to look for differences performance in serving segments like LMI and MMCTs. The data they use to make these analyses is available to lenders; but there's more than one way for companies to use it to their benefit. Organizations can access the following data by year, quarter and month: 
 

• Loan type: Conventional, FHA, VA, Jumbo
• Number of loans using DPA or SPCPs
• LMI and MMCT business by branch and loan officer
• Company, branch and loan officer stats compared to MSA overall

This type of data allows companies to self-evaluate to protect themselves from regulatory scrutiny or peril; but it can also uncover long-term opportunities. Granular views of an array of stats are enlightening and can inspire leaders to plan differently to improve compliance and performance. 
 
Lenders are acutely aware that the pool of business has shrunk exponentially in the last two years, and it's going to remain tight for a while. The Mortgage Bankers Association forecasts that total origination volume will finish 2023 at approximately $1.7T, down 62% from 2021's record high. Loan applications began Q423 at levels not seen since 1996 and the MBA predicts volume will only increase by $3B year-over-year in 2024 and 2025. Everyone wants to increase market share, but successful companies and producers will take steps to increase the market itself. Underserved markets are an opportunity for organizations to shepherd new groups of consumers along the path to homeownership.  
 
The CFPB is growing. What's your growth plan for 2024 and beyond?

Jeff Walton is CEO of InGenius. With over 35 years in home mortgage and as a CEO and President of large national mortgage companies, Jeff is focused on helping the industry achieve high performance using actionable intelligence. Interested in learning more? Book an intro call with InGenius Data.