'Aggressive' CFPB Enforcement Easing Under Mick Mulvaney, Analyst Says

Mick Mulvaney, the acting director of the Consumer Financial Protection Bureau, recently eased the regulatory burden for mortgage lenders and prepaid card issuers.

The Analyst

Height Financial Services' Edwin Groshans.

The Thesis

The CFPB is now a "kinder and gentler" agency, as it appears the compliance and legal risks to companies are now "lower," Groshans said in a research report. The agency doesn't intend to assess any penalties to companies who don't meet the new Home Mortgage Disclosure Act data collection requirements for 2018 origination, Groshans said. In addition, the agency expects to once again extend the effective date of the prepaid card rule.

"Neither of these changes is seismic, but they do indicate that the aggressive enforcement and supervisory actions taken by the agency under former Director Richard Cordray are abating under Acting Director Mulvaney," Groshans said. 

It's unclear what will occur with companies already facing enforcement actions or lawsuits that were initiated by the CFPB, the analyst said. A potential outcome would be the CFPB withdrawing actions against companies World Acceptance Corp. WRLD, Navient Corp NAVI and PHH Corporation PHH, but there is no evidence to indicate this is likely, Groshans said. 

Height is expecting both Worldwide Acceptance and Navient to pay penalties, although the totals could be "significantly less" than previously expected.

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