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There’s been big talk of reforming the reformer: Dodd-Frank and overhauling its controversial child: the Consumer Financial Protection Bureau (CFPB). That’s one of the predictions about what the new GOP majority in Congress means for the housing and financial industries, according to Stanley Street, President of Street Resource Group.
“With this next Congress, we’re going to have a lot of talk but not action. And you have to remember it will be just about six months for anything to happen before people start talking about 2016 elections,” Street said in an interview with HousingWire. “As long as GSEs are making money, there will be very little priority for change.”
This contrasts with what Julian Castro, Secretary of Housing and Urban Development recently said in a HousingWire interview, “housing finance reform certainly has been a priority and will continue to be a priority.”
Senator Elizabeth Warren, one of the architects of the CFPB and who was once considered for director, was recently put into a position of leadership by her fellow Democrats. This could be a message that despite Republicans’ desire to reset the Bureau, a line will be drawn as to how far they could go with reform. Street said that Warren’s new positioning may be about the Democrats wanting to moderate the progressive and outspoken likely Democrat candidate for president in 2016.
“I think it’s very interesting that she’s been put into Democrat leadership circles and that’s an implicit endorsement, but it could also be that they’re trying to tame her as well,” Street said.
Street also cautioned that while the CFPB may have a defender in Warren and that this doesn’t mean that the agency will be left intact, Congress will have more input that’s independent of the White House.
“The CFPB will be high on the agenda. No one can debate that CFPB protects consumers’ interest, but it’s the execution and lack of oversight that is the problem. The GOP will want to bring the CFPB back into the appropriation process and out of the Fed, and bring the leadership under something like a five-member committee rather than under a single person. I don’t think anyone is necessarily against that and it’s an issue both sides can come together on as long as they don’t go against the mandate. CFPB needs a structural change but not a mission change,” said Street.
Resources:
HousingWire. GOP Congress likely to reform CFPB in 2015