Posted on 10/28/2022 11:03:45 AM PDT by EBH
A court tossed out a regulation written by the Consumer Financial Protection Bureau for payday lenders last week, saying the agency's funding was unconstitutional and that it, therefore, lacked the ability to curb the industry.
The U.S. Court of Appeals for the Fifth Circuit voided a CFPB rule that prohibited payday lenders from debiting the accounts of customers who miss a payment without getting their consent first. While the ruling applied just to that regulation, financial service attorneys say it muddies the agency's authority and has the potential to upend all of its rules.
"The Fifth Circuit's ruling potentially calls into question every single rule, guidance and order that the CFPB has issued — as they all trace their origins to the CFPB's unconstitutional self-funding structure," regulatory attorneys Anthony DiResta and Luis Garcia of Holland & Knight wrote in a note to clients Tuesday.
If the agency's legal authority is undermined, it could have a profound affect on home lending markets — an industry that's prone to disruption when laws are murky, especially as interest rates rise.
"Anything that disrupts the mortgage market is potentially going to make it even harder for homebuyers to qualify for a loan," said Patricia McCoy, a professor of law at Boston College.
McCoy points to Georgia after the state passed a law in 2002 intended to protect consumers from predatory loans by allowing them to seek punitive damages from the loan originator and whoever bought the loan. That extended the potential damages to the Wall Street banks as well as mortgage investors Fannie Mae and Freddie Mac.
Top credit-rating agencies refused to rate residential mortgage-backed securities pools containing loans that originated in Georgia, which had a chilling effect on the MBS market.
"The Fifth Circuit's decision threatens to paralyze mortgage lending in...
(Excerpt) Read more at msn.com ...
I always sign contracts without looking./s
How close to 2008 are we if numerous people are in a position where they have to do so?
I do not think that is what they are saying.
If you want to buy a house just write a check for it. No mortgage.
I want the CFPB extinguished.
Fauxcahontas is mainly responsible for adding this bloated, woke, progressive agency to the Fed.gov roster.
Its her grift and her power-base.
“ Who is using payday loans to payoff a mortgage?
How close to 2008 are we if numerous people are in a position where they have to do so? ”
Two unrelated issues.
The payday lawsuit showed the CFPB is unconstitutional .
CFPB regulates many types of consumer transactions
Pocohauntas be on war path!
No, this something to celebrate.
Pssst.. They didn’t fix the problems from 2008. It’s just papered over! (Get it? Papered over!)
Yup this thing got started by Harvard Law School professor Elizabeth Warren.
Predatory lending in the home mortgage market. Although, one might argue with the recent run-up on mortgage prices and getting a standard fixed rate 30yr was near impossible, might qualify as predatory. Many of these loans had a balloon rate attachment after 5 years.
Would you want a balloon rate 5 years from now, given the current atmosphere? Probably not.
“Pocohauntas be on war path!”
Beware “Grey Beaver”
When Obama and the Dems set up the CFPB, they had it where the CFPB would receive direct funding by a request made to the Federal Reserve by the director of the CFPB to a cap equal to 12% of the Federal Reserve’s budget thereby bypassing Congress. Evidently the Dems did this for they knew in the future, the Reps would control the White House and Congress and could completely defund the CFPB so they bypassed funding by Congress.
Yep, they were hoping it would be like the EPA but only worse for America.
Bwahahahaha
Ok sure right
I think because the court ruled that the agency is unconstitutional it calls into question all of the agency regs which would include mortgage regs
gov will appeal no doubt
It was okay that it was unconstitutional, and the mortgage market was operating fine, despite the efforts of the Demagogic Party.
In my opinion, any law, rule or regulation that can deprive you of life, liberty or your personal treasure cannot be passed or enforced by any government agency. These have to be passed by an elected representative.
These so called regulations, in my opinion, are unconstitutional, and those that enforce them are defying the constitution.
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