On June 30, the Obama Administration propose creation of a new Consumer Financial Protection Agency (CFPA) to “promote transparency, simplicity, fairness, accountability, and access in the market for consumer financial products or services.”
The reality is that a new federal agency will be given unprecedented power to write and enforce rules for all consumer financial products and services and the individuals that provide them. This means you. Settlement services providers, abstracters, attorneys, title insurers and potentially real estate appraisers, pest inspectors, surveyors and others who are part of a mortgage closing transaction are swept under the new agency.
Some elements of the plan make sense, like combining existing authority under RESPA and TILA into a single regulator. However, the CFPA powers are so broad that they conflict with existing state regulation of the title industry. We strongly believe that CFPA authority should be limited to existing authority as spelled out under RESPA and TILA.
Property transfer is accomplished at the local level, according to local custom and governed by state law. Regulation of local property transactions by Washington bureaucrats is a recipe for frustration and malfunction.
On July 15, ALTA signed an insurance coalition letter opposing any inclusion of insurance in the legislation and on July 20, ALTA signed a letter with a broad group of trade associations representing millions of businesses of all sizes across the country from diverse sectors of the economy that urged Congress to approach this thoughtfully. Shortly afterwards, we gained a modest victory when the House Financial Services committee announced it would delay a planned July vote until September.
Below is information regarding the proposal to revamp the U.S. financial regulatory structure.