TBA and TMBA challenge CFPB on junk fees

The Texas Bankers Association (TBA) and Texas Mortgage Bankers Association (TMBA) have jointly challenged the Consumer Financial Protection Bureau in response to a request for information (RFI) on residential mortgage transaction fees.

Regardless of the fact that fees “represent compensation for services that are necessary to originate and close a mortgage transaction and are services often required to be performed by statute or regulation,” the Biden Administration and its CFPB leadership continue to imply that these are so-called “junk fees.

“It appears that CFPB has predetermined that there is consumer harm here before it has gathered all relevant information and objectively analyzed the data,” wrote TBA General Counsel Celeste Embrey and TMBA General Counsel John Fleming. “Our members’ costs are driven by the market,” Embrey and Fleming continued. “The lenders do not control the costs of third parties providing closing or settlement services, and we believe it is inappropriate for the Bureau to imply that they do, whether through leadership pronouncements, requests for information, or regulatory changes.”

As it reviews RFI data, TBA and TMBA exhorted the CFPB “to understand how its regulations impose increasingly expensive cost burdens upon lenders that are ultimately paid by consumers,” noting that costs of regulatory compliance often drive small community banks out of residential mortgage lending.