A recent blog by law firm Ballard Spahr reports the Consumer Financial Protection Bureau (CFPB) has begun to examine service providers on a regular, systematic basis, particularly those supporting the mortgage industry. The blog recounts information provided by the CFPB during an American Bar Association (ABA) Business Law Section meeting held May 7, 2017, stating: “The change represents a significant expansion of the CFPB’s use of its supervisory authority and will substantially increase the number and types of entities facing CFPB examinations.” To be fair, the blog does not specifically mention law firms or title and settlement agencies, but both law firms and title agencies are groups that clearly fall into the category of service providers “supporting the mortgage industry.”
Fortunately, there will be an opportunity to hear more detail about whether title and settlement agents will be subject to increased supervision. Ballard Spahr is conducting a free webinar June 13, 2017, from 12-1 p.m. (ET) which could provide an opportunity to specifically ask such questions.
For further background on this topic prior to the webinar, carefully read the CFPB’s Bulletin 2012-04, “CFPB to Hold Financial Institutions and Their Service Providers Accountable.” As is obvious from the title of this five-year-old bulletin, the 2017 announcement to directly examine third-party vendors is not an announcement of new policy, but clarification of how the CFPB intends to implement its longstanding policy to hold third parties accountable.