Kriss Law/Atlantic President/CEO, Scott Kriss, Esq., Featured In Banker & Tradesman Piece

Needham, MA--Kriss Law/Atlantic's President and CEO, Scott Kriss, Esq., was featured in a recent Banker & Tradesman article discussing the CFPB. The full text of the article follows:

As is the case at many government institutions, this is time of uncertainty at the Consumer Finance Protection Bureau.

The very constitutionality of the watchdog organization’s structure has been successfully challenged and will soon be decided in federal court, President Donald Trump has pledged to make deep cuts to the Dodd-Frank Act that created the organization.

But since change is inevitable, there are opportunities to improve the structure of the agency and perhaps improve its standing in the communities it oversees, said Massachusetts conveyancing attorneys. (Mortgage lenders and brokers, who are most directly affected by the CFPB and its enforcement actions, did not return requests for comments for this story.)

“The idea behind the creation of the CFPB is a really good one,” said Richard Hogan, vice president and chief compliance officer at CATIC. “I lived through the collapse of the housing market and the great recession that followed. Many, many people were harmed because of that. I like the idea of an agency that looks out for consumers. I’d just like to see more clarity in the regulations. People just want to know what they can do and what they can’t do.” Hogan cited the CFPB’s charging and fining of lenders for marketing service agreements (MSAs) as an example.

“They do bring actions against companies for MSAs and seem to pick and choose who they’re going to go after,” he said. “Many times, you look at these settlements, they don’t conform with the regulations or the law. … People don’t know what’s allowed and what isn’t.”

There are real consumer benefits to different real estate professionals working close together, as long as it’s not a pay-to-play arrangement, said conveyancing attorney Scott Kriss of Kriss Law and Atlantic Closing & Escrow.

“We’d all like more information on that. Affiliations with other professionals can benefit the customer,” Kriss said. “But there were people who were just paying for business before the CFPB. It’d be nice to have more clarification on what is allowed.”

The famously complex and dense rules have spawned a new industry – litigating the regulations themselves.

“I’m using the courts to figure out what those rules mean,” said Josh Denbeaux, an attorney with Denbeaux & Denbeaux in New Jersey. “We’re litigating RESPA and other statutes to try to figure out what they actually mean.”

But while he’s litigating, Denbeaux said, he doesn’t want to see the CFPB weakened or eliminated. “It would be a terrible thing to get rid of the CFPB,” he said. “When the industry knows there’s a government watchdog who will watch them, catch them if they break the law, and take their money, they behave better. Leaving it alone is the best we can hope for.”

While many in the industry decry the big fines the CFPB has levied against lenders and servicers, Denbeaux sees them as the agency’s best tools.

“The biggest negative effect would be a reduction in the effect of the CFPB prosecuting large-scale offenses, Denbeaux said. “It’s the fact that they get those kind of judgements that keeps the servicers in line to protect consumers and the economy.”

Single Director Versus Board Debated

Sen. Elizabeth Warren originally proposed the CFPB in 2007, before she was elected to the Senate, and has championed and defended the organization ever since. She was not available for comment, but a member of her staff said Warren laid her position on the CFPB and its critics in an article posted at the Huffington Post.The very structure of the CFPB, with its single director who cannot be removed without cause by the president, is the subject of several ongoing legal challenges. In her article, Warren says the single director is more nimble and efficient than a larger board and that a single director is more accountable than a larger board would be. She also notes Chris Dodd and Barney Frank supported the single-director model from the beginning. The management structure produces a variety of opinions in the industry, from those who think a single director is fine, with some caveats, to those who would prefer to see a board of directors in place.

“I don’t have a problem with a single director being in charge, but like any other director, the president ought to be able to remove a person when a new president takes office, just like every other agency,” Hogan said. “You have to have an agency that’s accountable to the executive branch. President Trump won the election and ought to able to put his person in there.”

Kriss said he was open to the idea of a board of directors in place of a single director. “It’s going to be very interesting to see what the Trump administration will do,” he said. “A great step would be to sit down to look at this. Do we need more people to make those decisions?”

Current CFPB Director Richard Cordray’s term expires in July 2018. His successor will be chosen by the president.


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