RSSAs the congressionally confirmed director of the Consumer Financial Protection Bureau, Richard Cordray no longer needs to win the approval of lawmakers in Congress. Yet, bankers who have worked with him for the last year on the agency’s Community Bank Advisory Council (CBAC) do not feel the change in scrutiny will bring a change in Cordray.
Cordray has proven he will listen to community banker concerns, according to Jo Ann Merfeld, compliance and loan administration officer for Iowa-based First Citizens National Bank, Mason City.
At one CBAC meeting, Merfeld raised a concern about a new CFPB requirement for periodic statements on mortgage loans. In order for her bank to comply with the regulation, it would need to make costly upgrades in technology. “We let the CFPB staff know the procedures that would be involved in implementing a regulation of that magnitude,” Merfeld said. “When Cordray heard this, he came back later that day and told us he wanted to gain a better understanding of the actual procedures and how it worked.”
In the end, the CFPB wrote the final rule so that community banks would not fall under the periodic statement requirement. “That was a significant change; initially they had no exception for community banks. That was an excellent example of the effect the CBAC has had on regulations that have come out of the CFPB,” Merfeld said.
Merfeld expects the CFPB and Cordray will continue to lend an ear to community bankers. “My impression is that he is a thoughtful person. He has been willing to listen and has showed genuine concern,” she said. “We have had to educate Cordray and his staff, but they are beginning to see that our customers are in the community. We do not have call centers or automated services. When a customer needs servicing on their mortgage, they know an individual bank employee’s name and phone number.”
At first Don Giles, president of Armed Forces Bank, Fort Leavenworth, Kan., thought the CBAC was just a CFPB public relations effort. But he has seen CBAC play an important role, especially while the bureau was writing its mortgage rules. “When bankers raise an issue with a proposed regulation, Cordray would ask for examples. He’d look at it from a high level but he also delved into detail. In some cases, he actually changed or delayed rules because of the info he gained from the council,” Giles said.
For both CBAC meetings in October 2012 and March 2013, Giles said Cordray stayed for the entirety of the day-long session. “It has been a pleasant surprise,” he said. “So much had been written about the bureau, I didn’t know what to expect when I was selected to be on the panel. Now we have actually been able to affect the course of regulation coming out of the CFPB.”
