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CFED, Others Decry Possible Fate of the CFPB: What Will Trump Do?

December 8th, 2016 Comments off
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President Barack Obama announces the nomination of Richard Cordray as the first director of the CFPB on July 18, 2011. Credit: Wikipedia.

Since the Dodd-Frank Wall Street Reform Act was enacted six years ago, members of Congress have attacked the law, including the Consumer Financial Protection Bureau (CFPB), tirelessly” states a letter from CFED sent this morning (see attachment download, near the end of this post, below). “…the next Congress and Administration are likely to work closely together to attack Dodd-Frank and the CFPB. There is a real danger that moderate Democrats will even join Republicans to undermine these protections.”

As the days count down to President-elect Donald Trump’s inauguration, the saga of the Consumer Finance Protection Bureau (CFPB) continues to play out.

What the CFED letter fails to mention is to their supporters is that the CFPB provided funding to CFED.

Even when it was documented that the CFPB regulations were harmful to manufactured home owners and buyers, CFED continued to support the CFPB, and attacked all who would modify their regulations.

Even when video of Richard Cordray, the CFPB director himself saying there was very little predatory lending in manufactured housing, CFED and their allies continued to attack any who suggest any change at all to the regulations.

Now, The Great Battle over the CFPB is Looming

American Banker columnist John Heltman writes “The political independence of the Consumer Financial Protection Bureau may end not with a bang — after a protracted battle in Congress — but with a whimper, the victim of a bureaucratic rule that prevents the agency from appealing a pending court case to the Supreme Court.

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John Heltman. Credit: Twitter.

A recent ruling by the D.C. Circuit in the PHH case in October, which the Daily Business News covered here, determined that the single-director structure of the CFPB was incompatible with its status as an independent federal agency, and that director Richard Cordray would have to serve at the pleasure of the president to avoid violating the Constitution’s separation of powers.

This is unprecedented, and there are a lot of people who are confused and I think a lot of speculation about what’s going to happen,” said Thaya Brook Knight, associate director of financial regulation studies at the Cato Institute.

While the CFPB is appealing the decision, their ability to get the ruling overturned may actually hinge on whether or not the Justice Department will allow the case to move forward.

With Donald Trump taking office, and Senator Jeff Sessions being nominated for Attorney General, that could be tricky for fans of the CFPB.

But, there’s more.

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President-elect Donald Trump and Senator Jeff Sessions. Credit: Alabama Today.

A big challenge for the agency is Title X of the Dodd-Frank Act, which established the CFPB. The title gives the agency explicit authority to pursue its own litigation up to and including the Circuit Court level, but when it comes to the Supreme Court, the law says the CFPB must first file a written request to the U.S. Attorney General within a specified timeframe and that the “Attorney General concurs with such request or fails to take action within 60 days of the request.

In essence, Donald Trump and Jeff Sessions could “run out the clock” by taking no action, effectively blocking the CFPB’s appeal to the Supreme Court.

Heltman writes that this scenario leaves CFPB with relatively few options to prevail in their case with PHH.

The agency has requested an en banc (full court) rehearing of the matter before all sitting justices on the D.C Circuit. If either that request for rehearing is denied or is granted or the panel upholds the earlier ruling, the Justice Department could prevent the CFPB from appealing the case further.

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Richard Cordray. Credit: Wikicommons.

Even though President-elect Trump has not taken office, one former Treasury official believes that he would stop the CFPB in its tracks.

I assume that one of the first orders of business of a Trump Justice Department will be to end that appeal and effectively confess judgment, say ‘Yes, it was unconstitutional,’ and then fire [CFPB Director Richard] Cordray,” the former Treasury official said.

I’ve never seen a case where the eagle was on both sides of the case. That would actually sort of be proof that the ruling was right, wouldn’t it?

Another possible scenario is that President-elect Trump could remove Cordray from his role.

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Mark Calabria. Credit: Cato Institute.

According to AMI Newswire, Mark Calabria, the director of financial regulation studies at the Cato Institute in Washington, D.C., sees a strong case for Trump removing Cordray right after he assumes the presidency, based on the language in the Dodd-Frank Act and the director’s administrative record.

The first thing that can be done is replacing the director,” said Calabria.

Eventually a commission might take over, but it’s highly unlikely that would happen next year. Expect Congress to eventually limit the agency’s powers to take action against financial institutions for ‘abusive’ practices.

As noted above, the bureau also has its supporters and detractors.

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Dennis Kelleher. Credit: Better Markets.

In just a few years since it was created, it has returned more than $11 billion to more than 27 million Americans ripped off by financial firms,” said Dennis Kelleher, President of Better Markets a Wall Street watchdog. “After more than a decade of being victimized by financial predators, that is great news for America’s financial consumers.

The bureau is immune from traditional congressional oversight and is at odds with America’s democratic principles,” said Senator James Lankford (R-Okla.) last week in a report detailing wasteful spending by the federal government.

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Senator James Lankford. Credit: Twitter.

Almost everything the CFPB does is redundant to another federal agency. It should never have been created. The best use of funds would be to abolish the CFPB and spend the available dollars to reform and appropriately staff the other regulatory entities.

The manufactured housing industry’s professionals have strong feelings about the agency and its impact. The Daily Business News will continue to monitor the moves to reform or entirely repeal Dodd-Frank and the CFPB, and those who strive to defend it.  ##

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To see their letter, click the link below or the image above. CFED’s logo is their property, and is used here under fair use guidelines.

(CFED letter to supporters on the CFPB referenced above is available as a download, linked here.)

(Image credits are as shown above.)

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RC Williams, for Daily Business News, MHProNews.

Submitted by RC Williams to the Daily Business News for MHProNews.

Sun Rises Once Again on Sunset Village

July 15th, 2013 Comments off

Updating a story MHProNews last published May 27, 2013 regarding the plagued Sunset Village manufactured housing community in Glenview, Ill., new owners have purchased the property out of a three-year foreclosure. Former owner Richard Klarchek was sued by Cook County and the state for failing to adequately address water quality and other maintenance problems, dropping the community into foreclosure. He then filed personal bankruptcy, which further complicated Sunset’s fate. Occupancy fell from around 300 homes to 150, according to chicagotribune. David Worth, principal of Ravinia Communities LLC (formerly October Investment Properties), is one of the new owners along with JDI Realty LLC and The Wolcott Group LLC. Ravinia owns about 2,500 manufactured home sites in seven states, including Illinois, California, Florida and Michigan, Worth said. “We’re coming into this with eyes wide open,” Worth said. “Our sole focus is improving the community and bringing it back to what it was a few years ago, when it was probably the most affordable option on the North Shore.”

(Photo credit: glvenviewpatch–Sunset Village)

First Nation People need more Modular Homes

April 29th, 2013 Comments off

Following up on the multiple housing woes of the northern Ontario (Canada) Cree Community of Attawapiskat with sewage backup problems off and on since 2009, forcing residents to evacuate their homes, as MHProNews last reported Feb. 5, 2013, now the homes and the community hospital have suffered the same fate from the effects of melting snow. Last year, according to cbc.ca/news, the Canadian government sent 22 modular homes to the James Bay Coast community after substandard living conditions were revealed. The manager says 62 more modular homes are needed; the band was asked to write a new housing proposal for the government.

(Photo credit: cbc.ca/news)

Modular Homes to Serve Disabled

October 23rd, 2012 Comments off

TheDailyStar tells MHProNews a modular project is under way in Sidney, New York, northeast of Binghamton, to provide housing for persons with developmental disabilities. Bought last year by the state Dormitory Authority for the Broome Developmental Disabilities Service Office, one of the six lots already has a modular home outfitted for special needs people, and another home is being completed. The agency provides a variety of services to individuals and their families in a six-county area. The fate of the other four lots has yet to be determined.

(Photo credit: Med Cottage/N2Care)

Funds Reinstated, Build will Continue

October 16th, 2012 Comments off

We covered a story Oct. 4, 2012 concerning the federal court-ordered closing of Duroville MHC in Mecca, Calif. due to poor housing conditions, and the fate of those living there. MyDesert reports 41 of the manufactured homes of the 180 homesite Mountain View Estates in nearby Oasis, Calif. had been delivered, funded with state redevelopment funds to relocate the residents. A recent law that eviscerated the redevelopment districts cut the funding, ending the build in March. The state just approved $10 million to complete the project. The 41 units will be move-in ready by the end of Nov., 2012, and work will begin on the 139 remaining the beginning of this Nov. The 190 factory-made homes still at Duroville, also known as Desert Mobile Home Park, house 1,200 to 1,500 mostly Native American and Latino farm workers. As MHProNews learned, a storm which deluged the community with almost six inches of rain Sept. 11, 2012 destroyed and/or damaged most of the homes, many of which were not in good shape to begin with, leading to the ordered closure.

(Photo credit: top–Denise Goolsby/TheDesertSun–Duroville

bottom–Omar Ornelas/TheDesertSun–Mountain View Estates)

Foreclosures on the Move

July 16th, 2012 Comments off

According to the Chicago Tribune, RealtyTrac reports of the homes sold in the first quarter of 2012 nationwide, 26 percent were foreclosed properties, an eight percent increase over 2011. While last year short sales accounted for nine percent of homes sold, this year that has increased to 12 percent in the first quarter. The second quarter of this year saw foreclosure filings drop from 608,000 Q2 2011 to 558,000 this past second quarter. Since 2008 some 3.6 million homes have entered the foreclosure process, and as MHProNews.com has learned, at least that many more may be slated for a similar fate.

(Photo credit: MerchantCircle)