Lakeland, FL - Twice each year the Consumer Finance Protection Bureau (CFPB) prepares a report on the state of the agency and its work on behalf of consumers.
And twice in the past year, CFPB Director Richard Cordray has faced questions by Congressional oversight committees regarding agency rules that block the path to affordable home ownership for consumers of modest means.
In a previous discussion with Senator Bob Corker, Cordray acknowledged there were areas of concern that the agency would reconsider.
"Numbers of these people are unable to be served, and they're ending up paying more for rental housing than they could for actually purchasing a lower-cost home," Sen. Bob Corker (R-Tenn.) told Cordray when he testified last year before the Senate Banking Committee.
"That doesn't sound optimal from anybody's standpoint," Cordray responded , having admitted “It's a very real problem” that impact manufactured homes, but also impacts other forms of low cost housing too.
But last month, Cordray seemed unmoved by the harm his agency's misguided rule-making continues to inflict on millions of individual buyers and sellers of manufactured homes, or the collateral damage to production, employment, lenders and retailers.
"It's not fair …" Sen. Joe Donnelly told the CFPB director. Ordinary families have a right to have a place to call home, he said.
Cordray bristled. "And, by the way … not be gouged," he replied, despite having acknowledged just moments before that there "was not ever much high-cost lending in the manufactured housing market."
Donnelly held his ground. "In almost every case, I don't think my local community banker is out to gouge anybody."
And so begins a snapshot of the wide-ranging impact of well-intentioned banking reforms gone awry in this latest edition of Inside MH: The Road Show, which features Cordray, Donnelly and:
Mark Carter - a pastor who is also a part-time school bus driver in the Ohio River Valley of Western Kentucky. He is thankful for the financing he obtained, and appreciative of the retailer who helped him get the loan on his home.
Susan Gaines - a manufactured home retailer who has sold Carter two homes over the years, and helped him secure financing for each of them.
Mark was stunned to learn that he'll be on his own the next time around, thanks to new federal regulations that prevent Susan from offering the expert guidance she once offered all of her clients -- many of them first-time home buyers.
It is the same kind of financing assistance that real estate agents can still routinely provide to buyers of site-built homes.
"I feel like part of my job is to educate the public. And they've kind of eliminated the area where I could sit down with the customer and explain debt-to-income ratio … where they have to be in order to buy a home," says Gaines.
The Dodd-Frank rules, implemented in January 2014, have already impacted thousands of consumers who want nothing more than to own an affordable home.
Yet few realize these rules exist, much less that they represent good intentions that have gone terribly awry in the name of consumer protection.
And so begins the latest Inside MH video report of the wide-ranging impact of regulations that Barney Frank once told a constituent in writing that were never meant to apply to manufactured housing.
You'll hear from:
Don Glisson, Jr., an independent manufactured home lender whose firm originates some $400 million a year in MH loans for about 10,000 home buyers a year.
"If (a retailer's) not being compensated for the finance side, which he's not, why should he not help the customer find the best deal?"
Doug Bell, senior VP of a local Kentucky bank whose costs have increased and service for customers has been slowed.
"We've had to add additional compliance, additional training, additional staffing."
The solution the Republican presidential front runner, Donald Trump, and others in his party are calling for is to end most of the Dodd-Frank law that created the CFPB
A growing coalition of Democratic and Republican lawmakers wants to modify Dodd-Frank in focused ways that will end the harm caused by the current state of the CFPB's regulations.
Indeed, the House has acted by passing HR 650 – The Preserving Access to Manufactured Housing Act – in the spring of 2015, and bi-partisan Senate support for S 682 continues. But why should the people harmed by CFPB regulations have to wait?
Perhaps the saddest part of this story is that Cordray, himself, has the power to offer relief to the consumers who are paying the price of this misguided legislation, which blocks their path to home ownership.
The CFPB's director has the legal authority to make the needed changes. There is no need to wait for federal law to be changed by Congress.
Millions are being harmed, as Senator Donnelly points out.
With a growing affordable housing crisis in the U.S., and thousands of good, American jobs being thwarted by these regulations, what possible excuse can Richard Cordray give to defend the harm he and his bureau's regulations are causing Americans?
That is a question he never even attempts to answer in his most recent appearance before a Congressional committee, and one that consumers should be asking federal elected and appointed officials themselves.
What is Cordray waiting for? That is one of many issues raised in this most recent edition of Inside MH – the Road Show - Regulatory Impact - CFPB rules - Manufactured Home Buyers, Sellers & Lenders – Richard Cordray, Sen Joe Donnelly, et al
Image credit: still from Inside MH CFPB Regulatory Impact Video Report.
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L. A. "Tony" Kovach, Publisher