The Consumer Financial Protection Bureau is expected to unveil a flat free compensation proposal Wednesday night after briefing industry officials on the matter earlier in the day.
At deadline details about what, exactly, the agency has in mind were vague. CFPB spokeswoman Jennifer Howard did not return a telephone call about the matter.
Industry officials who were part of a CFPB conference call on the proposal said they were sworn to secrecy by the agency, and that something should be in writing by 10 p.m. Eastern time. (This reporter did not participate in that call.)
But whatever was said to these officials was so vague that it set off alarm bells and worries that the government would be directly involved in setting pricing in a free market business—namely mortgage banking.
“I didn’t know that the CFPB had the ability to set pricing,” quipped one trade group official, requesting anonymity.
Another participant on the call said, “The CFPB lady was talking 90 miles a minute on this thing, and not answering our questions. They talked about a flat fee for every loan (regardless of the size) and a level playing field.”
He added that if such a proposal ever becomes reality it would wipe out small mortgage bankers and brokers. “They were very vague about the whole thing,” he said. “Sounds like some plan to recapitalize the banks.”
Another participant on the call said he, too, came away thinking that some type of flat fee proposal would be floated but cautioned against conjecture.
But sources agreed on one proposal that will emerge: CFPB is telling banks they can self-certify on their mortgage education requirements.