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Impact of CFPB on the Economy and Consumer Credit
The CFPB was created primarily to protect consumers and facilitate access to credit. However, many analysts argue that the CFPB’s regulations of the financial industry actually reduce consumer access to credit, particularly for the low-income and minority Americans the agency is focused on protecting from “predatory” practices.
The U.S. House Committee on Oversight and Government Reform released a report in December 2012 stating that, “The CFPB’s unnecessarily aggressive processes also prevent the Bureau from adequately considering how its enforcement and regulatory actions could restrict access to and increase the cost of credit.”
In June 2013, the CFPB issued a final rule on “Ability to Repay,” which details eight minimum underwriting factors for creditors making ability to repay determinations. The rule is “designed to assure the reliability of mortgages — making sure that lenders offer mortgages that consumers can actually afford to pay back.” The rule has been heavily criticized by the mortgage and financial industries for restricting customer access to credit.
The Independent Community Bankers Association submitted testimony to Congress entitled, “Qualified Mortgage Rule Will Jeopardize Access to Credit.” The Washington Post quoted a senior director at Moody’s Analytics, saying “Credit is going to be restricted, at least a little.”