CFPB oversight hasn't harmed banks' mortgage lending, Fed researchers' study finds

10 October 2018 1:47am
US Consumer Financial Protection Bureau oversight hasn’t hindered banks’ mortgage lending or discouraged them from growing, a report by US Federal Reserve researchers said, undercutting the premise of two congressional bills.

Their analysis also found that banks subject to CFPB examinations and potential enforcement have shied away from making riskier loans, including US Federal Housing Authority-insured mortgages and those to borrowers with higher credit risk.

“Our results provide some support for the view that heightened supervisory scrutiny related to consumer financial protection has led to some 'de-risking’ of bank activities,” the New York Fed researchers' report said Tuesday. “However, claims that CFPB supervision and enforcement activities have induced a collapse in consumer lending do not seem to be correct, at least for mortgage lending."