I am often asked whether the upcoming presidential election will impact the current trends in compliance. While I do believe the election will have a significant impact, I do not believe it's a situation where we will see compliance substantially decrease.
Rather, I believe it could make a difference in terms of whether there will be more of the same or a significant ramp-up in the frequency of audits and enforcement actions.
As many know, the political environment is not especially ripe for politicians to side with lenders. While many legislators recognize the importance of lending to the general economy, few are willing to place themselves at odds with policies ostensibly intended to protect consumers. Moreover given the broad power of the CFPB and its structure, it would be very difficult to reverse course at this point.
However, if one examines the CFPB's actions to date, it is apparent that the CFPB has confined itself to a less controversial regulatory agenda that is politically safe. It is very possible that an election providing political control to those supporting the CFPB would result in an emboldened agency willing and able to take more aggressive-and perhaps controversial-positions. Given the leadership profile of the CFPB, it is likely such agendas would be more burdensome on the industry.
Overall, it is my impression that no matter who wins in November the click will not be turned back. The question is whether it will be fast-forwarded.