Despite the hand-wringing and nail-biting, the Consumer Financial Protection Bureau made it through 2011 without any major confrontation with the banking industry.
To be sure, lawmakers complained about the agency's involvement in the global mortgage servicer settlement earlier in the year. But for the most part, the CFPB focused on public initiatives with widespread support, issued a series of requests for information from the industry and consumers and launched a supervision program that hews closely to the examination guidelines used by prudential regulators.
In turn, the feedback from the banking industry has been largely positive. Just don't expect it to last.
"I think they've done everything this year by the book," Jeffrey Taft, a partner with Mayer Brown LP, said of the agency. "They've been very cautious — calling things notices rather than proposed rules, requests for comments rather than proposed rulemakings — and done a very good job of adhering to the letter of Dodd-Frank and the authority they currently have."
But Taft said 2012 will likely be different.
"I think next year may be a year where they start to push the envelope a little bit," he said.
The CFPB's agenda alone is enough to invite more controversy.
Early in the year, it is expected to finalize a Federal Reserve Board proposal requiring lenders to verify a borrower's ability to repay a mortgage — one of the more contentious provisions of the Dodd-Frank Act.
The agency is also working with other federal regulators to develop national mortgage servicing standards amid continued criticism of servicers' foreclosure practices.
"In terms of tangible kind of policy results, clearly mortgages" will be a priority for the CFPB in 2012, Raj Date, the bureau's de facto director, said in an interview this month with American Banker, NMN's sister publication. "Because the statute and any sense of reality would dictate that there have to be reforms in the mortgage marketplace, and Dodd-Frank mandates that we execute against some subset of that."
Observers also have been waiting for the bureau to release more guidance on how it gathers and shares information, a particularly sensitive topic for supervised institutions that have long been able to share data with regulators with assurances that it was privileged and protected information. Under Dodd-Frank, institutions are not assured those same protections when they share information with the CFPB.
Industry observers also expect to see more action from the bureau's enforcement unit as its supervision team digs deeper into large-bank consumer practices.
"There is certainly concern in terms of how much can the agency do given that it doesn't have a confirmed director," said Kevin Petrasic, a partner with Paul Hastings LLP in Washington. "However, there are things that the agencies can do, working with states and other federal banking agencies. I would expect the agency would start to become more active or aggressive in terms of using the options that it does have to work with other agencies."
Although President Obama has nominated Richard Cordray as director of the CFPB, the nomination is not expected to clear the Senate anytime soon. Senate Republicans have vowed to block any nominee unless changes are made to the agency's structure.
Until the Senate confirms a director, however, the agency's powers are limited. For example, it cannot regulate nonbanks, but must focus its attention solely on banks.
