The Supreme Court ruled last week that the 1 Director Model at the CFPB as currently constructed is un-constitutional. Why? Currently, the CFPB Director is nearly impossible to fire or to let go. Now any President can let the CFPB Director go for any reason like nearly every other leadership position in D.C. This is now true for the Director of FHFA.
For good or bad these 2 Director positions become more "political" as any future President can fire these 2 people if they so choose. But, I would argue that housing and finance are so important that shouldn't a President have control over the direction of these 2 huge all-important agencies?
But, here's the danger too. Kris Kully, a consumer financial services attorney and partner at Mayer Brown said, "The agency could take a completely different approach to everything from finalizing the QM proposal to revising and/or enforcing the loan originator compensation restrictions. A new director could even reach back to address behavior over the past couple of years."
In essence this attorney is saying a new Director could retroactively change the rules and penalize financial firms including mortgage companies for actions taken from 2017-2020 that were legal then and in 2021 say those actions were illegal and fine us. This would be VERY CHILLING and would tighten up mortgage lending further. I expect big banks like Chase and others would abandon FHA lending completely.