1.McKernan’s Vision for the CFPB: A Shift in Direction

Jonathan McKernan, nominated to lead the CFPB, emphasized the need for regulatory reform and increased accountability at the agency. In his written statement, McKernan criticized the CFPB’s recent actions, arguing that it had become “politicized” and had overstepped its authority by “regulating through enforcement.” He laid out several priorities for his tenure, including:

♦ Refocusing the CFPB on its core mission.

♦ Making the agency more efficient and right-sizing its scope.

♦ Holding bad actors accountable while preventing regulatory overreach.

When asked about consumer complaints and enforcement, McKernan repeatedly stated that the CFPB must follow the law and highlighted an example of perceived overreach involving a mortgage servicer case. His comments suggest a significant shift in how the CFPB will approach enforcement and rulemaking under his leadership.

2.Pulte’s Housing Priorities: Affordability and Stability

William Pulte’s nomination to lead the FHFA signals a focus on housing affordability and ensuring a well-functioning mortgage market. In his prepared remarks, Pulte stated that his “number one mission” would be to strengthen and safeguard the housing finance system while making homeownership more accessible.

During the hearing, Pulte addressed key housing finance issues:

♦ Housing Affordability – Acknowledging that “costs are out of control,” Pulte emphasized the need for affordability initiatives, including manufactured housing.

♦ GSE Reform – He cautiously approached the issue, noting that while Fannie Mae and Freddie Mac should not remain in conservatorship indefinitely, any transition must be carefully managed to avoid increasing mortgage rates.

♦ Credit Risk Transfers (“CRTs”) – Pulte supported CRTs, arguing they help mitigate taxpayer risk.

♦ Regulatory Rollback – While advocating for reducing “useless regulations,” he acknowledged that stakeholders may disagree on which regulations should be eliminated.

♦ Appraisal Bias – When pressed on the issue, he deferred providing a firm stance until after confirmation but cited his experience with appraisal challenges in Detroit.

3.What Comes Next?

With no major missteps during the hearing, both McKernan and Pulte are likely to be confirmed in the coming months. Their leadership will mark a shift in approach at both the CFPB and FHFA, with McKernan focused on regulatory rollbacks and refocusing CFPB enforcement, while Pulte aims to stabilize housing finance and address affordability concerns.

We will continue to monitor policy shifts under their leadership and assess how these changes impact mortgage professionals, lenders, and homebuyers. Stay tuned for further updates as their confirmations move forward.