Q&A, MBA Chief Stevens, Moving to SunTrust, Braces for ‘Over-Regulation’

By Kate Berry

JUN 5, 2012 1:40pm ET

As head of the Mortgage Bankers Association, David H. Stevens spent the last year warning that excessive and ill-considered regulation could drag down the mortgage market.

As the new head of SunTrust Mortgage, he’ll have to face that regulation head-on.

Stevens, the former commissioner of the Federal Housing Administration, last week said that he would leave the MBA after little more than a year. He will take over SunTrust’s (STI) mortgage operations in mid-July, taking on a business that is still struggling with credit quality and repurchase requests – and trying to comply with new government requirements.

The mortgage industry is in “a state of over-regulation, which could ultimately result in the blockage of credit altogether,” Stevens told American Banker in an interview last week.

Though he said it would be “premature” to talk about his plans at the $172.3 billion-asset SunTrust, Stevens said he chose the Atlanta bank primarily because regional banks have made it through the financial crisis with far less damage to their reputations than the biggest banks have suffered.

“Every bank in America has to deal with mortgage issues,” Stevens said. “You can look at the in-foreclosure inventory across the country and there’s still a lot of work there.”

SunTrust has made noticeable improvements in credit quality and noninterest expenses in the last year. But like most banks, it is still struggling to contain mortgage repurchase costs, reduce non-performing loans and increase the volume of home purchase loans.

“From a growth standpoint, the key was to look for a bank platform that was committed to mortgages, and I do like the regional bank profile,” Stevens said, adding that SunTrust has “been able to take a look at both the legacy issues, which every bank is dealing with, and separate that from how they do the business on a go-forward basis.”

Stevens arrived at the MBA last May, after spending two years as commissioner of the FHA, where he increased enforcement actions against mortgage lenders. His decision to jump to the mortgage industry’s trade group last year raised some eyebrows, and a series in American Banker examined emails suggesting Stevens and his deputies had maintained cozy ties with the industry while at the FHA.

“I went to the MBA because I thought there was a lack of cohesive voice for mortgage management in Washington,” Stevens said last week. “I wanted to create a common voice on critical issues. I wanted to make sure we thought about our reputation. And I wanted to have the MBA return to its role of actually caring about responsible home ownership while creating a common voice for the industry.”

He added that he is leaving the MBA much sooner than he had planned to, “but this unique opportunity to return to the private sector would not wait. I leave a stronger MBA and will continue to be an active member and advocate” in the industry, as “an employer running a large substantial mortgage platform.”

In a wide-ranging interview with American Banker last week, Stevens weighed in on a wide array of issues facing the mortgage industry, including the “qualified mortgage” rule, the government’s role in the housing market and the future of the FHA.

What’s the biggest issue that the industry is dealing with right now?

DAVID STEVENS: We have to create protections for consumers going forward and make sure that we have rules the industry can operate under and be willing to lend in – that’s the dynamic tension and risk.

What is your view of the Consumer Financial Protection Bureau pushing back the release date last week of its “qualified mortgage” rule until the end of the year?

It’s a good idea as long as the rule was delayed for the right reasons. The wrong reason would be delaying it because of the timing of the [presidential] election. That would be a reason for concern and an indication of how impactful the final rule can be and how divisive it can be. It’s a really important rule and the greatest victim of the QM rule is the exact consumer we’re trying to protect, the first-time homebuyer without large wealth or one who may have lost their job.

The good news is that the debate has brought out a profound recognition of the downstream impact that this rule could create. The extended time will give [CFPB head] Richard Cordray and his team more time to look at the data and how it could impact responsible well-qualified borrowers.

If you look at the qualified mortgage rule, regardless of the “ability to pay” issue, all types of products from option arms to balloon payments to no doc/stated income loans are entirely eliminated forever. By eliminating these product features we have basically solved 95% of the problems that created the housing bubble. The experimentation of untested credit models and the layering of risk caused the problems in the first place. But the eagerness to stop any risk may have gone too far and may result in the U.S. having the tightest housing finance rules in the world. It’s the ‘ability to pay’ definition and the safe harbor debate that will impact who gets to buy a home and who doesn’t.

You’ve held various roles in private industry and government. Who is to blame for the current dysfunction of the housing market?

There are more entities involved in the mortgage space now than [ever before] in history. I’ve never seen a world where so many regulators, so many state legislators and legal entities, from state attorneys general to the Department of Justice, are all involved in mortgage finance, and that’s creating excessive levels of uncertainty in the market. There’s a role for Washington to play in clearly defining who’s on point for select issues on a national scale, because without that we’re going to have a continuous morass of players that can cause greater confusion.

Unfortunately the person who ultimately pays the price is the consumer, because all the costs of uncertainty get passed to the consumer through higher-cost loans or tighter credit, because lenders become afraid to lend. There are whole companies that have left the market, like MetLife (MET), or that have scaled back, like Bank of America (BAC), which creates less competition.

Where are we now in terms of resolving the legacy mortgage issues?

We’ve gone through stages. When I first joined the administration we were in the position of stopping the bleeding, because home prices were free-falling and it was about creating programs to prevent foreclosure. The Dodd-Frank Act hadn’t been passed yet. Now it’s transitioned to trying to find a pathway for certainty in the market. What concerns me is that now we’re at a point where it’s a state of over-regulation, which could ultimately result in the blockage of credit altogether. So it’s about getting the dynamic tension right between consumer protection and lending.

By the way, [regulators and policy-makers] are all well-intentioned, but it’s just creating confusion. Too many are wearing the hat of trying to come up with a solution for the future of housing finance.

What should the role of government be in the mortgage market?

I’ve always believed there’s a role for a government guarantee, because for people to invest and to bring capital into the U.S they need the government guarantee. Private capital is opportunistic. I believe that the role of government is too big in the mortgage finance system, so creating certainty as the economy recovers is extremely important to ensure that private capital will want to come back in. I still don’t see a clear path for that. We saw today [June 1] that the unemployment rate increased and the market overreacted. The euro is still clearly in crisis. Until we see some broader stability in the U.S. economy, we’re going to have this volatility. We’re in a huge eco-system of the world economy, and until there is a broader theme of stability, we will have a continued need for this large role of the government in the housing finance system.

But we’ve been here before. I started in the early 1980′s, when interest rates were 16% and lenders weren’t lending and FHA was a huge part of the market. It made up 50% of the market in Texas, Oklahoma and Colorado. People said at that time the economy would never recover and it did. This one will recover as well, it’s just going to take a while. This is a much deeper broader and national recession.

You played a role in the settlement early this year between the five largest banks and federal and state regulators. Were you happy with the outcome?

Happy isn’t the right word. I was working on the settlement in the very beginning. It was a very complex negotiation that involved five very sophisticated financial institutions and knowledgeable legal entities in Department of Justice and state attorneys general. It was a large group of highly-skilled people. This has been a terrible housing recession that everybody from the banks to policy makers would go back in time and wish they could change. The real challenge is getting through this to make sure this never happens again but also doesn’t overly constrain home ownership.

What about the dire predictions that the FHA will need a bailout of $50 billion from taxpayers?

The screams from the highest rafters that FHA was going to cost the taxpayers $50 billion have not come about. They haven’t cost taxpayers a penny and FHA is still operating under its own self-sustaining capital. Unlike Fannie Mae, Freddie Mac, or the banks, FHA has had no TARP funds and is fully self-sustaining on its own capital reserves and that’s going through the worst recession. It’s pretty difficult to accuse them of doing something wrong when there were so many failures. Will they make it through the rest of the recession on its own capital? The odds are better than even that they will. Lehman failed, Countrywide failed, Washington Mutual failed and Wachovia failed – and they all had TARP funds.

I didn’t respect FHA as much working there as I do today. Collecting a mortgage insurance premium on every loan is much different from the government-sponsored enterprises getting a guarantee fee. It gives FHA a greater cushion from default risk. My hope is that the current administration and future heads of FHA don’t pull back the credit characteristics and policies we put in place to tighten the portfolio. They need that revenue in to protect the taxpayer.

I also think the loan limits are too high and when they raised them for FHA and not the GSEs it created a disparity that is really not healthy for the long-term. Of course, they do very few loans above $700,000 but there should be considerations around whether there should be a larger down payment for higher loan amounts.

Fees get a high court reprieve

By KENNETH R. HARNEY Jun 1, 2012

In a decision that could have significant impacts on the fees that consumers pay in real estate transactions, the U.S. Supreme Court has ruled that “unearned” fees charged by lenders and other service providers do not violate federal law as long as they are not split with anyone else.

The court’s unanimous decision effectively reopens the door to controversial “administrative” fees levied by real estate brokers, and could encourage the practice of “marking up” of fees by mortgage lenders, settlement agents and others that had been banned by federal regulators for the past decade.

The ruling also represents a stinging defeat for the Obama administration’s Departments of Justice and Housing and Urban Development (HUD) – both of which had argued that charging unearned fees is illegal – and may be a shot across the bow of the new Consumer Financial Protection Bureau, which inherited the task of policing mortgage and settlement abuses from HUD.

The decision, handed down May 24, involved customers of Quicken Loans, the online mortgage company, who alleged that Quicken charged them “discount” fees but did not provide them lower interest rates on their mortgages, as is customary. Each loan discount fee, or “point,” is equal to 1 percent of the mortgage amount. The failure to provide a lower rate, the plaintiffs claimed, meant that Quicken pocketed their fees without providing anything commensurate in return, which is a violation of the federal Real Estate Settlement Procedures Act (RESPA).

Quicken denied the borrowers’ allegations and argued that in any event, the settlement procedures law, first enacted in 1974 to control widespread kickbacks paid by title insurance companies to realty agents and others, does not apply to situations where there is no split of the fees involved. Quicken’s borrowers maintained that the law does apply and cited a policy statement issued by HUD prohibiting imposition of fees where no actual work or service is provided to justify them.

Disputes over real estate and lending fees have led to a lengthy series of court battles in recent years, with some federal district and appellate courts siding with industry interpretations of the law and others siding with federal regulators and consumers. The Supreme Court accepted the Quicken case in part to resolve the differences among the judicial circuits so there would be a uniform legal standard on fees nationwide. The court’s ruling does not, however, affect state laws that prohibit certain fees or practices, including unearned settlement or mortgage charges.

Though the Quicken case centered on a lender’s fees, realty brokerage charges have also come under attack using HUD’s regulatory interpretation of the law. In a major federal case decided in Birmingham, Ala, in 2009, a court ruled that a realty firm’s add-on fees violated the law. In that case, a $149 extra fee was imposed by RealtySouth, a subsidiary of HomeServices of America, one of the largest brokerages in the country. Fees charged by other realty firms have been much higher – $250 or more in some cases.

Critics within the industry, such as Frank Llosa, a lawyer and broker in Northern Virginia, called such fees “bogus,” and “designed to confuse the customer and ultimately charge them more.” Defenders such as Laurie Janik, general counsel of the National Association of Realtors, said brokers “ought to be able to charge what they need to make a profit” in an environment of rising expenses and higher commission payouts to top agents.

After the RealtySouth ruling, Janik urged brokers to disclose the extra fees as integral parts of their compensation schedules – a percentage commission of, say 6 percent, plus a set fee, say $500. Janik also argued that federal law does not prohibit fees that are not split with other parties, and that RESPA was never intended to be a price-control statute – two views that were at the core of the Supreme Court’s decision in the Quicken case.

Where does this leave the issue? Will lenders, settlement agents and realty companies start tacking on extra fees for themselves, emboldened by the high court’s decision? Possibly. But legal experts warn that there could be pitfalls ahead for firms who tack on outrageous charges when no services are rendered. Laurence Platt, a banking attorney with the Washington, D.C., office of K&L Gates, LLP, cautions that the Consumer Financial Protection Bureau “has its own independent ability to declare practices unfair, deceptive or abusive,” and could still come after companies that, in the bureau’s view, are gouging the public.

CFPB Delays Long-Awaited QM Rule Until ‘End of 2012′

By Kate Davidson MAY 31, 2012 5:08pm ET

WASHINGTON – The Consumer Financial Protection Bureau said Thursday it was seeking additional comments on a long-awaited rule defining a “qualified mortgage,” pushing back the expected release date by six months.

Agency officials have repeatedly said the final rule, which would require mortgage lenders to verify a borrower’s ability to repay, would be issued by the end of June. On Thursday, however, the agency issued a request for comment on new loan data it has obtained from the Federal Housing Finance Agency, and said it now expects to issue a final rule “before the end of 2012.”

Although the delay had been rumored for the past couple weeks, observers were still surprised that a final version may take several more months to complete. Some said it’s another sign of the difficulty regulators are having interpreting and implementing the language in the Dodd-Frank Act.

“You can’t overstate how important this rule is,” said Don Lampe, a partner with the Dykema law firm. “This rule represents housing policy in the United States, because how available credit will be will have a big impact on the housing recovery. And that’s another reason why CFPB is having to be very careful here and wants to look at more available data.”

The bureau inherited the rule from the Federal Reserve Board, which issued an initial proposal in May 2011. Comments for that proposal were due last July, and CFPB has been working since then to craft a final version.

But it recently received new data tracking the performance of loans purchased or guaranteed by Fannie Mae and Freddie Mac from 1997 to 2011, as well as other data on securitized mortgage loans.

The notice issued Thursday seeks comment on the new data, which the bureau said can be used for a variety of analyses, including modeling the relationship between a borrower’s ability to repay, and variables such as consumers’ ratio of debt to income. The comment period closes on July 9.

“Through our ability-to-repay rule, we want to ensure that consumers are not set up to fail with mortgages they cannot afford and we want to protect access to affordable credit,” CFPB Director Richard Corday said in a press release. “We are committed to gathering solid data to inform this important rule. This notice gives the public an opportunity to comment on the information we have received so far, as well as an opportunity to submit additional data.”

The delay will almost certainly mean a longer wait for its sister regulation, the so-called risk retention rule, which includes a class of high quality loans known as “qualified residential mortgages.” Lenders would have to hold a 5% stake in any loans that are not considered QRMs.

Because QRM is supposed to be more broadly defined than QM, observers expect that regulators will continue to wait for the CFPB to finish its rule before they move ahead.

Still, many industry observers said a delay is preferable to the CFPB moving ahead without understanding the implications of its rule.

“All told, it’s better to get it right even if that requires some delay to look at new information or analyze data in a new way, than to issue something and then realize that maybe the entire picture was not viewed before the rule was issued,” said Kevin Petrasic, a partner with the law firm Paul, Hastings, Janofsky & Walker.

Observers said the move – as well as Cordray’s own comments – reaffirms the bureau’s stated intent to be an agency driven by data.

“I think this is really a wake-up call for the industry in terms of understanding the extent and resources that the CFPB has and will apply to data analysis and collection that will produce policy responses that could have fairly significant repercussions for segments of the financial services sector,” Petrasic said.

CFPB is also asking the public for similar information on other types of loans not covered in the FHFA data set, including loans insured by the Federal Housing Administration, the Department of Veterans Affairs, the Department of Agriculture and the Rural Housing Service, or loans held in portfolio or securitized outside of the government sponsored enterprises or federal agencies.

The agency is also seeking data on the litigation costs and liability risks that could result from borrower lawsuits if a lender violates the rule.

Industry groups have called for a legal safe harbor to protect lenders that make qualified mortgages, while consumer groups have argued that the litigation risk is minimal, and said a rebuttable presumption provision would give borrowers more leeway to pursue lawsuits.

In a comment letter to the Fed last year, Mortgage Bankers Association President David Stevens said violating the rule could cost lenders as much as $70,000 to $110,000 per loan in possible damages and attorneys’ fees.

The agency was careful to say that the notice is focused narrowly on the new data and the litigation costs, and does not reopen comments on other aspects of the proposed rule.

Isaac Boltansky, an analyst with Compass Point Research and Trading, said the notice seems to indicate that the bureau is leaning toward the more borrower-friendly rebuttable presumption, rather than a safe harbor.

“I think part of this is what’s now becoming the normal CFPB M.O., which is compile as much data as possible, cover all of the bases publicly,” Boltansky said. “But I think with asking all these questions about litigation costs, to me it really says that they are gearing up for a release that will involve the rebuttable presumption alternative.”

MBA’s Stevens Departs to Head SunTrust Mortgage

By Donna Borak and Jeff Horwitz

MAY 30, 2012 11:38am ET

WASHINGTON – David Stevens, the president and chief executive officer of the Mortgage Bankers Association, will leave the trade group at the end of the month to become president of SunTrust Mortgage.

Stevens, 55, was at the helm of the MBA for a just a little over a year after leaving his position as assistant secretary for housing and commissioner of the Federal Housing Administration at the U.S. Department of Housing and Urban Development.

“Although we are sorry to see him leave so soon, he leaves us well-positioned for the future,” said Michael Young, MBA’s chairman, in a press release. “Dave delivered on his pledge to enhance MBA’s position as the industry’s leading voice.”

Marcia Davies, Stevens chief of staff at the MBA and his former deputy at HUD for industry relations, will serve as interim head of the association. A search for a permanent replacement is already underway.

Stevens arrived at the MBA last May at a point when the organization was struggling to fill a credibility gap. As a former booster for many of the excesses of the housing boom, the organization’s public policy positions faced great skepticism. In perhaps the most notorious incident, the MBA entered into a short sale and renegotiated its debt on its Washington D.C. headquarters even as Stevens’ predecessor, John Courson, argued that borrowers had a moral responsibility to pay their debts.

The MBA shifted course by bringing in Stevens, then an Obama administration appointee who had spent two years working to prevent the Federal Housing Administration’s reserves from being overwhelmed by losses.

When a series in American Banker examined emails suggesting Stevens and his deputies had maintained cozy ties with the industry while at HUD, Stevens said it his was job to mediate between mortgage lenders and Washington, describing his work at the MBA as an extension of his public service.

“Everybody was surprised that I didn’t go back to the industry,” he said then. “This was a chance to help. I thought there needed to be a voice of reason with integrity and responsibility on the mortgage bankers’ side.”

During his year-long tenure, Stevens repositioned the MBA to focus on shaping a slew of new consumer protection rules and regulations intended to reduce risky lending. He framed many of the MBA’s concerns as housing access issues.

“[P]resent proposals go too far,” he announced of risk retention rules in a speech this January. “We cannot allow disparities in homeownership. We must eliminate hardwired down payment and debt-to-income requirements.”

At SunTrust, Stevens will assume responsibility for the day-to-day operations of the business, including sales, production, fulfillment, and mortgage capital markets beginning July 16. He will report to Jerome Lienhard, CEO of the bank’s home lending unit.

He will be based in Washington, D.C. and keep offices in both Washington and Richmond, Va., where SunTrust Mortgage has a large corporate presence.

Small Biz ‘Fairness’ Law Revolutionizing Consumer Regulatory Landscape

By Kate Davidson

MAY 25, 2012 12:38pm ET

WASHINGTON – A statute long relegated to the environmental regulatory landscape is transforming the way consumer financial regulations are implemented.

For years, the Small Business Regulatory Enforcement Fairness Act had applied only to the Environmental Protection Agency and, more recently, to the Occupational Safety and Health Administration, or OSHA.

The Dodd-Frank Act extended the law to the Consumer Financial Protection Bureau, requiring for the first time that a financial regulator meet with small institutions before proposing any rule that would significantly impact them.

“It’s a revolutionary way, certainly in this space, for regulations to be developed,” said Richard Eckman, a consumer financial lawyer with the law firm Pepper Hamilton. “The main attraction and the reason SBREFA is special is it gives the small business a unique opportunity to interact with an agency at an early stage of its thinking and help shape the rule.”

“So by the time it’s proposed, it already has embedded in it the best input the agency can get in how to tailor the rule to minimize the impact on small business.”

Still, the process remains a bit of a mystery to many in the financial industry who are waiting to see the extent to which SBREFA influences the fledgling agency’s rules. Some industry observers have raised concerns that CFPB is rushing the process to meet deadlines, while consumer advocates say the bureau’s critics are trying to drag out the implementation of important rules.

“It’s fairly clear that the financial interests behind these complaints don’t support CFPB’s efforts to put strong consumer protection rules on the books,” said Travis Plunkett, legislative director for the Consumer Federation of America. “So in a situation like that, the goal is delay, delay, delay.”

Under the SBREFA statute, CFPB must convene a panel with representatives from the Small Business Administration’s chief counsel for advocacy and the Office of Management and Budget’s Office of Information and Regulatory Affairs when it believes a rule will have a significant impact on small businesses.

The three agencies select about 15 to 20 small businesses – mostly banks and financial services providers – representing the industries that might be impacted. The bureau provides an outline of the proposal it is considering, and a list of questions it is specifically interested in addressing with the participants.

The group is invited to meet with the panel in Washington, and each is allowed to bring a lawyer or advocate from a trade association, although that person is not allowed to speak during the meeting.

The agency has held three such meetings – lasting about eight hours each – with three different groups of small businesses: one on a proposal to merge the disclosures under the Truth in Lending Act and Real Estate Settlement Procedures Act, one on mortgage servicing rules, and one on mortgage loan originator compensation.

So far, the feedback has been largely positive.

“I think overall it went very well,” said Randy McElwee of the $183 million-asset Security Savings Bank in Monmonth, Ill. “I was impressed with the high level of attendees from the CFPB, all the way up to [CFPB Director] Richard Cordray being there in the morning.”

“I felt that there was a good effort on their part to show that they truly were interested in listening and learning to allow them to make better decisions about where they go from here.”

The meetings are conducted largely in question-and-answer format, with questions hewing closely to the topics outlined in the advance materials.

After each meeting, the panel – including representatives from CFPB, SBA and OMB – has 60 days to prepare a report outlining the feedback it received. During that time, participants also have seven to 10 days to submit additional written comments.

The report, which is published as part of the formal proposed rule, will also explain the panel’s findings and recommendations for tailoring the rule to minimize the impact on small businesses.

Both sides are anxious to see the extent to which the agency incorporates the small business feedback into its final proposal.

“People can judge by the reports, and I think what they will find is that the reports reflect a great degree of diligence on the panel’s part . to get as much feedback as we reasonably can,” Dan Sokolov, CFPB’s deputy associate director for research, markets and regulation, said in an interview last week. “And people can also judge – and I think they will judge favorably, but we’ll see – that we are responsive to those reports and the recommendations in them, and the feedback that they contain.”

Sokolov said the bureau can’t promise to include every recommendation from the panel, but “you will see us often following those recommendations.”

In some ways, the process is remarkably open, said Richard Riese, a senior vice president at the American Bankers Association and head of the ABA’s Center for Regulatory Compliance. The bureau has provided details aplenty about the rules it is considering, and to a greater extent than EPA or OSHA has previously done.

But in other ways the agency is more guarded, for example, only notifying the small business participants a few weeks before the panel meets, Riese said.

Ron Haynie, executive vice president of mortgage services for the Independent Community Bankers of America, said the preparation required in such a short amount of time makes it difficult for some small entities to participate, even if they wanted to.

“When people can participate by teleconference, it’s not the same because the dynamic that’s there when people are in the room just makes it a better experience for everyone.”

Riese noted that the agency also keeps the names of participants private, even from each other and from the trade groups that recommended them.

“It makes it difficult to have much of an interactive process because you meet once and that appears to be it,” he said. “It’s certainly not the kind of interactive approach that has characterized the use of the SBREFA process in the EPA rulemaking situation, where there tends to be a longer ramp up ahead of the panel meeting.”

Indeed, the bureau is forging its own path when it comes to complying with the statute, said Jane Luxton, Eckman’s partner at Pepper Hamilton and an environmental lawyer who has studied the SBREFA process since it began in 1996.

Luxton said a typical EPA panel will prepare for anywhere from two to eight months before meeting with small business representatives, and its guidelines call for creating a dialogue with participants before the panel meets.

The EPA also puts out its initial thinking on a proposal, gets feedback from the participants, meets with the SBA and OMB, then sends out a second document to be discussed at the meeting.

“All of those earlier steps were skipped in the CFPB process, so they’re really only giving them one bite at the apple for materials that only were prepared by CFPB,” Luxton said. “So that too is another way this is all being rushed.”

Complaints that the process is rushed don’t come as any surprise to consumer advocates.

When lawmakers first proposed an amendment to add the bureau to SBREFA, the industry openly referred to it as the “speed bump amendment,” intended to slow down the rulemaking process.

Plunkett said the bureau’s supporters view the statute as an unnecessary impediment to consumer protection – Dodd-Frank already requires the agency to carefully consider the impact of pending regulations – that would delay the rulemaking process by up to nine months.

“It would give the financial services industry even more time than they already have to kill strong regulatory proposals,” Plunkett said.

Sokolov said much of the timing depends on the statutory requirements the bureau faces in implementing several important rules. The TILA/RESPA proposal must be finalized by July 21, while a handful of other proposals are scheduled to take effect in January.

If the bureau were to delay the formal rulemaking process, its goal of providing guidance before a statute takes effect would be put in jeopardy, Sokolov said.

“What we’re providing is as much time as we can for this pre-proposal input for small financial services providers panel, consistent with meting that goal,” he said. “It’s important to remember that after we issue the proposal, there’s a whole other round of input . through formal comments on the record.”

He also said the bureau intends to review the SBREFA process and consider possible changes after it tackles the slew of mortgage-related rules set to take effect next year.

In the meantime, the bureau will make small adjustments as it goes.

“As an agency we have a culture of doing lessons learned, looking back and seeing how we can do better,” he said. “That’s kind of wired into us.”