CFPB Advisory Board: It’s all About Balance

The Consumer Financial Protection Bureau (CFPB) is writing rules that can have an enormous impact on real estate. The qualified mortgage (QM) rule, which sets out lender  standards on what constitutes borrowers’ ability to repay, is one of them. So it was good to hear that among the members of CFPB’s new advisory board is Gary Acosta of New Vista Asset Management in San Diego.

Gary Acosta

Acosta is one of the founders of the National Association of Hispanic Real Estate Professionals (NAHREP) and knows real estate about as well as anybody can. His company, New Vista, which he launched with Jim Parks, the chair-elect of the Asian Real Estate Association of America (AREAA), specializes in helping to make home ownership a reality for moderate-income households who want to own and have the means and desire to be responsible owners.

Acosta says his goals for the board, which meets for the first time later this month, is to let the director of CFPB, Richard Cordray, and his staff know how important it is that any rules affecting real estate strike just the right balance between protecting consumers and maintaining financing opportunities for those who could so easily be knocked out of the market by overly restrictive regulations.

“I’m certain that, one of the reasons I was selected, is my work with the Hispanic community in the housing sector,” Acosta said last week. “Hispanics were disproportionately affected by the housing crisis, in a negative way, but I also think I have an opportunity to try to articulate the viewpoint that attempts to strike a balance between consumer protection and access.”

That balance is really what CFPB must keep in mind with everything it does, because if it goes too far in either direction, the real-world consequences will be significant. It’s certainly possible for CFPB to make residential mortgage lending rules so airtight that no loans could ever go bad—because only those with the most pristine credit profiles would get financing. CFPB could also go in the other direction and make rules so accommodating that financing would be available to many households, including those that aren’t ready for the long-term commitment that sustainable home ownership requires. So, getting the balance just right between the two is job one for Acosta and the other board members.

“The key is ensuring mortgage financing is available but not so loose that we see a repeat of the debacle we’re just getting through now,” he says.

The board has 25 members. The appointees come from a range of professional, academic, financial, and advocacy backgrounds. Acosta’s is in real restate investment and  asset management. Among the entities represented are AARP, Neighborhood Housing Services, USA Cares, and Woodstock Institute. From academia are board members from the University of Minnesota, Georgetown Law School, and Dartmouth College. From industry are board members from Citigroup, American Express, and Bank of Hawaii.

CFPB was created as part of the big Wall Street reform law enacted in 2010 and it took over many of the consumer-focused regulatory responsibilities from other agencies, including HUD and the U.S. Department of Treasury. The QM rule is also a product of that Wall Street reform bill, as were some of the other key mortgage finance rules being written right now, like the qualified residential mortgage (QRM) rule. These and other rules are intended to protect consumers and help prevent the kind of mortgage excess that led to the financial crisis.

Although the board’s role is only advisory, it’s important that people with industry knowledge like Acosta be at the table with CFPB staff so they can ensure the industry’s voice is heard along with all the other perspectives that have a stake in how the agency writes its rules. The board by law will meet at least twice a year.

“The director of CFPB brought together this group so that he and his team can take these various perspectives into consideration when they’re making their decisions,” says Acosta.

To that end, it’s good the agency will have these diverse perspectives as it moves forward on QM and the other crucial mortgage finance rules.

Robert Freedman

Robert Freedman is director of multimedia communications for the NATIONAL ASSOCIATION OF REALTORS®. He can be reached at

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