From the CEO

Holding Ourselves to Higher Standards

The new Consumer Federal Protection Bureau will bring about revolutionary changes within the industry, and we at the Five Star Institute (FSI) are ready to face them head on. The legislation calls for initiatives that are likely to transform the industry completely, and there were and still are many opponents of the new reform measures. At FSI we will work to keep the industry informed of current events and new legislation, seamlessly adapting our products to keep in line with all changes.

The Consumer Federal Protection Bureau (CFPB) was officially created in July and in September Elizabeth Warren was named Assistant to the President and Special Advisor to the Treasury Secretary on the Consumer Financial Protection Bureau. This role has not been explicitly defined, but it is believed that though Warren will help to set up the Bureau, she will not necessarily be in charge of running it.

What that means for this sector of the industry is that while consumer protection is of course important and the whole reason for the creation of the Bureau, there is no war waged between the Bureau and lenders/servicers.

Those with reservations regarding the Bureau are not alone nor are they worried for nothing. But the President’s decision not to nominate Warren for the position of director can be seen as a compromise or even as foresight.

The industry needs regulation, but it can be trusted to direct and regulate itself once guidelines are in place. The housing market will certainly change and consumer mortgage products will assuredly be reduced, but the market may be safer on both ends of the spectrum because of it.

The Bureau will set up a department for Consumer Education, which I believe is of the utmost importance, because with education comes accountability. Wise financial choices can only be made with proper education. The Bureau also calls for transparency in many aspects of the loan process, which, coupled with consumer education, will result in products that work well for the lender, the borrower, and the servicer.

We can and will work together, with the government, with consumers, with anyone involved in this process to bring about change in the industry that works for everyone. At FSI we are committed to holding ourselves to higher standards, and because of that, as the industry changes, so will we.

Looking forward to seeing you at one of the many upcoming Five Star Institute events,


Ed Delgado
CEO, The Five Star Institute