Since helping draft the final rule for a qualified mortgage, former ""Consumer Financial Protection Bureau"":http://www.consumerfinance.gov/ (CFPB) Deputy Director Raj Date has resigned from the agency and opened his own advisory and investment firm aimed specifically at ""those borrowers who do not meet the standards for 'qualified mortgages' as set by the CFPB under rules.""[IMAGE]
Other senior employees at CFPB have also left to join Date, including Gary Reeder, Chris Haspel, and Mitch Hochburg.
This turn of events has raised questions as to the agency's ethics and integrity.
""Simply put, it appears that former CFPB employees are now offering financial products in a market sector created by the very rules they were in a position to influence while working in senior leadership positions at the CFPB,"" stated[COLUMN_BREAK]
a letter from House Financial Services Chairman Jeb Hensarling (R-Texas) and House Oversight and Government Reform Committee Chairman Darrell Issa (R-California) to CFPB Director Richard Cordray Wednesday.
Date reportedly left the CFPB to spend more time with his family at the end of January, one month after the announcement of the final rule for a qualified mortgage.
Two months later, in March, he opened Fenway Summer LLC to assist borrowers who do not meet the requirements of a qualified mortgage.
""Most lenders assert that, as a result of the CFPB's new qualified mortgage rule, they will no longer issue non-qualified mortgages"" because of the high risk and costs involved in these loans, according to the Representatives' letter. Fenway will fill this market gap created by the new rule.
In their letter, the Representatives requested communication between Date and others regarding the drafting of the qualified mortgage rule, any communication between CFPB employees regarding the creation of Fenway, and any communication between Fenway and the CFPB since Fenway's establishment.
The Representatives also reference similar concerns others have expressed, including a comment from Richard Painter, a former White House ethics officer, who called Fenway ""an extortion racket,"" and said of its employees, ""they'll call up their buddies in the agency to call off the dogs.""