Mortgage firms can do more to influence regulation, and they don’t need lobbyists or lawyers, a pair of legal experts told attendees at a mortgage servicing conference.
The comments were made at How to Win Friends and (Legally) Influence Government, the April 23 second general session at the National Mortgage News’ ninth annual Mortgage Servicing Conference at the Westin Galleria hotel in Dallas.
The packed morning session paired University of California Irvine law professor Katherine Porter with Quicken Loans Inc. Executive Vice President of Mortgage Policy and Counterparty Relations Peter Carroll.
Together, Porter and Carroll highlighted advice and opportunities for mortgage servicers to better engage with federal regulators before, during and post-rulemaking.
“I think you should kill all lawyers, and I am a law professor, keep in mind, and a lawyer, and proud to be one,” said Porter, who served as California’s independent bank monitor during the $25 mortgage settlement of the five largest banks in the United States. “And after you’re done killing all the lawyers, I think you should kill all the lobbyists.”
Once session attendants quieted their laughter, Porter, said she didn’t mean what she said literally. Rather, she said servicers needed to stop relying solely on legal professionals to represent them with lawmakers. A servicer’s experts within specific business disciplines affected by specific rules, where a lawyer was not an expert, were crucial people for engaging with lawmakers during the creation and proposal of a regulation, according to Porter.
“You have people in your company who are good at these things, and bringing their voices into dialogue with the government, either formally or informally, will do a lot to improve the quality of the regulation or the approach that the government takes,” Porter said.
Carroll, who served a stint in the Consumer Financial Protection Bureau as the assistant director of the office of mortgage markets, said servicers should watch out for pilot programs related to specific regulations. These pilots, according to Carroll, were opportunities for servicers to share industry expertise on what will and will not work best for the consumers.
“You can plug into some of these outlets that are there for innovation within some of these government agencies that really want to try to help you get new, innovative things off the ground,” Carroll said.
Both panelists agreed servicers should use government pilot programs to gauge whether suggested deliverables, products or action items are effective. Servicers also could use test phases and industry expertise on what actually works to create alternative products and programs that satisfy regulatory guidelines and best serve both consumers and business practices.
“See that the law is a moving target, and that you can be influential and creative in the direction that it moves,” Porter said.
Knowing differences between local, state and federal agencies, their roles, operational approaches and legal intersections also was a key session point. Rather than having singular approaches, servicers should employ different strategies for working with different levels of government in order to capitalize on making industry concerns and expertise heard. For instance, treat local and state agencies like trusted community partners on specific cases.
Providing more data and high-level industry education were key elements suggested for working with federal-level institutions.
“Now that I’m in my role at Quicken and trying to think of ways to influence policy, I always try to break it down to the bare essentials — problem, solution, benefit, same way you might think about your own products” Carroll said. “The more these things can be laid out, be made very crisp and clear and easily quantified, you’ll find that policy makers will react and they’ll react at the regulatory level and the lawmaker level too.”
