With oversight and enforcement moving back to the states, one expert urges brokers to stick to the basics
With the reduction in staffing at the Consumer Financial Protection Bureau (CFPB), there have been corresponding stories about reduced enforcement at the federal level.
While federal enforcement agencies might not have the same resources currently, many of their enforcement efforts, and in some cases personnel, are moving to the state regulatory level.
Michael Waldron (pictured top), founding partner of Gate House Compliance, LLC, said he hopes that the change in where the enforcement is happening shouldn’t change the way brokers approach compliance.
“One would hope that it's the same thing you've been doing all along,” Waldron told Mortgage Professional America. “Giving appropriate focus and resources to the state requirements and the regulators that enforce those requirements, as you are on the federal side.”
Those who have been in the industry for a long time remember when state regulators were the primary rule enforcers.
“It's a cyclical business,” Waldron said. “There was a time, pre-bureau, that the states were your primary regulator. Then people applauded the fact that we were going to have a federal regulator with a bigger presence.”
A cyclical business
One of the challenges in the past with state enforcement was that it was uneven between the states. For brokers and lenders operating in more than one state, this can be particularly challenging.
“State oversight, let's not even call it enforcement, state oversight is incredibly disparate,” Waldron said. “There have been efforts to try to address that. There are multi-state exams, and there are other things to try to create some efficiency, but at the end of the day, you still have 51 jurisdictions. All of which have constituencies to serve and consumers within their states to protect.
When much of the oversight shifted to the federal level, some applauded this development. Others are pleased with the move back to the state level. Waldron cautions that there are issues with both ways of handling oversight.
“When the bureau came, people had some sense of relief, and then it was a ‘Be careful what you ask for,’” he said. “And now with the Bureau essentially saying, ‘This should be put in the hands of the states. We’re not, under this administration, going to allow this bureau to have the same kind of far-reaching impact, because we're decentralizing,’ people applaud that again. And my advice is the same: be careful what you ask for.”
Waldron urges brokers not to get too wrapped up in which level of government is handling oversight, but rather to make sure you are in a position to adapt to any potential changes down the road.
“This is a cyclical business, and I've been in it long enough that I've seen it each way,” he said. “My advice is, don't get too caught up in the cycle. Keep a steady and even hand. Work on a solid foundation, that can be nimble enough to apply some resources to some different areas that maybe have a little more meaning today than they did yesterday.
“Get an understanding of what may come tomorrow. But don't let that consume you. Don't buy into the concept of lulls in enforcement, or unempowered federal regulators versus empowered state regulators.”
Stick to the basics
It has been an uncertain time in the mortgage industry in more ways than one. Economic turmoil has led to affordability challenges and elevated rates for much of 2025. Now, changing regulatory oversight adds another layer of complexity.
However, Waldron believes brokers need to stick to the basics and continue to push through the headwinds.
“Continue to keep perspective when there is uncertainty and when there are significant challenges and changes,” he said. “Sometimes it's easy to get caught up in the noise at the end of the day. Brokers need to stay true to themselves and to the customers and communities that they serve, and they need to continue to execute on the fundamentals.”
He believes that brokers need to continue relying on partners in the mortgage process, including compliance, to help them navigate any potential roadblocks to closing mortgage deals.
“They need to make sure that they are finding the right partners who support their efforts and their channels, and they need to continue to invest in their own growth and development,” Waldron said. “I don't think folks have given the broker community enough credit, not simply for what they do, but also for how they do it and truly the downstream impacts of their efforts to the market as a whole.”
With CFPB downsizing, states are ramping up oversight. Daniella Casseres of Mitchell Sandler told brokers at NAMMBA Connect to prepare for more investigations and stricter compliance rules.
— Mortgage Professional America Magazine (@MPAMagazineUS) August 25, 2025
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In the end, it comes down to getting deals closed and making sure that things are done the right way, not just to stay in compliance but to make sure customers have the best possible experience.
“At the end of the day, people want an asset,” he said. “They want a transaction where the people involved feel good about it, and they want customer retention. It’s very hard to have customer retention if you don't have a good customer experience. And quite often, that starts with the broker.
“The question is, how seamless is the acquisition to the execution? I think that will continue to be an area of focus for all of us, but I think the brokers can lead and continue to lead on that front.”
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