Their headline was a strong tease. Indeed, there were two Consumer Financial Protection Bureau (CFPB) representatives at the Manufactured Housing Institute (MHI) Congress and Expo (C&E) event last week in Las Vegas. It was hardly an 'invasion.'

Indeed, we knew the week prior to Congress and Expo that the pair had registered and paid to attend the MHI event.

Your tax dollars at work?

When we asked about the presence of the two CFPB representatives, MHI President Richard 'Dick' Jennison told MHProNews:

“We at MHI, along with our leadership team, were definitely aware prior to the event and planned accordingly that two individuals from CFPB from Washington, D.C., registered and paid to attend MHI’s Congress & Expo."

Ready to go a little deeper?

"Unlike MHI’s business meetings, which only MHI members and invited guests are allowed to attend, Congress & Expo is open to everyone.”

While this incident might cause angst for some who are 'flying under the radar' or might be on the wrong side of a regulatory line, it has little or no impact on those who are doing business according to the regs.

Screen doors on a Sub

When an MH industry operation involved in finance was asked about a topic we raised last year – ie: how can a mom and pop MHC or retail operation hope to have a compliant captive finance operation – here was that operation's executive's reply.

When we "…with a lot of resources are constantly trying to keep up with Dodd-Frank and other changes. This (selling programs to an independent MHC or retailer trying to comply with DF) seems like selling screen doors for submarines.

Thanks for a morning hoot."

Don't Get Scared, Get the Facts, Plan and Act!

In our two part series – Manufactured Housing and Captive Finance: Can it be done Successfully in today's Environment? – with numerous quotes from industry pros, can be found at the link above addressed that issue in depth.

While the views vary widely, there are legal experts that doubt that a modest independent can comply with a captive finance program, given the fact that much better funded community banks and others are leaving lending due to Dodd-Frank and the CFPB's current regulatory regime.

A similar regulatory concern needs to be expressed about those doing so-called "lease option" deals. Recall this popular Industry in Focus report, NCC Discussion on Manufactured Housing, Rent to Own and Lease-Option.

Meet Marie and Alexi

Marie Whittaker is reportedly from the CFPB's Office of Research and Alexei Alexandrov is a CFPB economist who has worked on their appraisal rules.

If one of these had 'enforcement division' or something similar on their business cards, then certainly the alarm bells might well be going off in manufactured housing offices across the country.

But the surface view at present is quite the opposite. One reason we had no initial intent to address this issue is that there seemed to be no cause for alarm.

In fact, this might be good news for the HUD Code manufactured housing industry.

How so? What if they are part of an effort to create a specialized – and much needed – MH unit at the CFPB? So suggests a wise soul who has thoughtfully provided us – and thus you – much needed insights.

MHC operator 'Scared to Death'

Are you a smaller operation doing captive finance or lease-option lending?

You should think about what a strong, growing organization did. Call an industry lender, and work out a program to sell all their notes and them so the lender can "be the lender." Why? 'Because making those loans and holding the paper in the Dodd-Frank era scares me to death.'

So sayeth the MHC operator selling off their loan portfolio.

Don't get me wrong – "Go Lending!"

Don't get me wrong. In a truly free enterprise system, lease-options or seller-financing ought to be doable in some legal/moral form or fashion that doesn't break the bank…

…or the law.

Will the CFPB swing the pendulum back? Will Congress press changes?

Time will tell, but the political winds seem to be changing. What is certain is that some regs MUST change, or millions are being penalized. Just one of many issues is the 'steering' one. Businesses are being forced to shot gun applications, lenders must wade through reams of paper they normally don't look at; and the consumer is harmed, not served.

Associations, CFPB and MH Pros Like You

Larger operators can access financing in a variety of ways – including per the experts we ask – complaint captive financing.

But any operation can team up with a local lender willing to learn, or one of the many industry lenders who are already hip deep in providing compliant lending that can make you money.

In the meantime, rather than quake over the CFPB, we should be working all the channels to make ever-more reasonable financing available. Good associations are critical to meet that need.

As noted above, if CFPB is researching and creating a unit that better understands and deals with our industry, that could be a good thing for manufactured housing in the short term.

So you new or prospective investors who are reading this, please don't be alarmed or sweat it. The many experts we reach out to on issues are routinely happy to tell us which way is up.

Let me take a moment to thank those experts as always for their insights and wisdom, for without them, this commentary and news site would not be the same value that it is to you in their absence.

Policy Failures – Not Politically Correct

Your Masthead scribe doesn't have to be politically correct. While we work with associations, we are not working for any association, so my thoughts are mine not anyone else's.

As we've said many times, there is absolutely value and the need for associations to have strong ties to BOTH major parties, that is sound association practice.

We should all be pleased that there are Democrats, Republicans and Independents all involved in the MH Association world.

That said, here is the politically incorrect part that we can say and associations can't.

Objectively, the CFPB needs to be aware that the political winds in the nation has been shifting.  IMHO, President Obama is watching his foreign policy as well as his domestic agenda unravel. While a largely compliant media covers the Administration’s 6, the current White House resident is using the mechanisms of government to do what he promised.

To fundamentally change America.

The change that has come is for the worst. People of every racial, gender, social or economic group (save perhaps the uber rich, who also want change, knowing the economy is suffering under the current scenario) are worse off today than 5 years go. Public perception is increasingly getting it on such facts, even with an all-too-often administration compliant mainstream media.

Sorry to those who love the current regime, but my parents were thrilled to come to the U.S. precisely to get away from power-hungry Big Brother socialistic governments!

The CFPB is to finance what ObamaCare is to health care and the insurance industry. Both – as they stand today – are harmful.

• We have something like half-a-million fewer Americans working today than in 2008.  Ouch!
• Obama appointee, Federal Reserve Chairman Janet Yellen, referencing the Congressional Budget Office's report said recently. “There is more work to do to put fiscal policy on a sustainable course. That progress has been made over the last several years, in bringing down deficits in the short term, but that a combination of demographics, the structure of entitlement programs, and historic trends in health-care costs, we can see that over the long-term deficits will rise to unsustainable levels relative to the economy.” (Editor's note, bold emphasis added).

Can they be fixed? Sure, but only when enough people of good will move in that direction.

The View from the Masthead

Our position on the issues are pretty clear.

• We believe in America,
• we believe in manufactured housing,
• we believe in reasonable regulation
• but are utterly opposed to the federal over-reach that we have seen for many years now.

That over-reach easily dates back to

• Bush 2 on some issues (example, NSA – and their growing of the Medicare program in unsustainable ways, more) and to
• Barack Obama on a range of topics from foreign policy, job killing policies, ObamaCare, CFPB, energy policies (think about the no-brainer on the Keystone Pipeline), and much more.

As we shared in our previous Mastheads, our industry is well poised for the future. We need to align the talent to deal with the regulatory issues, and indeed progress is slowly being made. Consider this news alert from MHI:

“On May 7th, the House Financial Services Committee adopted the Preserving Access to Manufactured Housing Act (H.R. 1779). The measure, which was adopted by voice vote, won't be formally approved by the committee until a recorded vote is tallied. A recorded vote is expected to occur the week of May 19th – the House of Representative is scheduled to recess the week of May 12th.”

It should also be noted that MHI has generated some 5,000 comments to Congress through their new electronic system!

Yes, the progress is steady, albeit we all wish it were faster. More on that another day.

More to Do, but More Opportunities Too

We've been saying for some years now that our industry must get better engaged with our consumer base and select non-profits. There is no point in rehashing facts shared in Manufactured Housing's Metaphoric Magic, or earlier columns on how energizing our own base in micro-targeting style could make manufactured home owners/businesses a political powerhouse.

I know there are some in the communities world who get nervous about such thinking, but there is no reason to be so, as we or other good MHC operators know from experience.  Happy residents and good management are allies, not enemies.

The Winds are Changing

Richard Cordray doesn't call me for my opinion, but if he did, it would go something like this. Pivot while you can. The political winds are changing in the nation and DC.

The clock is winding down on the Democratic hold on the Senate, and if Republicans don't blow it, they'll have both houses of Congress and perhaps even the White House in 2016.

CFPB, HUD, FHFA, et al, should all pivot now. Make yourselves more of the kind of 'partners in progress' with industry professionals and consumers rather than an opposition to it.

We are the Future!

Manufactured and modular housing are the wave of the future. It is utterly needed for all the right reasons. As we continue to step up more, and the regulators and politicos realize how much they need us, we will see a new era born.

When that happens, let's not blow it like we did in the mid-to-late 1990s. Consumers, lenders, professionals, associations – everyone can benefit by having the right policies and good, professional, sustainable practices.

Let's leave the proverbial screen doors off the submarines.

Let's serve the public well, and with enough people of good will pulling together, we can together create the bright future our industry and the home buying public deserve.

We'll likely pivot on topics mid-week, see you back here then! ##

(Image Credits: Politicspa, WikiCommons, Plus1 Properties,)

L. A. 'Tony' Kovach ManufacturedHomeLivingNews.com | MHProNews.com | Business and Public Marketing & Ads: B2B | B2C Websites, Contract Marketing & Sales Training, Consulting, Speaking: MHC-MD.com | LATonyKovach.com | Office 863-213-4090 Connect on LinkedIN: http://www.linkedin.com/in/latonykovach