As deputy director for the Consumer Financial Protection Bureau, Raj Date helped write the rules drawing stricter lines around what kind of mortgages the government would encourage. Now he's back in the private sector and has a new company that aims to ... sell unorthodox mortgage products to borrower who don't meet the CFPB's qualified mortgages standards.
Date hastens to explain—quite accurately—that there's no hypocrisy here. The CFPB rules are about what kind of mortgages the government will guarantee. There's no reason private sector actors can't or shouldn't reach beyond that if they want to. But there is a certain irony. And it also underscores the real challenges of consumer financial protection. It's easy, intellectual speaking, to identify the fact that people probably shouldn't eat so many cheeseburgers. But an effective anti-cheeseburger policy is going to run into the problem that cheeseburgers are delicious, people want to eat cheeseburgers, and we put value on letting people do what they want. In much the same way, people really want credit. It's useful. It's fun. And it's potentially lucrative to give it to them. Where there's a will there's a way, but where there's a way there's often trouble down the road.