“You’ll need to consult with an attorney.” That was the only answer one mortgage professional received — twice — when reaching out to the Consumer Financial Protection Bureau (CFPB). He was contacting them for guidance on a regulatory change.
When asked if following his attorney’s interpretation would protect the lender against penalties if the CFPB later disagreed, the only response the bureau offered was a firm “no.” In other words, compliance was left to guesswork.
This mortgage lender’s experience was once an all-too common one for businesses dealing with the independent federal bureau that was created in 2010 to protect consumers from financial fraud. The CFPB had proven to be maddeningly opaque to deal with and seemingly hostile toward business owners.
But uncertainty has long been a reality for mortgage professionals, especially when dealing with federal agencies. Regulations shift, interpretations change, and businesses are often left navigating an unpredictable regulatory landscape. One reason for this was that for decades, the U.S. courts deferred to regulatory “letter” agencies such as the CFPB under the so-called Chevron deference.
The Chevron deference is a legal doctrine so named because it was developed from a 1984 landmark decision in the case of Chevron, USA, Inc. v. Natural Resources Council, Inc. The decision involved a legal challenge to the U.S. government’s interpretation of the Clean Air Act of 1963.
The legal principle required courts to defer to federal agencies when interpreting ambiguous laws, so long as the agency’s interpretation was deemed reasonable. For the past 40 years, the doctrine granted federal agencies and bureaus broad authority to interpret vague laws with little oversight. That era, however, has now ended.
High court decision
With the Supreme Court’s ruling in mid-2024 overturning the Chevron deference, the power to interpret ambiguous laws shifted back to the courts and away from federal agencies. No longer can agencies such as the CFPB unilaterally define compliance expectations without judicial scrutiny. While some may view this as a necessary check on regulatory overreach, others worry it could lead to inconsistent rulings and greater legal uncertainty.
“But for mortgage professionals, the real concern is not whether regulation leans pro-consumer or pro-business — it’s whether the industry can rely on clear, enforceable rules.”
Chevron deference gave agencies such as the CFPB significant power to define regulations, often making compliance a moving target for businesses. Now that Chevron has been overturned, courts no longer automatically side with agencies, meaning judges play a larger role in determining how laws should be applied. A more level playing field may emerge for businesses challenging agency decisions, but inconsistent rulings across different courts could create new compliance challenges.
Either way, the pendulum is swinging once again. Many argue the previous administration took a consumer-first, business-restrictive approach, granting federal agencies such as the CFPB expanded authority to enforce rules and impose penalties.
Now, with a new administration, many expect a shift toward a more business-friendly stance, potentially curbing the CFPB’s influence and to the detriment of consumers. For mortgage professionals, the real concern is not whether regulation leans pro-consumer or pro-business — it is whether the industry can rely on clear, enforceable rules.
Regulatory Uncertainty
For lenders, brokers and originators, regulatory uncertainty is one of the biggest challenges in operating a compliant and sustainable business. The end of the Chevron deference decision means agencies may no longer have the final say on interpreting laws, but that does not automatically lead to clearer regulations. The following are examples of the new complications that may arise:
● More litigation, slower clarity: Without Chevron, agency rules and interpretations may face more legal challenges. Court cases will now determine the correct interpretation of ambiguous laws, a process that can take years. Until legal precedents are set, mortgage professionals may struggle with compliance uncertainty.
● Shifting compliance standards: Lenders previously followed agency guidance as the definitive word on compliance. Now, courts will have the authority to overturn those interpretations, potentially reshaping compliance expectations. Guidance once considered safe may no longer provide protection.
● Agency overreach without accountability: Mortgage professionals have long struggled with vague regulatory language that allows for selective enforcement. Without clear legal benchmarks, agencies could still impose penalties based on broad interpretations of regulations — leading to the same uncertainty that Chevron once enabled, just through a different channel.
Recent legal disputes highlight these concerns. In December 2024, the CFPB filed a lawsuit against Rocket Homes, alleging an illegal kickback scheme to steer borrowers to its affiliated lender, Rocket Mortgage. Rocket Homes denied the allegations and intended to defend itself in court. In early 2025, however, the CFPB quietly dropped the case without further explanation.
Separately, Rocket Mortgage filed suit against the U.S. Department of Housing and Urban Development (HUD), claiming that conflicting regulations unfairly hold lenders responsible for the conduct of independent appraisers. That case remained active as of March 2025. Together, these matters underscore the risks businesses face when regulatory interpretations are unclear, inconsistent or subject to abrupt reversal.
Under fire
Adding to the uncertainty is the fact that the CFPB itself is in a state of internal turmoil. Recent actions by the Trump administration have effectively put the agency on pause.
In recent weeks, the bureau has been put into operational deep freeze. Acting director Russell Vought instructed the CFPB’s 1,700 employees not to perform any work tasks, halting enforcement and oversight operations.
The CFPB has undergone a major leadership change. Key officials have been removed and others added that are more in line with the Trump administration’s governing philosophy. The changes have signaled potential restructuring of the agency’s overall role.
These developments raise serious questions about the CFPB’s future. Will it maintain its role as a watchdog agency, or will it be significantly weakened under the current administration? More importantly, how will mortgage professionals navigate compliance requirements in an era where the regulatory body overseeing them is in limbo?
Path forward
In this evolving landscape, the mortgage industry must take a proactive approach to compliance and regulatory advocacy. These key actions can help mortgage professionals adapt to this unfamiliar environment.
With Chevron overturned, the burden is now on Congress to draft precise, enforceable laws that leave little room for misinterpretation. Mortgage professionals and industry trade groups must push for regulations that provide clear, objective compliance standards rather than vague language open to shifting interpretations.
Without agency deference, legal challenges to regulatory interpretations will become more common. Mortgage companies must invest in robust legal resources to monitor emerging case law that affects compliance. They need to adopt conservative compliance practices, erring on the side of caution until clearer legal precedents emerge, and work closely with industry associations to stay ahead of regulatory shifts.
And rather than waiting for agencies such as the CFPB to dictate compliance rules, mortgage professionals should actively participate in shaping regulations through industry groups, public comment periods and direct engagement with legislators. A collaborative approach can lead to regulatory frameworks that balance consumer protection with business stability.
Examples of industry groups that mortgage professionals should be involved with include but are not limited to:
● Mortgage Bankers Association (MBA)
● National Association of Mortgage Brokers (NAMB)
● American Bankers Association (ABA)
● Community Home Lenders of America (CHLA)
● Housing Policy Council (HPC)
● National Association of Realtors (NAR)
The Supreme Court’s decision to overturn the Chevron deference marked a fundamental shift in the regulatory environment. While agency overreach may be reduced, new legal uncertainties may arise that mortgage professionals must navigate carefully.
As the regulatory pendulum swings once again, the focus should not be on whether policies favor consumers or businesses. Instead, the industry must advocate for consistency, predictability and clarity — ensuring that compliance is based on fixed, enforceable rules rather than the shifting interpretations of political cycles.
Without that stability, mortgage professionals may continue to find themselves in the same position: picking up the phone for guidance, only to be told, “You’ll need to consult with an attorney.”
