Saturday Cup of Joe: a lending and tech(ish) newsletter

Friends & Colleagues,

Saturday Cup of Joe #52! One year! When I started this project, my friend Brad told me to commit to sending out “occasional observations” in case I couldn’t do it each week. I took that as a challenge. Nailed it. Each week for a year. My one year anniversary at work is May 9th and here we are. 52 weeks of emails.

I started writing this Saturday-morning-thing to stay in touch with colleagues and friends from New England and found myself writing about the mortgage industry, home ownership, the #NextBelt, leadership, and some of my “favorite-but-annoying-to-everyone-else” valuable lessons.

These weekly emails got a little long but I know many people skip around and read what is related to their businesses, organizations or careers. My goal for the next year is to bring more concise descriptions of interesting articles, stay current on the lending industry and, beyond that, focus more narrowly on three specific things: millennial / first time homebuyers, the #NextBelt, and lessons for growing leaders. Maybe this coming year can feature some guest contributors, too.

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Next week, tomorrow, I’m headed down to MBA’s Legal Issues conference. Last year, I didn’t attend because I was in the process of changing companies. I cannot believe all that’s happened in the last year. This year’s conference will focus on the big picture regulatory environment: what’s the outlook for CFPB leadership, what impact will that have on enforcement actions, and in the meantime, what are the top concerns for lenders in 2017. I’m going with a few outstanding technicalities on HMDA: our industry’s data reporting statute, questions regarding overzealous state regulators, and interest in others’ views of remote electronic notarizations.

I’m participating in two sessions — a roundtable on Digital Mortgages and a panel Vendor Management/Third Party Risk. Is anyone headed down to the conference too? Let’s get together and catch up.

This week we look at:

  • CFPB regulatory balance? (Of Interest)
  • CFPB and state enforcement balance? (Got Me Thinking)
  • #NextBelt is where it’s at (This week in Detroit)
  • I am a Millennial (Talk the Talk)
  • Millennials in the Midwest (Walk the Walk)
  • Thoughts, bonus and quote (all the way at the end)
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May Day in Detroit. Yes, I wore it to preschool and yes, my daughter asked me to take it to work.

Of Interest: . What’s more, the ABA has joined the call first trumpeted by House Republicans that would dismantle Dodd-Frank altogether. The announcement came in the form of a but alerts the Department of Treasury to the possibility of a complete rewrite to all financial laws and regulations.

Kinda feels like something’s brewing.

It’s not just because President Trump won on a wave of populist appeal but because business has been grumbling about regulatory overreach for years. Not in mortgage, mind you; the mortgage industry took the regulation and enforcement after the crash “willingly.” In fact, it wasn’t until eight or nine years after the mortgage crisis that the industry began to consider pushing back.

It was the CFPB’s extra-legal attempts to regulate additional industries or companies; the stubborn decision to send messages to industries through consent orders and the Bureau’s unwillingness to distinguish between the truly destructive practices & those that actually work for consumers. Unfortunately, the combination of Trump’s election, PHH Mortgage’s lawsuit against CFPB, and other recent attacks on CFPB have encouraged or otherwise been used by state regulators to reassert themselves as “the new sheriff in town.” It was not that long ago that we were saying that about CFPB. State regulators, however, do not have the resources or expertise to properly enforce federal law. Nevertheless, this transition time will end up being good for the market. The final Dodd-Frank amendments will take effect while Congress is considering significant revisions to the entire statute. The federal appeals courts will rule on the very DNA of the CFPB, perhaps rolling back their independent authority. The Treasury Department is making promises to undertake GSE reform in the next year potentially restructuring the secondary market. The states will be challenged to articulate the appropriate balance of federal and state regulation. Or not. And all the while, consumer expectations around cost, efficiency and convenience will continue grow more demanding. Bring on 2017.


Got Me Thinking: . Last week, I highlighted Ryan Holiday’s analysis of home buying versus renting. This week, the CFPB took on the same challenge. CFPB took a (perhaps appropriately) clinical view of home equity, taxes and financial flexibility. A telling comparison published so closely in time.

One thing the CFPB does not seem to appreciate is creativity. A somewhat broad generalization given the boundaries that were pushed in a market that operated before the CFPB existed. Once again, the market is moving faster than regulators. Though, this time it appears to be related to consumer experience, convenience and efficiency.

On one hand, the market moving faster than regulators has always been the case. On the other hand, technology and ever-decreasing resources at the state and federal level make it even more difficult for regulators today. Let’s take a few examples from this past week. Innovation. Interesting. . Potential game changer. The downside is that there is a cost to innovation and many regulators find interesting, threatening as well.

One thing I’ve been thinking a lot about this week is how the Bureau will change in the new Presidential administration and how the Bureau’s evolution is impacting state regulators. In some ways, it seems states are trying to “step up” and tough sanctions as a way to “off set” CFPB’s perceived political challenges.

Which brings me back to my question. I do not know whether I’m bumping up against this for the first time and so I’m only now experiencing a trend that’s been true all along (or whether it’s intensifying and getting more severe). In other words, if the technology and the market continue to move at lightning speed, and government budgets and resources continue — will this tension between certain regulators and companies only intensify? Is it a pendulum that eventually swings back? I assume so, but it can be expensive and demoralizing along the way. Perhaps that’s the true nature of regulated entities. Yet, in some cases of regulatory compliance, when even the regulator has trouble tying the violation back to any consumer interest or consumer harm, the frustration can mount quickly or even boil over.


This week in Detroit: . One of the quotes that caught my attention was that Detroit’s buildings are “building blocks for an inclusive, diverse, economically vibrant city.” One of Meredith’s and my favorite neighborhoods, Jefferson Chalmers, was recently listed on the National Register of Historic Places. The character, as identified in this report or just observed , is obvious and inspiring. The ReUrbanism that appeals to us (and hopefully a lot more people like us) is not just limited to Detroit. The character and inspiration evident in Detroit’s buildings is the character and inspiration of America itself. Whenever I write about the #NextBelt, it’s really the reimagination of America in the next generation. Pittsburgh. Cleveland. Milwaukee. Cincinnati. Louisville. . Six cities. One Theme. Character, authenticity, hustle. You’d think that’s three themes, but it’s one.


Couldn’t resist:

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Actual screenshot


Talk the Talk: Last week I said to Meredith, “Well, it’s time I finally decide once and for all if I’m a millennial.” I’ve been writing about millennials for 52 weeks, almost every Saturday, and I routinelty shift between “them” and “us.” I have never find the proper feeling in either. At first, many articles would not include those of us born in 1983. Then, slowly, the birth year range was expanded to 1982, 1981, and even 1980. Deep down I always knew I was likely to be an early millennial. Imagine my surprise when I saw the New York Magazine headline . The author, also 34 years old, writes eloquently and comprehensively, so much so that I won’t try to overthink it. It’s official, for me at least: I’m a millennial.


Walk the Walk: . Ellie Mae’s Millennial Tracker found that millennials are buying homes in cities across Ohio, Michigan, Kansas and North Dakota. Admittedly, many of the cities mentioned were not the #NextBelt cities profiled above, but at the same time, for lenders and technology vendors looking for proof that a) Millennials are quickly becoming first-time home buyers and b) They are willing to do it in cities in between the coasts. I think it shows potential for the economic outlook in new and authentic places over the next few years. Millennials are not just looking for inexpensive homes: millennials want their own story. It’s the new make-it-your-own narrative.

As if more “proof” was needed, apparently, optimism is highest in the Midwest. The Detroit Free Press has picked up on this. Though overall it was not a standout piece, the article include a notable quote, a trend in millennial preferences, and a prediction of the coming volume in home purchases.

1. “After years of staying put and sleeping on the couches of relatives, the younger population is on the move again.” — Diane Swonk, CEO, DS Economics

2. The challenge, millennials say, is finding something that doesn’t need thousands of dollars in updates. Millennials don’t want to deal with dust, dirt and dated kitchens.

3. The spring home buying season is expected to be one of the busiest and most competitive in recent years. Nearly three million first-time home buyers are expected to enter the housing market in 2017.


Moment of non-business:



By Gwendolyn Brooks

We real cool. We

Left school. We

Lurk late. We

Strike straight. We

Sing sin. We

Thin gin. We

Jazz June. We

Die soon.


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Actual screenshot


Today’s Thought: Go to finance & accounting for the real deal. I was reminded this week of a shortcut. I spent the last few weeks trying to nail down whether we had any in-house knowledge on a particular topic or whether we’d have to go external — hire a qualified consultant — to handle something for us. I checked around and no one had a lead for me on an internal source of the information I needed. After two or three “dry wells,” I assumed that we didn’t have the info and moved on. Fast forward about ten days and it turns out we did have two resources in play on the subject matter I had inquired about. It was the finance team, that is still paying the agreement(s), that was able to confirm we still have access to these consultants. As soon as I heard that, a lightbulb went off: I had forgotten that you can always go to the money for answers. If you need to know what’s available, just see what you are still paying for. It’s always the best way to know what’s up.


Quote: “I constantly see people rise in life who are not the smartest, sometimes not even the most diligent, but they are learning machines. They go to bed every night a little wiser than they were when they got up and boy does that help, particularly when you have a long run ahead of you.”Charlie Munger

Bonus Content:

Continued success,

Written by

Thinker, curious leader, once an attorney…always trying to answer well.

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