What Biden’s Competition Order Means for Mortgage Firms


Although President Biden a competition decree was issued last week targets large tech companies using their bargaining power to force mergers and suppress smaller competitors, mortgage-related businesses need to be aware of its specific CPB competition requests.

The CFPB order proposes to use unfair, misleading, abusive practices and practices part of the Dodd-Frank Act, “to ensure that actors involved in illegal activities do not distort the proper functioning of the competitive process or gain an unfair advantage over competitors who follow the law.”

However, as written, the UDAAP is not the law that typically applies to companies using their bargaining power to suppress competition, noted Jenny Lee, Arent Fox’s partner in complex commercial litigation.

US President Joe Biden signs a decree at the White House State Canteen on July 9, calling for greater competition in the US economy.

Alex Edelman / Bloomberg

But, she said, it may have some applicability when it comes to harm to consumers.

“If a business practice involves something that is believed to be a material misstatement of information for a consumer and the consumer has reasonably relied on it, then it will be something that falls under the umbrella of the UDAAP, but not something that would be straightforward – anti-competitive measures such as antitrust litigation, monopoly or contractual relationship, ”Lee said.

Thus, the Biden administration could use the UDAAP “to indirectly address the lack of fairness in the market,” Lee said. This is actually a throwback to the CFPB mission. as planned now-sep. Elizabeth Warren, Massachusetts.

“If I’m mortgage company A, and my competitor B is violating consumer protection laws, it’s actually not competitive for me as a law-abiding company,” Lee said. “In other words, it’s just a concept that the market really requires everyone to play by the same rules of behavior; it’s not that scammers compete in a way that gives them an unfair advantage over other businesses. ”

Another section of Dodd-Frank specifically mentioned in the order deals with consumer data. and the right to access information. This is in addition to the FTC’s call to watch out for “unfair data collection and surveillance practices that could harm competition, consumer autonomy and privacy.”

While the order may not directly affect Attom Data Solutions’ decisions, “where it can affect us is if it affects some of our customers, our customers are very large enterprises,” said CEO Rob Barber. “And to the extent that they are affected, it can trickle down and affect us to some extent.”

Many relationships in mortgage technology are not straightforward. “The data world is typically a world in which companies have multidimensional relationships,” Barber said. “A company can be your client in one area, a competitor in another, and a supplier in a third.”

Attom has a partnership with Mortgage technologies ICE, a dominant player in lending systems, and Black Knight, a dominant player in service platforms.

“The government is now looking at vertically integrated companies that move up and down a defined value chain,” Barber said.

Attom’s role in the chain is data aggregator and disseminator. “We’re not a large product and application company, which means we’re not trying to create end-to-end solutions for end users,” Barber said. “So you won’t see Attom buying companies that contribute to the mortgage value chain.”

Attom recently acquired GeoData Plus, a real estate database that provides its clients with access to real estate reports, appraisal and search tools.

On the data side in technology, there is no problem with competition; If anything, the ability to aggregate data at scale is increasing, not decreasing, Barber explained.

“You see many other companies entering different corners of the data world that didn’t exist five or 10 years ago,” he continued. “And we think this will continue as the barriers to data aggregation at scale are removed.”

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