The bureau is invoking its largely unused authority to examine nonbanks when it believes they are engaging in risky conduct that could harm consumers.

The Mortgage Bankers Association said it has become aware of bureau examiners aggressively demanding privileged attorney-client information from nonbanks.

Mortgage originators appeared to have been lax in adhering to lending practices under Regulation Z, the latest CFPB supervisory highlights report reveals.

Although CFPB Director Rohit Chopra’s tenure so far has been unusually quiet on the mortgage front, industry attorneys and executives said other actions indicate there’s enforcement on the horizon.

The CFPB plans to launch dedicated units within its supervision and enforcement division to enhance detection of repeat offenders and to better hold them accountable.

The bureau announced changes to examiners’ procedures, saying it will now scrutinize all covered markets for discriminatory practices under the “unfairness” standards.

The DOJ is self-referring investigations and scrutinizing lenders’ HMDA loan application register data for redlining practices, according to industry attorneys.

For its part, the CFPB said it will take an “active leadership role” on the Federal Financial Institutions Examination Council’s Appraisal Subcommittee.

Rocket Mortgage, the nation’s largest overall lender and the very first participant in the pilot, said the examination process was an “overwhelming” and “exhausting” experience.

Smaller nonbanks don’t have the economies of scale to monitor how the CFPB might deviate from state interpretations of federal consumer mortgage rules and regulations, the Community Home Lenders Association said in a letter to the CFPB.