Lawmakers Caution CFPB Closure Could Upend Benchmark Mortgage Rates

Lawmakers are warning that efforts to close or significantly curtail the Consumer Financial Protection Bureau (CFPB) could disrupt a key benchmark used to set mortgage rates, potentially raising borrowing costs and limiting access to home loans for many borrowers.​

What lawmakers are warning about

Four Democratic senators — Elizabeth Warren, Raphael Warnock, Ruben Gallego and Andy Kim — sent a letter to acting CFPB director Russell Vought cautioning that furloughing staff or shuttering the bureau could interrupt publication of the Average Prime Offer Rate (APOR). They argue that without regular APOR data, lenders and investors would face greater legal and pricing uncertainty, which could feed directly into higher mortgage rates and tighter credit standards.​

Why APOR matters for mortgages

The CFPB publishes APOR tables weekly, and lenders use them to determine whether a mortgage qualifies as a “qualified mortgage” (QM) and whether it is considered a “higher‑priced mortgage loan.” If a loan’s annual percentage rate is too far above APOR, it triggers extra compliance requirements and potential legal exposure, so APOR effectively acts as a benchmark for safe pricing and risk.​

Potential impact if CFPB shuts down

Lawmakers say that if CFPB stops publishing APOR, lenders might either pull back from serving lower‑income or higher‑risk borrowers or raise interest rates broadly to compensate for the added legal and market risk. They warn this could skew the cost of homeownership upward, reduce credit availability, and unsettle the secondary market where mortgages are bought and sold, with knock‑on effects for the broader housing market.​

CFPB’s proposed workaround

Reports indicate CFPB officials have suggested they could provide lenders with a methodology to replicate APOR using publicly available data and signal that using this alternative method would not expose firms to enforcement actions. Critics, including Senator Warren, have called this a “half‑baked” substitute, arguing it may not offer the same clarity and legal certainty as official APOR tables, leaving room for continued disruption in benchmark mortgage pricing.​