So what does BB&T’s decision to ditch its flat-fee compensation plan mean in terms of compliance? That’s the question on everyone’s mind, it seems, especially since BB&T was one of the first to make the switch to flats three years ago — about two years after the Consumer Financial Protection Bureau (CFPB) issued its March 2013 guidance on dealer participation.

What drew attention to the move was the bank made the switch back to rate markups a week after acting CFPB Director Mick Mulvaney stripped the division that led the bureau’s dealer participation examinations of its enforcement powers, and about a week before Mulvaney released the bureau’s five-year strategic plan.

"And you can bet they’re ready for that role. In fact, I wrote on this page back in November that Pennsylvania Attorney General Josh Shapiro is creating a mini-CFPB that will be headed by former bureau enforcement attorney Nick Smyth. Shapiro was in the room during Mulvaney’s NAAG address."

The 16-page plan confirms the regulator’s shift away from enforcement. It also talks about “efforts to improve the supervision, examination and enforcement activities” of the bureau’s Supervision, Examination, and Fair Lending Division — the one Mulvaney defanged last month. One of those efforts includes piloting a project “to supplement the traditional examination process.”

I took that to mean the bureau won’t be overly focused on rate markups. Yeah, Mulvaney is definitely making his mark.

Since his appointment in November, the acting director has called for a review of the payday lending rules the bureau finalized last year, called off a four-year investigation into a South Carolina-based subprime lender, dropped a lawsuit against a group of four online payday lenders, and initiated an examination of the bureau’s policies and practices.

Then there was his appearance last month at the National Association of Attorneys General (NAAG)’s 2018 Winter Meeting in Washington, D.C. “There’s no more regulation by enforcement,” Mulvaney said. “We’re going to try to let the industry especially know what the rules are before we accuse them of breaking those rules.

“Lastly, and I just met with a lot of your state banking regulators a couple of weeks ago, we’re going to be relying on you folks a lot more,” he continued. “We’re going to be looking to the state regulators and state attorneys general for leadership when it comes to enforcement.”

And you can bet they’re ready for that role. In fact, I wrote on this page back in November that Pennsylvania Attorney General Josh Shapiro is creating a mini-CFPB that will be headed by former bureau enforcement attorney Nick Smyth. Shapiro was in the room during Mulvaney’s NAAG address. He asked the acting director for his view on the Dodd-Frank Act authorizing attorneys general to pursue civil actions in federal court for violations of the law’s prohibition on unfair, deceptive, or abusive acts or practices.

“We’re not there to get in the way,” Mulvaney responded.

Maryland, by the way, has also formed a new Financial Consumer Protection Commission to assess the potential impact of changes to Dodd-Frank and other federal laws Republican lawmakers are pushing. Maryland Attorney General Brian Frosh and Shapiro joined 19 other attorneys general in issuing a letter last July urging U.S. Senate leaders to support the bureau’s rule banning mandatory pre-dispute arbitration when the Republican-controlled Congress challenged — and eventually repealed — the rule under the Congressional Review Act.

I’m betting those 21 state regulators are ready to take up the CFPB’s torch. And when they do, they’ll have plenty of auto-related data to sift through.

There’s the 2016 Consumer Complaint Survey Report issued by the Consumer Federation of America and the North American Consumer Protection Investigators. Not only was auto No. 1 in the report’s “Top 10 Consumer Complaints Received” list — for the second year in a row — the automotive section opens with three paragraphs on consumer complaints about canceling “costly add-ons.”

And don’t forget the National Consumer Law Center’s “Auto Add-Ons Adds Up” report, which called on lawmakers and state and federal regulators to investigate how dealers price F&I products.

By the way, the CFPB isn’t the only federal regulator that can make life tough on the auto finance industry and the F&I office. There’s the Office of the Comptroller of the Currency, the Federal Deposit Insurance Corp., the Federal Reserve Bank, the National Credit Union Administration, the Department of Justice, and the Federal Trade Commission.

Still, it is interesting to see how things are playing out at the CFPB under Mulvaney. In fact, September should be really telling. That’s when the 2015 consent order the CFPB entered into with Fifth Third Bank is set to expire. The question is, will the bank eliminate the 1.25% and 1% markup caps it agreed to?

Bank representatives didn’t respond to a request for comment. Neither did representatives for Toyota Motor Credit Corp. and American Honda Finance Corp., whose consent orders with the CFPB are set to expire in February 2019 and July 2020, respectively. They also agreed to cap markups at 1.25% and 1%.

For whatever reason, that famed John Wooden quote comes to mind whenever I’m asked about my compliance outlook: “The truest test of a man’s character is what he does when no one is watching.” I know the character of this industry, but maybe we need to use this climate of deregulation to reaffirm it with regulators.