For the first time, a federal financial agency has placed consumers at the center of its work. That agency, the Consumer Financial Protection Bureau (CFPB), turns one year old on July 21, 2012.
The CFPB, established as a centerpiece of the Wall Street Reform and Consumer Protection Act of 2010, is the first federal financial agency with only one job: protecting consumers. It has special responsibilities to protect seniors, military servicemembers and students. The CFPB is also tasked with ensuring fair lending and promoting financial education and literacy. The CFPB protects you no matter where you buy financial products—at a bank, at a credit union, at a mortgage company or a payday lender.
Here are 5 things that the CFPB has done already to make the financial marketplace safer and more competitive for consumers and for fair-dealing firms:
1) Th CFPB has established a working complaint handling system that is already getting results for consumers with complaints about mortgages, student loans, bank accounts, car loans and credit cards. The credit card complaint system is the first to be added to a new publicly-available complaint database so consumers can not only have their complaints investigated but can also compare firms based on complaints. Consumers can find out how many complaints each company has against it, what kinds of complaints, and their record on resolving them to help inform their decisions about where to get a card. Soon, this searchable database will add mortgage, overdraft, debit card, payday loan and other consumer complaints.
FACT: The CFPB complaint database is part of the best federal government agency website ever. Consumerfinance.gov also includes “ask CFPB a question” and “tell CFPB a story” features. Check it out.
2) The CFPB has completed a remittance rule, making it safer for consumers sending money to their families in other countries.
3) The CFPB has completed a rule giving it the full authority to investigate and examine the largest credit bureaus and look inside their mysterious “black box” operations. No one has ever had this authority before. Credit bureaus — and their credit reports and the credit scores derived from reports — act as powerful gatekeepers to whether and how much you will pay to get credit, insurance, a bank account or a place to live. Increasingly, credit reports are being used to decide whether you can even get a job. Credit bureau mistakes and their failure to fix them quickly and permanently affect millions and millions of Americans every year, and harm peoples’ economic opportunity and mobility. Now the CFPB will be able to take on these problems.
FACT: The CFPB is completing a similar rule allowing it to fully regulate the largest debt collectors, whose unfair practices usually lead the Top Ten Complaint lists at both the Federal Trade Commission and state attorneys general offices.
4) The CFPB has helped students with their own “Know Before You Owe” loan tool, proposed simpler, shorter, easier to understand model consolidated mortgage documents that make it easier for homebuyers to compare costs and conducted research and issued a report to Congress on reverse mortgages while also giving seniors a guide to reverse mortgage tricks and traps.
5) The CFPB has protected veterans and other students from high-cost for-profit schools that have made false promises of employment opportunities and otherwise violated laws through an ongoing investigation of “whether for-profit postsecondary companies […] have engaged or are engaging in unlawful acts.” The CFPB Office of Servicemember Affairs, along with with state Attorneys General and the Department of Defense, has also created the Repeat Offenders Against Military Database (ROAM) to track companies and individuals who repeatedly target the military community with financial scams, and they have stepped up mortgage and servicing protections for service members who facing problems with their loans because they are required to move.
And 5 More Projects that the CFPB has already begun and needs to continue:
1) The CFPB is investigating mandatory arbitration, which has prevented consumers from obtaining justice when unfair practices harm them. After it completes this study, CFPB gains authority to ban or regulate arbitration. By preventing consumers from taking their legitimate problems with companies to the courts, forced arbitration allows bad behavior to fester in the marketplace. Why should a company change shoddy practices if customers have no way to hold them accountable when the break the law? The CFPBs investigation is a first key step towards making sure financial companies have to actually follow the law when they deal with consumers.
2) The CFPB is preparing important mortgage servicing reforms so that companies’ responsibilities to borrowers are clear. The firms will no longer be able to drag their feet, refuse to act on mortgage modification requests, refuse to provide information or otherwise act without legal authority.
3) The CFPB is working on an ability to pay rule (QM) and other mortgage reforms so that shady lenders won’t be able to push out unaffordable, unsustainable, unfair mortgages.
4) The CFPB is completing an investigation into unfair overdraft practices that should lead to a ban on banks changing the order of your transactions to collect more overdraft fees, new restrictions on the misleading marketing of so-called “standard overdraft protection” (it’s actually the worst choice for most consumers) and other changes to deter banks from wrongly encouraging consumers to overdraft their accounts. Consumer groups have urged CFPB to ban overdraft fees for debit card purchases and ATM withdrawals, urged use of reasonable and proportional penalty fees and urged full coverage under the Truth in Lending Act so banks can’t grab your next paycheck or benefits check to repay the loans to them.
5) For the first time, a federal agency has full supervisory authority over high-cost non-bank payday lenders. The CFPB issued an examination manual and has started inspections, held a field hearing, and collected public comments on payday loan issues. For bank payday loans (often called Direct Deposit Loans), the CFPB also has authority to supervise and examine the largest banks that offer this product for compliance with federal credit protections. Payday lenders are so worried they are already pushing legislation trying to escape from CFPB authority, as well as the authority of states that prohibit or sharply limit payday lending.
These Are 10 of Many Reasons We Need the CFPB!
CFPB is the only U.S. financial regulator with one job: protecting consumers.
On the web at consumerfinance.gov or cfpb.gov
CFPB’s phone number for consumer complaints
(855) 411-CFPB (2372) In English or Español