As the Consumer Financial Protection Bureau (CFPB) turns 11 years old, we are highlighting 11 ways it has returned to its mission since Rohit Chopra was confirmed as its new director by the Senate last fall.
As a reminder, the CFPB opened its doors on July 21, 2011, one year after President Barack Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. Typically referred to as “Dodd-Frank” or “Wall Street Reform,” this law created the CFPB in the aftermath of the 2008 economic crash caused, in large part, by the financial industry’s malfeasance. The CFPB became the United States’ first federal agency dedicated to protecting consumers from financial shenanigans.
As of last year the CFPB had recouped more than $14 billion for consumers, enforced consumer protection laws against nearly 300 companies and processed more than 3 million consumer complaints against financial companies. (You can submit your own complaint here.)
After three years of the Trump Administration limiting the CFPB’s effectiveness, Acting Director Dave Uejio started getting the bureau back on track. Then, Director Chopra took over in October, and the CFPB is protecting consumers better than ever before:
Drawing attention to predatory overdraft fees
The CFPB published research in December showing that the financial sector overrelies on overdraft fees and non-sufficient funds (NSF) revenue, which reached an estimated $15.47 billion in 2019. Ironically, one of America’s 15 largest banks, Capital One, announced a week prior that it would eliminate all overdraft and NSF fees.
Some other banks also made changes to their overdraft practices after the CFPB published its research. (However, many banks have still made it common practice to charge about $35 for overdraft fees, sometimes 3-6 times in a single day, which is why we also joined Rep. Maloney and Sens. Booker and Warren to urge Congressional action as well.)
Paving the way for changes to medical debt reporting
The CFPB’s medical debt report published in March found that at least $88 billion of medical debt sits on consumer credit reports, squashing their hopes and dreams.
A few weeks later Equifax, Experian and TransUnion, the three major credit bureaus, announced they are changing how they will treat the reporting of medical debt:
As of July 1, paid medical debt will be erased from credit reports
New medical debt won’t be included in credit reports until a year after the debt is given over to collection agencies, rather than the current six months.
Beginning in 2023, credit reports will not include medical debt of less than $500
(We released a tip sheet on how to make sure your credit reports don’t include paid medical debt.)
Launching an initiative to save Americans billions of dollars in junk fees
The CFPB sought public input for a new initiative launched in January to save Americans from junk fees associated with their bank, credit union, prepaid or credit card account, mortgage, loan or payment transfers that are unexpected, unclear or too high.
Launching an initiative to improve customer service at the big banks
The CFPB also sought public input for another new initiative, launched last month, to ensure basic customer services. As Director Chopra put it, “Customers of large banks should not have to run through an obstacle course to get a straight answer about their account.”
Slamming the Big 3 credit bureaus for excuses, “deficiencies” and failures
The CFPB sent a warning message to the national credit bureaus for failing to handle consumer complaints about credit reporting mistakes. As we have noted for years with our reports about the CFPB’s complaint database, the biggest problems faced by consumers in the financial marketplace include mistakes on their credit reports and failure by the credit bureaus to fix those errors.
Highlighting the particular medical billing, credit reporting and debt collection harms to military families
The CFPB released its annual report in June on top financial concerns facing servicemembers, veterans and military families. As the CFPB put it, “servicemembers may be at particular risk from harm caused by coercive credit reporting tactics, given that negative items on a credit report can jeopardize a military career.”
Examining for-profit colleges
The CFPB announced in January it would begin examining for-profit colleges and other post-secondary schools for potential harms, such as withholding transcripts and failing to provide refunds.
Looking at the impact of Big Tech’s entry into the payments space
As part of Director Chopra’s focus on ensuring competition in the marketplace, the CFPB asked BigTech giants, including Amazon, Apple, Facebook, Google, PayPal and Square, to answer questions about their payment system practices. The CFPB has also asked consumers, small businesses and others for comments.
Taking action to protect the deposit insurance guarantee
In May the CFPB and the FDIC took action to “root out misrepresentation” of the FDIC logo by firms hoping that consumers will invest in their risky cryptocurrencies or other products that are not FDIC-insured bank deposits.
Making it easier for consumers to directly request regulatory changes
In February the CFPB set up a clear process for average consumers to petition the agency for rulemaking. Some people know they can comment on rules that federal agencies have proposed before they are finalized. But unless you’re a lobbyist, you probably didn’t know you also have the right to recommend what rules agencies should work on in the first place. Or that you can make recommendations to change or even repeal existing rules. The CFPB’s new initiative is yet another way it is showing what government on your side can look like.
Conceding it created and operated a Trump-era taskforce in violation of federal transparency law
In November U.S. PIRG, along with DemocracyForward.org, the National Association of Consumer Advocates and Professor Kathleen Engel, won a favorable settlement in our lawsuit over a task force convened by former CFPB Director Kathy Kraninger.
The CFPB under Director Chopra acknowledged that its Taskforce on Federal Consumer Financial Law was “created and operated in violation of FACA [the Federal Advisory Committee Act].” The Taskforce, while ostensibly established to “modernize” consumer finance laws and regulations, excluded consumer protection experts and ran roughshod over FACA requirements, which are designed to ensure advisory committees serve the public interest.
Photo of CFPB Director Chopra, credit to CFPB
Director, Consumer Campaign, PIRG
Mike directs U.S. PIRG’s national campaign to protect consumers on Wall Street and in the financial marketplace by defending the Consumer Financial Protection Bureau, and works for stronger privacy protections and corporate accountability in the wake of the Equifax data breach. Mike lives in Washington, D.C.