One intrinsic element of the recently-passed Dodd-Frank Financial Reform Act is the Consumer Financial Protection Bureau, which opened for business on July 21. It seems that only about 20% of the public has any grasp of what the CFPB has been designed to do, or has even heard of it in the first place. According to treasury.gov, “CFPB will work to promote fairness and transparency for mortgages, credit cards, and other consumer financial products and services.” On consumerfinance.gov, “supervision” is cited as the Bureau’s most important task.
Congressional Republicans expressed their displeasure by voting the Consumer Financial Protection Safety and Soundness Improvement Act through the House, with the intention of limiting the Bureau’s potential to issue regulations that “could interfere with the safe operation of U.S. financial markets.” Most Democrats oppose this act, claiming that it would serve to undermine the CFPB by shifting more of the power towards banking regulators. Wall Street, overall, is nervous about the newly-formed CFPB, as President Obama nominated former Ohio Attorney General Richard Cordray to head the Bureau. If confirmed, Cordray is expected to take a firm stance when it comes to regulating Wall Street.
In addition to overseeing the 110 largest banks across the country, CFPB also has the ability to scrutinize the less-regulated pockets of the finance industry, some of which include mortgage companies and payday lenders, numbering somewhere in the tens of thousands.
The New York Times reported that Moody’s, a globally significant credit rating agency, believes that the CFPB will have a positive effect on the financial industry. They referred to the CFPB as “medicine” for American banks and predict that “the stricter policing of consumer lending products and services will ultimately make banks safer by steering them away from riskier products such as subprime mortgages.”
For those looking to file complaints online, the CFPB’s website features an easy-to-navigate section that requests information from the user such as their name, contact information, and a description of the problem. There are pull-down menus available to supplement the details provided, along with an area in which the user can explain what they’d like to see as the resolution. According to the website, the complaint is then shared with the relevant credit card company by the agency.