The Consumer Financial Protection Bureau (CFPB) is blowing out the candles on its third birthday cake today, and I hope their hard-working staff is taking a moment to celebrate a job well done. They’ve made substantial progress towards their mission of “making financial markets work for American consumers — whether they’re applying for a mortgage, borrowing for college, choosing a credit card, or using any number of other consumer financial products.”
The CFPB was established by the Dodd-Frank Wall Street Reform and Consumer Protection Act as the first federal financial regulator whose focus is protecting the rights of consumers.
No matter who you are—a credit card borrower, student borrower, homeowner, servicemember, or more—the CFPB is making major strides to ensure that you can safely do business with financial institutions.
What, exactly, has the CFPB done in its first three years?
- Pursued justice for credit card borrowers. The CFPB ordered five of the six biggest credit card companies to return $1.5 billion to consumers who were sold expensive add-on products, such as identity theft and credit protection programs, that provided little or no benefit.
- Protected students from predatory practices. The CFPB filed an enforcement action against ITT Educational Services, one of the country’s largest for-profit college chains, for allegedly steering students into high-interest private student loans.
- Promoted affordable mortgages and protected new and struggling homeowners. New mortgage market rules took effect in January that created a safer mortgage market. The rules require lenders to ensure that borrowers can afford to repay the loans, incentivize lenders to make less risky loans, protect borrowers against fair lending abuses, expand protections for borrowers who are struggling to repay their loans, and more.
- Helped consumers who had bad experiences with financial institutions. The CFPB created a system for receiving, pursuing, and publishing consumer complaints about financial institutions. According to the latest update about consumer complaints, the CFPB has received nearly 400,000 complaints on credit cards, mortgages, bank accounts, private student loans, payday loans, and more. The CFPB announced yesterday that they are now receiving complaints on prepaid cards, debt settlement and credit repair products, and pawn and title loans as well. The complaint system helps consumers access relief when wronged by their institution, as well as helps the CFPB and advocates detect trends. The CFPB is proposing to allow people who submit complaints to make them public, which would provide a fuller picture of the kinds of issues consumers are facing. Let them know that you support the proposal.
- Took action against payday lenders who exploited servicemembers. The CFPB required Cash America, one of the largest small-dollar lenders in the country, to pay $14 million to servicemembers for illegally overcharging them in violation of the Military Lending Act. The Office of Servicemember Affairs is charged with monitoring consumer protection risks to servicemembers.
The CFPB’s policy victories translate into real-life improvements for consumers. The CFPB collected stories from consumers it helped, like a servicemember who had orders to relocate and could not sell his underwater home:
Or Venida, who had an erroneous $7,000 charge on her credit report:
Please join me and the rest of the Woodstock staff in wishing the CFPB the best on its third birthday. We look forward to the progress it will make on creating a safer financial market for consumers in the years to come.