The Consumer Financial Protection Bureau (CFPB) released its Semi-Annual Report highlighting the bureau’s work in the first half of 2012. One year ago, the CFPB became the nation’s first federal agency solely focused on protecting Americans in the consumer financial products and services marketplace.
“Consumers deserve to be treated fairly, and to have someone stand on their side when they are not,” said CFPB Director Richard Cordray. “The CFPB has used the tools at our disposal for the benefit of consumers in the past year, and we pledge to continue to do so as we work to promote a transparent, fair, and competitive consumer financial marketplace.”
The Dodd-Frank Wall Street Reform and Consumer Protection Act created the CFPB not only to protect consumers but also to help provide consistent enforcement of federal consumer financial laws. The report covers the Bureau’s actions from Jan. 1, 2012 through June 30, 2012. It showcases how the Bureau has used its multiple authorities, including regulation, supervision, enforcement, market research, financial education, and the authority to deal directly with consumer complaints regarding consumer financial products and services. The following are some of the highlights of the bureau’s activities since Jan. 1, 2012, including accomplishments that are addressed in the report, as well as significant achievements since July 1, 2012.
- Consumer Engagement: The CFPB has developed many ways to engage with and help consumers. The bureau has held numerous field hearings across the country, inviting consumers to share their experiences and opinions on financial products and services such as credit reporting, payday loans, and prepaid cards. On the CFPB website, a feature called “Tell Your Story” encourages consumers to share their experiences to help inform the bureau’s agenda. And, perhaps most significantly, the CFPB helps resolve consumer disputes with lenders by taking complaints through its website and by telephone, mail, fax, and by referral from other agencies. Between July 21, 2011 and June 30, 2012, consumers submitted approximately 55,300 complaints about credit cards, mortgages, and other financial products and services.
- Financial Education: Through innovative technology and education, the CFPB has developed tools designed to empower consumers to make responsible financial decisions. With its Know Before You Owe campaign, the CFPB is working to make mortgages, credit cards, and student loans easier to understand. The Bureau also developed AskCFPB, an interactive online database answering questions frequently asked by consumers. And, the CFPB made available to the public a database of the individual complaints it has received about financial products. Consumers can review and analyze the complaints and draw their own conclusions.
- Regulation: The CFPB has used its regulatory authority to start fulfilling Congress’s mandate to reform the mortgage market. The CFPB is writing rules to help consumers make informed decisions when shopping for a mortgage; simplify mortgage disclosure forms so consumers know what they are getting and are not shocked at the closing table; and bring greater transparency and accountability to mortgage servicing.
- Research: The CFPB is a 21st century, data-driven agency. This means the CFPB gathered information to better understand the markets for consumer financial products and services. The CFPB did this by conducting in-depth studies on consumer financial products, such as reverse mortgages and private student loans. The CFPB has also issued Requests for Information to gather information from consumers, industry, and other stakeholders for issues such as overdraft fees, prepaid cards, and the financial exploitation of seniors.
- Supervision: The bureau assumed authority to supervise larger banks and credit unions and their affiliates in July 2011. In January 2012, the CFPB launched its supervisory program for certain nonbanks. Many of these nonbanks had never before been federally supervised. Among those that the CFPB now has supervision authority over are residential mortgage companies (mortgage originators, brokers, and servicers, and providers of loan modification or foreclosure relief services); payday lenders; and private education lenders. The CFPB also has the authority to supervise nonbank “larger participants” as defined by rule. So far, the CFPB has added credit reporting companies and certain other consumer reporting companies to this category. The bureau uses both its bank and nonbank supervision teams to make sure all of these supervised entities are complying with federal consumer financial protection laws.
- Enforcement: When a business has not been complying with federal consumer financial protection laws, the CFPB does not hesitate to take action. Working with other parts of the CFPB, including supervision and those who monitor consumer complaints, enforcement staff investigates potential violations of the law. A recent example of the CFPB’s work: After routine supervision of Capital One revealed potential problems, the Bureau launched an investigation that ultimately led to enforcement action against the credit card issuer. Although the enforcement action is not included in the timeframe of the semi-annual report, it secured about $140 million for consumers who were wronged by the company.
The CFPB has worked on all of these projects while engaged in its start-up activities such as creating the Consumer Response Center, building an interactive and educational website, and hiring economists, industry experts, and regulations experts. The bureau has worked to build an infrastructure that promotes transparency, accountability, fairness, and service to the public.