26 Apr Consumer Financial Protection Bureau: Everything You Need to Know
The Consumer Financial Protection Bureau (CFPB) is a relatively new federal agency that, as its name suggests, watches out for consumers when it comes to financial products.
Financial products are things like bank accounts, mortgages, credit cards, student loans, and car loans. The CFPB works to protect consumers when using products, and prevent issues such as illegal debt collection, unfair lending, misleading products, and hidden fees.
How did the CFPB start?
The Consumer Financial Protection Bureau was created by Congress as part of the Dodd-Frank Act of 2010. The Dodd-Frank Act was passed in response to the 2008 financial crisis and changed the way that the federal government regulates financial services companies.
The CFPB was actually first proposed by then Harvard Law School Professor Elizabeth Warren. Warren called for an independent agency to protect consumers of financial products, just like the Consumer Product Safety Commission (CPSC) protects consumers of physical products.
You may not have thought that credit cards and mortgages are products like toasters and washing machines. But, just as the government should prevent a store from selling you a faulty toaster that may burn down your family’s house, it should prevent a bank from making you an unfair loan that may destroy your family’s finances.
What does the Consumer Financial Protection Bureau do?
The CFPB carries out this work through three main divisions:
- Consumer Education and External Affairs Division: creates educational resources to teach consumers about personal finance and help them make better financial decisions. Resources include information on:
- reverse mortgage loans
- debt collection issues
- how to avoid fraud and scams
- Supervision, Enforcement, and Fair Lending Division: ensures financial services companies follow relevant federal laws, including taking legal action when necessary.
- For example, in January the CFPB sued United Holding Group and its affiliates for allegedly using false threats and false statements to collect debt from consumers.
- Sometimes the CFPB’s legal actions result in companies paying harmed consumers or canceling their debts. As of 2020, the CFPB has obtained $12.9 billion in relief for consumers.
- Research, Markets, and Regulations Division: publishes research reports, studies the market for consumer financial products, and writes the CFPB’s rules.
How can the CFPB help you?
The Consumer Financial Protection Bureau can help you with individual problems you might have with a bank or other financial services companies, like a student loan lender.
If you have a specific issue and are struggling to get the company to respond, you can submit a complaint to the CFPB here.
The CFPB will review your complaint and forward it to the company. According to the CFPB, companies generally respond within 15 days of receiving a complaint.
By submitting a complaint, you are also helping the agency better understand the issues that average consumers are facing. The Consumer Financial Protection Bureau will anonymously publish information about your complaint to its public Consumer Complaint Database. It uses this database to inform its strategy on taking legal action against companies and writing new rules and regulations.
For more information about dealing with creditors and managing finances, visit TriageCancer.org/Financial.
About Triage Cancer
Triage Cancer is a national, nonprofit providing free education to people diagnosed with cancer, caregivers, and health care professionals on cancer-related legal and practical issues. Through events, materials, and resources, Triage Cancer is dedicated to helping people move beyond diagnosis.
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