CFPB: Definition, Role, Resources

  • The CFPB is a federal regulatory agency dedicated to ensuring that consumer financial markets work for everyone.
  • The CFPB handles consumer complaints about financial companies and products.
  • The CFPB has a robust library of materials to help you make better financial decisions.
  • Read more Personal Finance Insider stories.

If you’ve ever felt frustrated dealing with a financial services company that doesn’t seem sympathetic to your situation, the Consumer Financial Protection Bureau, or CFPB, can help.

The CFPB is an agency charged with implementing and enforcing federal consumer financial regulations and ensuring that markets for consumer financial products are fair, transparent, and competitive. It was established by Congress under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Created in the wake of the 2007-2008 subprime mortgage crisis, the CFPB is designed to be a central agency that enables better enforcement of laws and regulations, specifically how financial laws affect consumers. This means that you can file financial complaints directly with the CFPB and will not be turned around, where you previously might have been directed to any of several other agencies.

How does the CFPB protect consumers?

The CFPB aims to promote the fairness and transparency of consumer financial products, such as mortgages, credit and other loans or services. The rules established by the CFPB allow financial companies to compete for a consumer’s business on equal terms. These rules also allow a consumer to clearly see the terms and conditions of the product or service he is ordering, which makes it much easier to compare prices.

The CFPB is structured as an independent office within the Federal Reserve. It was created as a Dodd-Frank Act measure to implement and enforce federal law for consumer financial products and services. The Dodd-Frank Act also gave the CFPB expanded powers to provide fair and transparent information to help consumers make the best financial decisions.

Prior to the establishment of the CFPB, the authority to enforce consumer financial protection laws and regulations was distributed among seven different federal agencies. The CFPB consolidated that power into a single organization to increase accountability in government. The organization’s primary purpose is to help make financial markets work for everyone.

The CFPB takes enforcement action against individuals or organizations that it believes have violated the law. According to the CFPB, enforcement is accomplished by “filing an action in a federal district court or by initiating an administrative adjudication proceeding.”

What resources does the CFPB provide to consumers?

The main resources that the CFPB makes available to consumers include:

  • Online financial educational materials for consumers
  • Expert help with questions consumers have
  • Filing complaints about problems consumers have with financial products or services

online education materials

“The CFPB provides a wealth of information for consumers, including easy-to-understand articles and videos on how to make smart financial decisions,” says Ross Gloudeman, General Counsel and Chief Compliance Officer of CFPB. GRC azimuth. “The site also shares helpful tips and information for those experiencing financial difficulties or who feel their financial needs are not being met by their bank or lender.”

Consumers can find information about the CFPB website on money topics in the form of articles, videos, explanations, roadmaps and more. These are topics like:

  • car loans
  • bank accounts and services
  • Credit cards
  • Credit reports and scores
  • debt collection
  • Fraud and scams
  • Money transfers
  • mortgages
  • payday loans
  • prepaid cards
  • reverse mortgages
  • student loans

expert help

The CFPB can help answer many financial questions you may have. You may be able to find answers to common questions. online. Help is also available by phone in more than 180 languages. The number is 1-855-411-2372.

The CFPB can also direct you to other expert resources. If you’re looking to buy a home, for example, the CFPB can direct you to HUD Housing Counselors across the US

Presentation of complaints

The CFPB says it handles more than 10,000 complaints about financial products and services a week. Consumer complaints help the CFPB better monitor financial companies, enforce federal financial laws, and ultimately write better rules and regulations.

What role does the CFPB play in the real estate sector?

Since the CFPB was established as a result of the financial crisis created in large part as a result of fraudulent and abusive mortgage lending practices, the CFPB plays a central role in rules regarding mortgage loans and service

The CFPB is active in making and adjusting the rules as needed. An example includes an amendment to the Real Estate Settlement and Procedures Act (RESPA), Regulation X to protect borrowers affected by the COVID-19 emergency. This amendment would allow servicers to make loan modifications for borrowers affected by a COVID-19 hardship and pause foreclosure proceedings.

Another example of a rule created by the CFPB is the “Know Before You Owe” mortgage initiative. This initiative reduced the number of mortgage disclosure forms provided by lenders to two from four. The idea was to make it easier for consumers to understand their loan options, especially when shopping for a mortgage. It also helps them avoid costly surprises at the closing table.

How can the CFPB help me?

When consumers have problems with financial companies that they can’t resolve on their own, a CFPB complaint can help. This is an example of what can happen with a medical billing complaint.

“When a consumer files a complaint with the CFPB, they will contact the business to try to resolve the complaint and get more information about how the consumer was affected,” explains Annette Harris, owner of Harris Financial Advice.

“The CFPB helps consumers resolve medical debt problems reported to the credit bureaus,” says Harris. “Medical billing is very complex and working with insurance companies and medical facilities to resolve issues can cause payment delays.

“While consumers are trying to resolve some of these issues, medical facilities are reporting medical debt to credit bureaus as unpaid, and this can negatively affect a consumer’s credit score. If the consumer is unable to work with provider to resolve the problem, you can file a complaint with the CFPB.

How do I file a complaint with the CFPB?

You can file a complaint with the CFPB online or by phone at 1-855-411-CFPB (2372).

The CFPB accepts complaints about financial products or services, and you will be asked which of the following categories you fall into.

  • debt collection
  • Credit reports, credit repair services, or other personal consumer reports
  • Mortgage
  • Credit card or prepaid card
  • Checking or savings account
  • Vehicle loan or lease
  • Student loan
  • Payday loan, title loan or personal loan
  • Money transfer, virtual currency or money service

Effective complaints are clear and concise. It should include details about:

  • What happened, including key dates, amounts, and communication you’ve had with the company.
  • How have you tried to solve the problem with the company?
  • What do you think would be a fair resolution.
  • Documentation

After you file a complaint, you can check the status in which you filed the complaint online or by phone. You will also receive email updates from the CFPB on what is happening with your case, the next steps, and how the company is responding to your complaint. Most companies respond within 15 days.

Criticism of the CFPB

One of the criticisms of the CFPB has been that the agency itself does not have enough oversight. The CFPB is financed through the

Federal Reserve

rather than Congress, allowing the office to operate outside of congressional oversight.

An example of this is how the CFPB can issue rules for financial institutions. The CFPB was given authority under the Dodd-Frank Act to issue new rules or declare certain practices associated with consumer financial products or services illegal if they are deceptive, unfair, or abusive. These rules can be made without input from Congress, which some members have objected to, given that it is the constitutional legislative body of the US.

On the other hand, some have also argued that this amount of independence can help the office operate more effectively by insulating it from political pressure.

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