July 18, 2012
WASHINGTON, DC – On Saturday, July 21, the Consumer Financial Protection Bureau (CFPB) marks its one year anniversary. The consumer financial watchdog, led by Director Richard Cordray, has worked to put a stop to unfair practices – from shady mortgages to dubious credit-card offers to student-loan debt traps – that too often leave consumers blindsided by fine print and confusing products.
“Before the Consumer Financial Protection Bureau, we didn’t have a watchdog to help protect people from deceptive and predatory practices run amuck. Now consumers know that they have the CFPB looking out for their financial interests,” said Pamela Banks, senior policy counsel for Consumers Union, the policy and advocacy division of Consumer Reports. “Thanks to the steps the CFPB has taken in its first year, consumers have a better shot at getting a fair deal instead of winding up with a financial nightmare.”
For years, Consumers Union pressed the federal government to create a watchdog like the CFPB to guard against financial rip-offs and help protect consumers from unscrupulous financial firms.
Consumers Union praised the CFPB for important first-year initiatives such as:
Consumer Complaint Database: The CFPB’s consumer complaints program helps consumers resolve complaints about unfair and abusive financial practices, products and services – like mortgages, loans and bank products.
Clearer Credit Cards: To help consumers decide which credit card is best for them, the CFPB developed a simplified, plain language credit card agreement that spells out essential terms of a credit card offering.
Simplified Mortgages: In its effort to make mortgage forms more transparent for consumers, the CFPB is simplifying, reducing the volume and improving the disclosures forms for mortgage transactions. The CFPB is also taking a closer look at reverse mortgages, a complex and costly borrowing option for homeowners aged 62 years and older.
Student Loans: The CFPB teamed with the Department of Education to launch a “Know Before You Owe” campaign to help students understand and compare the cost and risks associated with student loans.
Reining in Credit Bureaus: One error on a credit report can have a huge impact across a consumer’s financial identity. The CFPB is taking a tough look at the largest credit bureaus to make sure what they are reporting is accurate and mistakes are fixed quickly.
The CFPB was created by the Wall Street reform law passed by Congress in 2010 to make sure financial companies provide consumers with the information they need to understand the true costs and risks of different financial products. It has been charged with identifying and stopping unfair, deceptive, and abusive financial practices and keeping the rules governing financial service products up-to-date.