Our culture has long celebrated the symbols of affluence. Houses, vacations, the ability to shop for the best items, and eat plenty of the most delicious foods. It’s hard not to become engulfed in the desire to have material possessions because we are immersed in the narratives of those that have them. While there are plenty of “rags to riches” stories focusing on working hard to get ahead, patience isn’t always easy to exhibit for many of us and unfortunately that’s where the seeds were planted that made activities like predatory lending and other questionable financial practices take hold. These practices are largely responsible for the Financial Crisis of 2007–08, one of the worse since the Great Depression. The Financial Crisis led to the collapse of businesses, the profound adjustments of industries, and left millions of people in financial ruin.
In an effort to protect beleaguered consumers, the federal government created the Consumer Financial Protection Bureau (CFPB). CFPB’s primary purpose is to protect consumers and serve as a regulatory force in the financial services industry. They are charged with the task of governing a wide range of financial institution types, including banks, credit unions, mortgage servicing companies and debt collection agencies.
The broad range of organization types for which CFPB has enforcement power over comes from the number of regulatory agency responsibilities they are meant to consolidate. CFPB takes on regulatory responsibilities once belonging to the Federal Reserve, the Federal Deposit Insurance Corporation, the Department of Housing and Urban Development, the Federal Trade Commission and the National Credit Union Administration.
The CFPB that we see today, originates from an idea conceived by Harvard Law School professor and U.S. senator Elizabeth Warren, who described an agency specifically designed to protect the interest of consumers when dealing with financial organizations. Congress’ passing of the Dodd–Frank Wall Street Reform and Consumer Protection Act in July 2010 paved the way for the formation of CFPB. Dodd-Frank was created to bring sweeping regulatory reform to the financial industry and CFPB was created to be the driving force for that reform.
CFPB engages in a number of activities designed to serve its mission to enforce federal consumer financial law, ensure that consumer financial products and services are “fair, transparent and competitive”, to protect consumers and ensure that consumers “are provided with timely and understandable information to make responsible decisions about financial transactions.” These activities include:
- Conducting financial education programs
- Collecting, investigating and responding to consumer complaints;
- Collecting, researching, monitoring and publishing information that is pertinent to the motioning of markets for consumer financial products and services in order to identify risks to consumers, and to the appropriate functioning of markets
- Supervising constituents within the CFPB’s purview for compliance with federal consumer financial law; and dealing with violations of federal consumer financial law.
While CFPB serves an educational function, its primary purpose is to regulate the financial industry. Currently, CFPB has the power to enforce regulations under a number of statutes, including:
- Truth in Lending Act (TILA)
- Fair Credit Reporting Act
- Fair Debt Collection Practices Act (FDCPA), among many others.
As an enforcer of these regulations, CFPB has the power to determine if federal consumer financial law is being violated. If they determine that laws have been violated, CFPB has the power to force financial organizations to distribute refunds, pay fines, or incur civil penalties, among a number of other actions.
The CFPB has grown from the idea of Harvard professor to a well-established government agency with nearly 1,000 employees. Their aim is to protect consumers and right the wrongs of financial system that has caused hardship to millions Americans. While their effectiveness is widely debated, the importance of its existence is hard to deny.
The bankruptcy attorneys at McIntyre Thanasides Bringgold Elliott Grimaldi & Guito, P.A. understand how daunting and demeaning financial difficulties can be. That’s why work diligently with each of our clients to understand the intricacies of their case, their goals and give thoughtful counsel to improve their situation. Contact us today at 844-511-4800.
