CFPB: Definition, Role, Resources

  • The CFPB is a federal regulator 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 stories from Personal Finance Insider.

If you’ve ever felt frustrated when dealing with a financial services company that doesn’t seem sympathetic to your situation, the Consumer Financial Protection Bureau (CFPB) may be able to help.

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

Established in the wake of the 2007-2008 subprime mortgage crisis, the CFPB aims to be a central authority enabling better enforcement of laws and regulations, particularly in relation to how financial laws affect consumers. This means you can file financial complaints directly with the CFPB and won’t be bypassed, where you may have previously been referred to one of several other agencies.

How does the CFPB protect consumers?

The CFPB aims to promote fairness and transparency for consumer financial products such as mortgages, credit and other loans or services. The rules established by the CFPB allow financial firms to compete for a consumer’s business on a level playing field. These rules also allow a consumer to clearly see the terms and conditions of the product or service they are applying for, making it much easier to compare deals.

The CFPB is structured as an independent bureau within the Federal Reserve. It was created as a measure of the Dodd-Frank Act to implement and enforce federal laws governing consumer financial products and services. The Dodd-Frank Act also gave the CFPB increased powers with the aim of providing fair and transparent information to help consumers make the best financial decisions.

Prior to the formation of the CFPB, the power to enforce consumer financial protection laws and regulations was divided among seven separate federal agencies. The CFPB consolidated this power into one organization to increase accountability in government. The main purpose of the organization is to help the financial markets work for everyone.

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

What resources does the CFPB make available to consumers?

Some of the key resources that the CFPB makes available to consumers include:

  • online financial education materials for consumers
  • Expert help with consumer questions
  • Filing a complaint for problems consumers have with financial products or services

Online Educational Materials

“The CFPB provides a wealth of information for consumers, including easy-to-understand articles and videos about making smart financial decisions,” said Ross Gloudeman, general counsel and chief compliance officer at Azimuth GRC. “The site also shares helpful tips and insights for those experiencing financial distress or who feel that their bank or lender is not meeting their financial needs.”

Consumers can find information on 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
  • Collection of debts
  • cheating and fraud
  • money transfers
  • mortgages
  • payday loan
  • Cards with credit
  • Reverse Mortgages
  • student loans

expert help

The CFPB can help you answer many financial questions. You may find answers to frequently asked questions on-line. Help is also available over the phone in more than 180 languages. The number is 1-855-411-2372.

The CFPB may also refer you to other expert resources. For example, if you want to buy a house, the CFPB can refer you there HUD Housing Advisor across the USA.

Complaint Filing

According to the CFPB, it handles more than 10,000 complaints about financial products and services every week. Consumer complaints help the CFPB better oversee financial companies, enforce federal finance laws, and ultimately write better rules and regulations.

What role does the CFPB play in real estate?

Since the CFPB was formed as a result of the financial crisis, largely caused by fraudulent and predatory mortgage origination practices, the CFPB plays a central role in mortgage origination and servicing regulations.

The CFPB is active in creating and adjusting rules as needed. One example is an amendment to the Real Estate Settlement and Procedures Act (RESPA), Regulation X, to protect borrowers affected by the COVID-19 emergency. This change would allow service providers to make loan modifications for borrowers affected by a COVID-19 hardship and suspend 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 from four to two. The idea was to make it easier for consumers to understand their borrowing options, especially when looking for a mortgage. It also helps them avoid expensive surprises at the closing table.

How can the CFPB help me?

When consumers have problems with financial companies that they can’t solve themselves, filing a complaint with the CFPB can help. Here’s an example of what can happen with a medical bill complaint.

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

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

“As consumers attempt to resolve some of these issues, medical institutions report medical debt to credit bureaus as unpaid, and this can negatively impact a consumer’s credit score. If the consumer cannot work with the supplier to resolve the issue, they can file a complaint with the CFPB.”

How do I file a complaint with the CFPB?

You can file a complaint with the CFPB on-line or by calling 1-855-411-CFPB (2372).

The CFPB takes complaints about financial products or services and will ask you which of the following categories they fall into.

  • Collection of debts
  • Credit reports, credit repair services, or other personal consumer reports
  • mortgage
  • credit card or prepaid card
  • checking or savings account
  • Rent or lease a vehicle
  • student loans
  • Payday loan, title loan or personal loan
  • Money transfer, virtual currency or money service

Effective complaints are clear and concise. You should provide information about the following:

  • What happened, including key dates, amounts and communications you had with the company.
  • How you tried to solve the problem with the company.
  • What do you think would be a fair solution.
  • documentation

After you file a complaint, you can check the status where you filed the complaint online or by phone. You will also receive email updates from the CFPB on what is happening with your case, 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 was that the agency itself does not have enough oversight. The CFPB is funded by the

federal reserve

in lieu of Congress, allowing the Bureau to operate outside of Congressional oversight.

An example of this is how the CFPB can make rules for financial institutions. The CFPB has been empowered under the Dodd-Frank Act to make new rules or outlaw certain practices relating to consumer financial products or services if they are misleading, unfair or abusive. These rules can be enacted without input from Congress, which some members have objected to because it is the US constitutional legislature.

On the other hand, some have also argued that this level of independence can help the office work more effectively by isolating it from political pressures.