Chief Consumer Watchdog arrives in 2012
President Obama names former Ohio Attorney General as CFPB Director
America's consumers now have a top cop in a wide range of financial affairs. Richard Cordray, a former Ohio attorney general and state treasurer was appointed by President Obama to become the first director of the Consumer Financial Protection Bureau (CFPB). After the greatest financial collapse since that of the 1930s Great Depression, the historic Dodd-Frank Act created a new bureau to comprehensively address lending abuses and the accompanying power to enforce regulatory change.
Director Cordray now takes on oversight of payday lenders, mortgage companies and credit bureaus, writes rules for the non-banking industry. Most importantly, CFPB becomes the consumer's voice in financial services regulation. Ongoing monitoring and regulating of large depository banks began last July.
A lesser known duty of CFPB includes oversight on student loans for higher education. With authority over private student lenders, CFPB will require lenders to follow fair rules and provide families with information they need to make informed and smart choices in financing a college education for their children.
Learn more about this important new consumer agency and the challenges ahead.
The CFPB will help many people: young adults, seniors, rural households, women, etc. Find out more about what's at stake and take our quiz on Americans' "financial fitness" here
A key cause of our nation's economic meltdown was unsustainable mortgage lending, where subprime lenders put many families (most already homeowners) into expensive and unnecessarily risky home loans.
But that's not the whole story. Federal regulators—who should have been policing the marketplace--ignored the risky lending practices. Instead, they chose to watch over banks' short-term profitability and ignore consumer protection concerns. The result? An economic crisis that has lasted for years, millions of home foreclosures, and billions in bank bailouts paid for by consumers.
Congress created the CFPB as an independent agency with a sole mission of protecting borrowers from abusive financial practices. The CFPB can set rules for both banks and non-bank lenders (like payday lenders), which will level the playing field for all firms. And a strong, independent CFPB will help restore the economy by promoting a fair, transparent financial market—this will increase consumer confidence and the demand for products vital to job creation.
An overwhelming majority of Americans—Republican, Democratic, and Independent—favor strong, sensible oversight of the financial services industry, including a strong and independent Consumer Financial Protection Bureau, a new poll finds.
By a 3 to 1 margin Americans want financial firms held accountable and financial reforms to take effect as soon as possible. And they want the CFPB—created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010—to be up and running as planned, not diluted by industry's current attempts to weaken its funding and structure.
The victory for American families may be short-lived, if Congress passes newly-introduced bills to eliminate, weaken, or delay the bureau. By crippling CFPB before it can take one step to help middle-class households, these bills would ensure it's "business as usual" for Wall Street and the banks -- and more fees and financial tricks and traps for everyone else.
Here's how bills recently passed by the House of Representatives would stack the rules in favor of the bank-friendly regulator (OCC), compared to the agency that protects consumers (CFPB):
| Consumer Financial Protection Bureau - Today | Proposals to weaken CFPB | National Bank Regulator (OCC) |
|---|---|---|
|
Independent budget |
Funding can be held up by politics |
Independent budget |
|
A CFPB rule can be overturned if other regulators think it poses a danger to the U.S. financial system |
A CFPB rule can be overturned by other regulators if it reduces bank fees or income |
OCC rules can only be overturned by Congress. (OCC can also exempt banks from state consumer protection laws.) |
|
One independent director |
Decisions made by 5-person board |
One independent director |
- Blow the whistle on lawbreakers
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