The Consumer Financial Protection Bureau

"The Consumer Financial Protection Bureau was created to provide a single point of accountability for enforcing federal consumer financial laws and protecting consumers in the financial marketplace."

[ And so it was - until November 2017, when Trump appointed a CFPB opponent as acting head of the agency. See below for recent updates. ]

In January 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in response to the 2008 financial crisis. 

Prior to this, there were at least seven different regulators who were responsible for various aspects of consumer finance, and some rules had not been updated in many years. As you might imagine there were gaps in coverage, and when you added in a lack of comminication between regulators, the banks and other lenders (especially mortgage brokers and so-called "payday lenders") were left effectively unregulated. 

The Consumer Finance Protection Bureau (CFPB) was created to be an all-in-one agency covering every aspect of consumer finance from rules, regulations, and enforcement, to assisting consumers who have been harmed by illegal or unethical practices.  They have successfully taken on institutions that ripped off military members and veterans, banks (such as Wells Fargo) that illegally created additional accounts in consumers' names, illegal student lenders, illegal collections practices, lenders of all kinds who misrepresent fees and costs involved in their loans, and much more.

In their first six years, CFPB actions resulted in $11.8 billion in relief for over 29 million harmed consumers. 

The CFPB also handled over one million individual complaints and created a wealth of resources for any American dealing with banks, lenders, or any other financial companies ranging from payday loans to unscrupulous  (or fake) collection agencies. 

Republicans in Congress have attempted to neutralize the power of the CFPB, first by refusing to confirm (now Senator) Elizabeth Warren's appointment as head of the agency she helped to create; in July 2011 her nomination was removed from consideration and President Barack Obama nominated Richard Cordray to lead the CFBP. After months of Congressional inaction, in January 2012 President Obama made it a recess appointment. In July 2013, two full years after his nomination, the Senate finally voted to confirm Cordray for a five-year term as Director of the CFPB.  

On multiple occasions since it's creation, Congressional Republicans have attempted to cut funding to the CFPB. With the results of the recent election, it is difficult to predict how the CFPB may be affected. Michelle Singletary of The Washington Post wrote on November 15, 2016 that "Trump's election does not bode well for the Consumer Financial Protection Bureau.

On January 24th, 2017 the Los Angeles Times published an article by Jim Puzzanghera entitled "Consumer Financial Protection Bureau director says Trump won't change agency's aggressive efforts", recounting Director Cordrays comments at a Wall Street Journal forum held earlier that day. Codray stated that he will continue to aggressively hold banks and financial firms accountable. Cordray said, “We’re expected to work with different administrations of different points of view. We have … an independent mandate to do what we do and we will continue working to protect consumers.”

On June 8, 2017, The US House voted on party lines to aprove the so-called "Financial Choice Act", which would gut many of the financial protections put in place by Dodd-Frank after the financial crisis of 2008. The Senate has not yet acted, but is unlikely to pass such an extreme version of the bill.

Despite these difficulties, the Consumer Financial Protection Bureau has been a strong and tough ally for American consumers. 

In addition to helping resolve disputes with financial companies (who are generally quicker to respond when a federal agency becomes involved) and stopping illegal activities by many financial companies, they have created numerous instructional materials. They cover a wide variety of topics, including guides for service members and veterans and older Americans, "Know Before You Owe" guides to auto loans, mortgages, and student loans, information for those who are in the situation of managing someone else's finances , and even tools for teaching kids the basics of good personal financial management.

For the most current updates from the Consumer Finance Protection Bureau , you can also follow them on their CFPB Facebook page and on Twitter @CFPB

Update 28 November 2017: 

Director Richard Cordray resigned from the Consumer Financial Protection Bureau last week, leaving Deputy Director Leandra English in charge as Acting Director.  The Dodd-Frank Act of 2010, which created the CFPB, specifically states that the deputy director becomes “Acting Director in the absence or unavailability of the Director.”  According to former Representative Barney Frank (D-Mass), a co-author of the law, this language was specifically added to insulate the independence of the agency from the vagaries of the political process.

Trump, however, immediately said he was appointing Mick Mulvaney, the Senate confirmed (51-49) head of the Office of Management and Budget to also stand as acting director of the CFPB.  The administration claims that this appointment falls under the Federal Vacancies Reform Act of 1998, which allows for a president to appoint a Senate-confirmed official to head an agency in case of a vacancy. 

(Mulvaney, a former  U.S. Representative (R-SC), is a long-time opponent of the CFPB who claims that the agency is "the worst" kind of federal agency, and while a member of Congress sponsored legislation to eliminate the CFPB.  While in Congress he aligned with the Tea Party and was a founding member of the so-called Freedom Caucus.)

A federal district court judge in Washington, D.C. is reviewing the situation to determine who will be in charge of the CFPB until a new director is nominated and approved.

Update 30 November 2017: 

U.S. District Judge Timothy J. Kelly (a Trump appointee) denied English's request for a temporary restraining order blocking Mulvaney from taking control of the CFPB, acknowledging that there are constitutional issues that need to be resolved .  There will be additional hearings in the coming weeks, and likely a review by the U.S. Court of Appeals for the D. C. Circuit.

Mulvaney has already announced a 30-day hiring freeze, a 30-day halt on new regulations and filings for the CFPB, a 30-day halt on deposits to the civil penalty fund, and put a hold on all pending cases until he's personally reviewed them.  In interviews he hass said that he is also seeking more political appointees to the agency to help him "refocus" the CFPB.

Mulvaey, a vocal supporter of the payday lenders- and recipient of over $60,000 in campaign contributions from those in the payday lending industry,  is now the acting director of the Consumer Financial Protection Bureau - which was about to roll out new rules regulating payday lenders. 

Update 27 February 2018: 

In the three months since Mick Mulvaney took over the Consumer Financial Protection Bureau, he has been working hard to remove the "consumer protection" portion of the CFPB's focus : 

  • Scaled back the investigation into the massive Equfax data breach that at last check has affected half of all Americans.
  • Blocked new payday lender regulations that were about to go into effect after years of work.
  • Requested a quarterly budget funding amount of $0.00. (Zero dollars.)
  • Dropped an investigation into payday lender World Acceptance Corporation - a company that donated to his Congressional campaigns.
  • Forced the CFPB to drop lawsuits against four payday lenders, including Golden Valley Lending and Silver Cloud Financial, who had been charging interest rates of up to 950% . (Yes, you read that right - nine hundred fifty percent.) 
  • Turned the CFPB's Office of Fair Lending and Equal Opportunity (originally set up to force lenders guilty of various types of discrimination to provide financial settlements to those who were wronged) into an "advocacy, coordination, and education” group under his personal direction. 

For more: 

CFPB Finalizes Rule To Stop Payday Debt Traps

Would Trump’s CFPB Pick Mulvaney Back Consumers Or Payday Lenders?

Mulvaney Regulatory Freeze: TRO Denial

Sorry, Mr. President. You can’t make Mulvaney ‘acting’ head of the Consumer Financial Protection Bureau.

Doughnuts and a lawsuit: The battle for temporary leadership of the CFPB

Equifax compromised half of the country’s information. Trump’s CFPB isn’t looking into it.

The Steady, Alarming Destruction of the Consumer Financial Protection Bureau

Trump administration strips consumer watchdog office of enforcement powers in lending discrimination cases

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