How the CFPB Protects You (and Your Money) From Terrible Servicers

consumer financial protection bureau

Have you ever been a victim of predatory lending, banking, or investment practices? Do you ever wish someone would put irresponsible financial institutions in check?

Well, there’s actually a U.S. government agency that does just that: the Consumer Financial Protection Bureau (CFPB).

They’re responsible for protecting consumers from unfair, deceptive, or abusive practices in the financial sector. They can also take action against the companies responsible for such actions.

More importantly, the CFPB is a great government resource for you, the borrower. Especially if you have have a complaint against your student loan servicer. Here’s how the CFPB can help you.

What is the Consumer Financial Protection Bureau?

The Consumer Financial Protection Bureau was created after the 2008 financial crisis to protect U.S. consumers. It employs 1,623 staff members and is headquartered in Washington, D.C.

Originally, U.S. Senator Elizabeth Warren proposed the idea for such an agency back in 2007 when she was a Harvard Law School professor.

Then, in 2010, U.S. President Barack Obama appointed Warren as Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau.

Ultimately, Warren helped shape the agency into what it is today.

Currently Richard Cordray, former Attorney General and State Treasurer for Ohio, is the first and only director of the CFPB.

How does the CFPB protect consumers?

The role of the CFPB is to protect consumers from unfair and deceptive practices by banks and other financial institutions. The agency strives to achieve the following:

Empower

Through a series of articles and tools, the CFPB empowers regular consumers to make the best financial and financial product decisions possible.

Tools, data, answers to common financial questions, and useful tips on making financial choices are all available through the CFPB website and print resources.

Enforce

Through the creation and enforcement of rules and regulations, the CFPB prevents unfavorable financial situations before they begin.

The Bureau has an extensive rulemaking process that utilizes data analysis and research. They also take into account public input, hearings, expert roundtables, advisory panels, and small business reviews.

Essentially, the CFPB promotes collaboration with the public to bring about the best, most helpful and most effective rules to protect and advocate for consumers.

Educate

The CFPB works to educate both consumers and businesses on all aspects of personal finance decision-making.

They can help you learn how to open your first bank account as a child, how to pay for college or choose the right mortgage, and plan for a secure retirement.

Additionally, the Consumer Financial Protection Bureau educates financial companies and businesses on their roles and responsibilities when it comes to protecting consumers.

What are CFPB regulations?

The Consumer Financial Protection Bureau is constantly working on new and improved regulations for financial institutions.

Recent actions include improvements and amendments to existing laws like the Real Estate Settlement Procedures Act (Regulation X) and the Truth in Lending Act (Regulation Z). These are both mortgage and loan specific rules.

For example, Regulation Z is a Federal Reserve regulation that requires banks to be transparent and provide information on all costs involved with a credit card or loan. The CFPB works to ensure lenders follow that regulation.

The CFPB is also currently working on developing a handful of regulations for the following:

  • Updating financial thresholds in the Consumer Leasing Act (Regulation M)
  • Improving mortgage disclosures under the Truth in Lending Act (Regulation Z)
  • Creating an amendment to annual privacy notification rules dictating what’s included in those annual privacy notices you get from your bank

You know those tables added to your credit card statements that explain how much you would pay in interest if you only made the minimum payment? That came out of CFPB regulations like these.

Have you ever bought a home with a mortgage? There’s a stack of paperwork as thick as a phonebook that you have to sign and initial at closing.

This 426-page rule from the CFPB explains how the mortgage information should be laid out and disclosed to consumers. Although lengthy, it is a clear and easy-to-follow mortgage disclosure. Compare the old versions and new versions here.

How do I file a CFPB complaint?

The CFPB doesn’t just make rules and enforce them. They also take consumer complaints and actually follow up on them.

At the CFPB website, you can submit a complaint and view past complaints you think would be useful to other consumers. Pretty much everything that has to do with your money and a financial servicer you can file a complaint with the CFPB about.

The CFPB has a system for you to log in and track complaints on any of the following types of loans, products, and services:

  • Mortgage
  • Student loan
  • Vehicle loan or lease
  • Payday loan
  • Other consumer loan
  • Bank account or service
  • Credit card or prepaid card
  • Credit reporting
  • Debt collection
  • Money transfer or virtual currency
  • Other financial service

If your complaint involves a financial transaction with a financial services company in which they don’t live up to their end of the agreement or don’t follow consumer protection laws, the CFPB has your back.

What are some Consumer Financial Protection Bureau resources?

The CFPB states that all consumers have the right to clear, correct, and unbiased information about a variety of financial topics, including personal banking, buying a home and paying for college.

As U.S. citizens we pay for this organization with our tax dollars. That’s why their job is to make navigating our financial lives a lot easier.

Check out the Consumer Financial Protection Bureau website and see how they can start helping you, today.

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