In early January, President Obama used a recess appointment to name former Ohio Attorney General Richard Cordray as the first director of the Consumer Financial Protection Bureau (CFPB). The CFPB received authority to develop and enforce the nation’s financial consumer protection laws last July. However, the new regulator’s abilities were limited because the U.S. Senate declined to confirm a director until changes were made to the bureau to make it more accountable to Congress.
Now that the CFPB has a director, it not only has full authority over the existing consumer protection laws, but it also is able to take enforcement actions and write rules that guide nonbank financial institutions, such as consumer reporting agencies, debt collection agencies, payday lenders and finance companies.
In the near term, the new regulator has signaled that it intends to focus on collecting and aggregating information from both businesses and consumers on the financial products and services that the CFPB will oversee. For example, the agency has set up consumer complaint systems for credit card and mortgage disputes and also will start collecting and aggregating consumer complaints related to private student loans and other financial products and services.
In addition, the CFPB has made consumer financial literacy and understanding a top priority. The bureau’s Know Before You Owe effort focuses on making mortgage disclosure forms and credit card agreements shorter, simpler and easier for consumers to understand.
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