People have the right to be treated fairly and honestly by banks and other financial institutions. Rules for bank accounts and borrowing terms should be easy to understand. When customers have questions or concerns banks should respond to them in a reasonable time and try to resolve issues. When banks and other lenders don’t follow these simple rules who can we turn to?
Congress enacteed The Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank) in 2010. Part of Dodd-Frank created the Consumer Financial Protection Bureau (CFPB) to protect consumers from illegal and misleading banking and lending practices. The CFPB website explains its goals this way: “We aim to make consumer financial markets work for consumers, responsible providers, and the economy as a whole. We protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law. We arm people with the information and stepstools that they need to make smart financial decisions.”
Many big banks, lenders, debt collection companies and their advocates in Congress want to dismantle the CFPB. But, are consumers being helped? Let’s look at the numbers. On July 21, 2016, the CFPB celebrated its fifth anniversary and published its report card.
Since it was founded, the CFPB has:
Provided $11.7 billion in relief to more than 27 million consumers. The CFPB made banks, credit card companies, payday lenders, for-profit colleges and debt collectors pay back to exploited consumers.
Handled nearly one million consumer complaints. Consumers have the right to be heard when they have a problem with a financial product or service. A consumer can submit a complaint to the CFPB about a financial company and it contacts the company for a response. In five years over 3600 companies have responded to the complaints filed by consumers with the CFPB. Not only does the CFPB contact the company and get a response, it publishes all complaints on its website. Having an advocate to get answers and a public forum to air complaints empowers consumers.
Assessed $440 million in civil penalties. When the CFPB finds that abuses have occurred, the wrong doers are made to pay up. Part of these assessments funds the CFPB. It is not funded by taxpayer money.
Clarified and simplified loan disclosure forms. Consumers have the right to clear, reliable information about financial products and services so they can make informed decisions. The CFPB simplified and reduced loan disclosure forms for mortgages, student loans, auto loans, and other financial products and services to help consumers. Believe me, they are much better.
The CFPB is attacking abusive debt collection tactics. On July 28, 2016, the CFPB proposed new rules that would curb abusive debt collection practices. The CFPB reports abusive practices generated some 85,000 consumer complaints last year alone, more than any other issue. Many consumers report being harassed repeatedly to pay debts they don’t owe or have already paid. Older adults file more complaints about abusive debt collectors than any other issue.
Consumers now have an advocate with enough clout to make a difference. People can rely less on private attorneys to address disputes with lenders and debt collectors. The CFPB saves people money, opens the door for many who otherwise could not get help and gives people the power to stand up for their rights against big companies.