The Consumer Financial Protection Bureau (CFPB) was formed by the Dodd-frank reform and consumer protection act of 2010. The consumer financial protection bureau was headed by a 5-year term president appointed chief. A Consumer Advisory Council that consists of at least 6 members also assisted the bureau, and is recommended by regional Federal Reserve presidents.
Consumers are helped by the CFPB in financing the market works efficiently creating and enforcing rules, and also and also making sure that consumers are able to take charge of their personal financial lives. Consumers are also educated and informed by the CFPB against abusive financial practices, to monitor banks and other financial institutions.
They also work to better understand consumers and the financial markets they participate in by studying the data.
The Consumer Financial Protection Bureau Definition
The consumer financial protection bureau means a regulatory body that is charged with the tasks of overseeing the financial products and services offered to consumers. There are several units in the Consumer Financial Protection Bureau like community affairs, research, consumer complaints, the fair-lending office, and the Financial Opportunity office. All the units work together in educating and protecting consumers on the various types of available financial products and services.
Consumer Financial Protection Bureau Must Know
- The Consumer Financial Protection Bureau was formed in 2010 to function as a regulatory body in overseeing consumer-related financial products and services.
- Some of their goals are to prevent consumers’ financial harm, to educate and empower consumers on financial topics, and to provide data-driven insights.
- Resources that are provided by the CFPB can be found by individuals that are interested in higher education financing, retirement, or homeownership.
- In contrast to the bill that set up the agency, The Supreme Court Of The United States stated on 29th June 2020 that the CFBP director may be removed by the president for any reason.
The Decision Of The Supreme Court
In a 5-to-4 decision, the Supreme Court of the United States ruled on 29th June 2020 that the separation-of-power clause of the constitution was violated by the structure of the CFPB since the bill stated that the Director of the CFPB removal could be done by the president only for “Cause,” which is defined as as “neglect of duty, inefficiency, or malfeasance in office.”
The Court, however, ruled that the director of the Consumer Financial Protection Bureau can be removed for any reason. The CFPB is then allowed by this decision to remain intact, albeit more vulnerable to the government’s executive branch.
Goals and Vision of the CFPB
The general goal of the CFPB is to encourage the development of the consumer finance market. By this, transparent financial prices and risks are easily accessible to consumers and they know about abusive and deceptive financial practices. This high-level goal was further broken down into four specific strategic goals.
- Prevention of financial harm to consumers while good financial practices are promoted.
- Empowering consumers to live better economic lives.
- Informing policymakers and the public with data-driven analytical insights.
- Advancing the CFPB’s general impact by maximizing the productivity of resources.
How individual consumers are helped by the CFPB
Added to these high-level goals, financial guidance is also provided by the CFPB to private individuals. Students and parents who will have to pay for college are provided student financial guides. The comparison of financial aid available on the market by individuals is allowed by these guides.
Informational resources for retirement planning are also provided for individuals that are far past college. Social security benefits and tips that are specific to an individual’s retirement situation can also be provided by the organization.
Lastly, private individuals can be helped with homeownership. Interest rate help, loan comparison tools, and monthly payment worksheets are provided for individuals by the Consumer Financial Protection Bureau’s (CFPB) website. Counseling on financial hardship is also provided for consumers who need mortgage help.
COVID-19 and The CFPB
The protection and maintenance of the consumer’s finance during the coronavirus pandemic are also provided by the Consumer Financial Protection Bureau. Finance management, detailed information on housing and mortgage assistance, avoiding scams that are related to coronavirus, and changes to student loan programs. Special population resources like veterans, military, older adults, families with children, and members of the small business community, are also provided.
How to file a complaint with the CFPB
Availability of complaint system to the public is part of the CFPB’s mission in protecting consumers. Below are 5 steps to take when filing a complaint:
- The process to file a complaint can be started or done through the CFPB or another agency. It is advised by the CFPB to study the complaint process prior to starting it to avoid any misunderstanding about how the whole system works.
- Your complaints are forward, by the CFPB, to the company you complained about and a response is attempted to be gotten from it. Another government agency may be enlisted sometimes, to help.
- The company is expected to provide a response on any steps taken (or planning to take), which may include communication between you and the company, to address your complaints’ issued within 15 days (60 on very rare occasions).
- Your complaint is then published in the CFPb’s Consumer Complaint Database, together with a description of what happened after the filing of the complaint. Your personal is, however, removed before publishing it.
- When the company responds, the CFPB will notify you and let that response be reviewed by you and also give you around 60 days to provide feedback on the response received from the company.
As stated by the Consumer Financial Protection Bureau (CFPB), consumer complaints that end up in the Consumer Complaints Database help the agency to protect consumers by understanding the financial marketplace.