Does the Consumer Financial Protection Bureau Actually Protect?

Does the Consumer Financial Protection Bureau Actually Protect?

Initiated by Senator Elizabeth Warren and designed as a response to the financial crisis and the recent recession, the Consumer Financial Protection Bureau, or CFPB, is meant to stop deceptive, fraudulent and unfair business practices. According to the agency, it will accomplish this by “collecting complaints and conducting investigations, suing companies and people that break the law, developing rules to maintain a fair marketplace and educating consumers and businesses about their rights and responsibilities.”

Does the CFPB Actually Protect Consumers?

According to U.S. News, the agency has been protecting consumers. The news source reports that the CFPB has made credit card companies refund more than $1.8 billion to swindled consumers. The government organization has ordered mortgage lenders to decrease fees and to stop approving loans for borrowers who fail to qualify.

The CFPB has also come down on financial cons that involve the collection of upfront fees from consumers for assistance that they never wind up providing. In addition, a consumer complaint database has been created to help people who have individual issues.

A recent case against Amazon shows that the agency is continuing to protect consumers. In 2014, consumers began making official complaints against the online shopping company. The complaints were in regards to charges incurred by their children. According to the consumers, Amazon failed to disclose the possibility of free apps featuring chargeable upgrades. After filing a suit against the company, a federal judge found Amazon liable for unfair billing practices, and these consumers may receive a full refund.

Merging Responsibilities

When Senator Elizabeth Warren put the idea about the agency forward, she pointed out that protection for consumers in the financial sector was spread across several different agencies and that none of them considered it a priority. Central regulators failed to recognize when consumer and systemic safety was needed. Because of this, rash and dishonest practices infused the industry, which led to the economic and financial collapse of 2008.

Today, the bureau is the target of attacks from industry lobbyists as well as from their many Capitol Hill friends. This motley group is responsible for inventing pretend controversies in an effort to disband the agency.

What Power Does the Agency Have?

The agency has the power to target illegal bribes for mortgage referrals along with unjust billing practices. It is authorized to tackle cases involving credit bureaus and for-profit colleges. The CFPB can even go after companies that use deceptive sales and telemarketing ploys. Through the agency, more than 15 million consumers have received some type of compensation because of deceptive financial activities.

Who Oversees the CFPB?

Since the agency receives a flat amount of funding from the Federal Government, it does not have the power to increase its operating budget single-handedly like other government divisions. In addition, several regulatory departments have authorization to veto the CFPB’s actions.

The bureau also has to follow the guidelines of the Administrative Procedures Act. This means that the agency must take the time to post any regulations that it decides to enact and listen to the responses before it can put them into effect. The Financial Stability Oversight Council and Congress have oversight over the CFPB. Nerd Wallet reports that only the EPA and OSHA have these same kind of requirements.

Even with these checks in place, many members of the Republican Party have been clear about their dissatisfaction with the agency. Presidential contender Senator Ted Cruz recently said it was “a runaway agency” and that it “does little to protect consumers.”

Just this week, he announced a measure that would completely do away with the agency. He said that his measure would return the power back to Congress and give the government branch “the opportunity to free consumers and small businesses from the CFPB’s regulatory blockades and financial activism, which stunt economic growth.”

In speaking of the agency, House Representative Jeb Hensarling said, “The CFPB undoubtedly remains the single most powerful and least accountable federal agency in all of Washington.”

Managing the Financial Sector

While the CFPB is far from perfect, it does seem to be filling a gap when it comes to the country’s economic regulations. Before the agency existed, consumer protection was at odds with the duties of the existing financial agencies. At the time, they were tasked with the job of keeping banks sound, which meant that consumers were often overlooked. To read more articles about the CFPB and to see what it is or isn’t doing for the country’s citizens, visit the

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