Since 2011, the Consumer Finance Protection Bureau (CFPB) has had as its sole focus protecting American consumers from unfair practices in the nation’s financial industries. By 2017, the agency had amassed significant data about how both consumers and commercial entities manage the nation’s money.
That data reveals that the organization responded to over 1 million consumer complaints and publicly published over 750,000 of those claims so that both consumers and finance industry professionals can learn from the actions of others. The complaints revealed inadvertent or intentional violations of consumer protection laws in every financial sector, including debt collections, credit reporting, bank accounts, money transfers, mortgages, credit cards and student loans, to name just a few.
The agency has also guided financial institutions to provide better service to their customers and clients by offering them the opportunity to review the complaints against them and make appropriate changes in practices or policies. As a benefit to the financial industry itself, the CFPB also worked to identify and to rewrite or remove unnecessary, outdated or over-burdensome rules. By fairly applying the principles of the country’s financial and economic rules and regulations, the agency ensures transparency for consumers and promotes fair competition among industry agencies.
Scope of CFPB Consumer Support
The Spring 2017 Semi-Annual Report summarizes the activities of just the last two full quarters, Q4 2016 and Q1 2017. The numbers from those six months are impressive:
- From October 2016 through March 2017, the agency responded to over 16,000 consumer complaints across all financial sectors.
- It directed the return of more than $6 million to consumers who had been mistreated by a financial services company.
- At the same time, agency enforcement actions compelled approximately $200 million in total relief for violators of the consumer finance protection laws.
- It achieved civil penalties of over $40 million.
Hearing the Voices of Consumers
The CFPB operates several different communications channels that give every consumer the opportunity to have their grievances aired. While its website, consumerfinance.gov, is accessible by anyone with an internet connection, the agency also conducts public listening events, field hearings, roundtables and town halls so that people can discuss their concerns face-to-face with the staff of the agency designed to help them.
In addition to the online or face-to-face chat, the CFPB also accepts digital narratives of consumer experiences with the financial industry and, as of the end of March 2017, more than 146,000 people had entered their story into the Consumer Complaint Database.
And to fill out the database even further, the CFPB also works to instruct and educate individuals who access America’s financial industries through their online tool, AskCFPB. On that site, consumers will find the answers to over 1,000 questions about financial products, credit cards, bank loans, payday loans and debt collections.
- For student loans, the CFPB site Paying for College provides advice and information that helps students and their families compare loan options and estimate college costs to find the best way for them to achieve their college education goals.
- At the Owning a Home page, consumers will find helpful information about mortgages, interest rates, and how to compare loan offers.
- At the Money Smart for Older Adults page, developed in conjunction with the Federal Deposit Insurance Company (FDIC), consumers of a certain age and their families can get information about potentially exploitative activities by financial institutions against older adults.
Helping the Industry Level Its Playing Field
There are several ways in which the CFPB has reached out to the finance industry to gain its support and engagement in financial oversight and reform:
In 2012, in an effort to improve communications and engage the participants of the financial services industries, the CFPB launched Project Catalyst to encourage innovation in the development of consumer- and industry-friendly financial products. It has since held almost two dozen “office events” in key commercial regions of the country, including San Francisco, CA, Austin, TX and New York to keep up with digital and technical trends in online banking and other internet-based financial opportunities. From these efforts came the agency’s three “policy tools” that will ensure that the future safety and security of the digital financial sector:
- “Research collaboration” connects CFPB subject matter professionals with financial sector entrepreneurs.
- A “trial disclosure program” that waives certain disclosure requirements so that entities can test alternative consumer-friendly disclosures.
- A “no action letter” policy that intends to reduce uncertainty in regulatory interpretation through official clarification.
In 2013, the CFPB established its Office of Financial Institutions and Business Liaison to coordinate its outreach efforts toward financial services entities in all sectors. In the intervening four years, the Liaison has hosted hundreds of meetings and phone calls, and dozens of public appearances with and in front of financial enterprises and financial trade organizations, both giving and receiving information about the functioning of the industry.
The CFPB has connected through Memorandums of Understanding with dozens of intergovernmental entities, including federal and state financial regulatory entities, state and tribal attorneys general, and state and local law enforcement agencies. Through partnerships with national and state-level civil rights groups, the CFPB has developed a series of advisory boards that offer insights into community banking, credit union practices, and even academic research into financial and economic activities. The agency’s Consumer Advisory Board provides data and insights on emerging products and practices within the field, including the plethora of online financial services that have recently entered the markets.
Through intense data analysis and consumer comments, the Spring 2017 Semi-Annual Report of the Consumer Finance Protection Bureau shows that the agency is doing excellent work on behalf of America’s consumers.