Today, the Consumer Financial Protection Bureau announced that it would finally start taking a good, hard look at the debt collection industry. It’s about time. Few industries need the attention more.
The CFPB also released 3 resources (all in PDF format):
Read Consumer Financial Protection Bureau to oversee debt collectors from the CFPB.
Today, the Consumer Financial Protection Bureau made the following announcement:
When we build our own software or contract with a third party to build it for us, we will share the code with the public at no charge. Exceptions will be made when source code exposes sensitive details that would put the Bureau at risk for security breaches; but we believe that, in general, hiding source code does not make the software safer.
The Consumer Financial Protection Bureau has started looking into regulating non-bank financial industries now that it has a chief. For starters, it is looking at debt collectors and credit reporting agencies. Says CFPB chief Richard Cordray, “Our proposed rule would mean that those debt collectors and credit reporting agencies that qualify as larger participants are subject to the same supervision process that we apply to the banks.” (Hat tip: CNN)
As part of their plans to grind Congress to a halt, the GOP swore to block any nomination of a head to the Consumer Financial Protection Bureau. However, according to the New York Times, the President plans to appoint Cordray while Congress is in recess. The legality of the move is apparently a bit murky, though, so we’ll wait to see how this plays out. (Hat tip to ShortFormBlog!)
Edit: Check out Cordray’s first post on the CFPB blog.
The Senate is set to vote on the nomination of Richard Cordray to head the Consumer Financial Protection Bureau at 10:30 a.m. today, after months of stalling tactics (including filibuster threats) by the anti-consumer faction in the Senate. This is a big deal, and if the vote goes forward, the first governmental agency actually on the side of consumers may actually have a head.
If you have a moment, call your senator at 202-224-3121, and urge him or her to vote! (Hat tip to US PIRG.)
Update: As expected, Republicans blocked the vote with a procedural measure.
The Consumer Financial Protection Bureau just released a prototype 2-page credit card agreement (PDF) that anyone can understand. This is exactly why the credit card industry will never adopt it.
In consumer transactions, knowledge is power. If you could actually understand the terms and conditions of an account, see them beforehand, and compare them to other credit cards, you might be able to make intelligent decisions about which card to use. That doesn’t serve the banks at all. Instead, since the banks are required to disclose that information, they do it in 13-page agreements in unreadable 8-point font, using blocks of boldface and all-caps text for the most important parts to discourage you from reading them.
The point is to make it difficult, if not impossible, to compare cards and make intelligent decisions about credit. Unless the CFPB has the power to force banks to use this disclosure form, they never will.
The Consumer Financial Protection Bureau is charged with eliminating fraud and deceptive practices by lenders. This has Wall Street worried, since it would much rather continue with business as usual, which depends on a fair amount of fraud and deception.
Alan Kaplinsky at CFPB Monitor has got Wall Street’s back, and thinks the CFPB is too powerful to be trusted with a single leader. His justification is impressive for its silliness.
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The Consumer Financial Protection Bureau will be in Minneapolis, MN, on October 26th (6:30 pm at MCTC) to hear from consumers about their personal finance issues. Let the CFPB know what money problems are making your life difficult.
The still-new Consumer Financial Protection Bureau is doing a lot of listening, trying to figure out where to focus its energy. Here are the main areas of concern according to Gail Hillebrand (formerly of Consumer Reports, now the CFPB’s Associate Director of Consumer Education and Engagement):
- Debt settlement issues. Consumers who pay for debt settlement services are too often not getting the help they were promised.
- Foreclosures, credit scores, credit reports, and their effect on employment. Advocates in Ohio are worried about the impact foreclosure can have on a homeowner’s credit report and credit score, and how the credit report, in turn, can affect future employment prospects.
- Disputing a credit report error. A Montana attorney reported that his clients frequently have difficulty figuring out how to dispute a credit report error, and they often end up purchasing unnecessary and costly credit monitoring or credit repair services when searching for information online.
- Payday lending. Payday lending operations—including those that operate online and those that target people residing on reservations—continue to be a concern for both communities. One Montana speaker described a client with $1,500 in payday loans whose sole income was $1,600 a month in disability payments.
The Fed decided to expand the CARD Act’s limit on fees charged to credit card holders during the first year of an account to include fees charged before the account was opened, and the banks used to halt enforcement by the Consumer Financial Protection Bureau. And so far, the banks are winning.
As Consumer Law & Policy Blog’s Brian Wolfman points out, “This decision may be the first addressing the validity of a rule enforced by the CFPB. No doubt there will be many more, as the banks try to extricate themselves from as many CFPB regs as possible.”