Blogging for Change

The Consumer Financial Protection Bureau: What is it?

by Kim McGrigg on
2/18/2011
in Consumer Protection

"When you buy a toaster, if it explodes in your face there's a law that says your toasters need to be safe. But when you get a credit card, or you get a mortgage, there's no law on the books that says if that explodes in your face financially, somehow you're going to be protected."  -President Barack Obama, March 19, 2009 on The Tonight Show with Jay Leno.

In 2009, President Obama proposed the creation of a Federal agency to protect the interests of American consumers as part of an overall plan to reform the financial industry.  On July 21, 2010, the Dodd-Frank Wall Street Reform and Consumer Protection Act was signed into law. This Act created the Consumer Financial Protection Bureau (CFPB).

The mission of the CFPB is to "make markets for consumer financial products and services work for Americans—whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products." Among other things, the Bureau plans to:

  • Conduct rule-making, supervision, and enforcement for Federal consumer financial protection laws;
  • Restrict unfair, deceptive, or abusive acts or practices;
  • Create a center to take consumer complaints;
  • Promote financial education;
  • Research consumer behavior;
  • Monitor financial markets for new risks to consumers; and
  • Enforce laws that outlaw discrimination and other unfair treatment in consumer finance.

One of the ways the Bureau plans to accomplish these task is by consolidating the consumer protection functions of several other agencies under one roof.  This transfer of responsibility is scheduled to take place on July 21, 2001, the one year anniversary of the Act's passing.  Agencies that will be transferring responsibilities and employees to the CFPB include: the Department of Housing and Urban Development, the Federal Deposit Insurance Corporation, the Federal Reserve System, the National Credit Union Administration, the Office of the Comptroller of the Currency, and the Office of Thrift Supervision.

The CFPB is an autonomous entity within the Federal Reserve System and will eventually be led by a director; however, the President’s nomination has not yet be sent to the Senate for confirmation. Harvard law Professor Elizabeth Warren, who is credited with being the first to suggest the need for such an agency to exist, is currently overseeing the Bureau as a special adviser.

For more information about the CFPB, visit their just-launched website ConsumerFinance.gov.

Consumers should also be aware that there are state and county consumer protection offices. For a list of consumer protection offices, please visit the Federal Citizen Information Center's website at http://consumeraction.gov/state.shtml.

Kim McGrigg is the former Manager of Community and Media Relations for MMI.

Recommended Articles

Man sitting in front of pile of bills, trying to understand his options.
Professional Budget Advice
Make the most of every dollar and start building toward your dreams! Budget counseling is FREE and available 24/7.
Learn More
Learn more
  • Better Business Bureau A+ rating Better Business Bureau
    MMI is proud to have achieved an A+ rating from the Better Business Bureau (BBB), a nonprofit organization focused on promoting and improving marketplace trust. The BBB investigates charges of fraud against both consumers and businesses, sets standards for truthfulness in advertising, and evaluates the trustworthiness of businesses and charities, providing a score from A+ (highest) to F (lowest).
  • Financial Counseling Association of America Financial Counseling Association of America
    MMI is a proud member of the Financial Counseling Association of America (FCAA), a national association representing financial counseling companies that provide consumer credit counseling, housing counseling, student loan counseling, bankruptcy counseling, debt management, and various financial education services.
  • Trustpilot Trustpilot
    MMI is rated as “Excellent” (4.9/5) by reviewers on Trustpilot, a global, online consumer review platform dedicated to openness and transparency. Since 2007, Trustpilot has received over 116 million customer reviews for nearly 500,000 different websites and businesses. See what others are saying about the work we do.
  • Department of Housing and Urban Development - Equal Housing Opportunity Department of Housing and Urban Development
    MMI is certified by the U.S. Department of Housing and Urban Development (HUD) to provide consumer housing counseling. The mission of HUD is to create strong, sustainable, inclusive communities and quality affordable homes for all. HUD provides support services directly and through approved, local agencies like MMI.
  • Council on Accreditation Council On Accreditation
    MMI is proudly accredited by the Council on Accreditation (COA), an international, independent, nonprofit, human service accrediting organization. COA’s thorough, peer-reviewed accreditation process is designed to ensure that organizations like MMI are providing the highest standard of service and support for clients and employees alike.
  • National Foundation for Credit Counseling National Foundation for Credit Counseling
    MMI is a longstanding member of the National Foundation for Credit Counseling® (NFCC®), the nation’s largest nonprofit financial counseling organization. Founded in 1951, the NFCC’s mission is to promote financially responsible behavior and help member organizations like MMI deliver the highest-quality financial education and counseling services.