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Consumer Financial Protection Bureau Irene Skricki April 26, 2012 A (very brief) timeline 2007 • The United States starts facing its most significant financial crisis since the Great Depression. 2009 • President Obama proposes a consumer-protection bureau as part of Wall Street reform. July 21, 2010 • The Dodd-Frank Wall Street Reform and Consumer Protection Act becomes law. Implementation of CFPB begins immediately under the Treasury Department. July 21, 2011 • The CFPB becomes a bureau. January 4, 2012 • Richard Cordray named the first Director of the CFPB 2 Our Vision A consumer finance marketplace… where customers can see prices and risks up front and where they can easily make product comparisons; in which no one can build a business model around unfair, deceptive, or abusive practices; that works for American consumers, responsible providers and the economy as a whole. 3 The CFPB Toolbox: Many Different Approaches • Supervision/Examination/Enforcement • Research, Markets & Regulations • Consumer Response • Consumer Education & Engagement • External Affairs 4 Scope of Authority Enumerated Statutes that the CFPB can Implement and Enforce (as listed in Sec. 1002(12)) Alternative Mortgage Transaction Parity Act Consumer Leasing Act Electronic Fund Transfer Act Equal Credit Opportunity Act Fair Credit Billing Act Fair Credit Reporting Act Home Owners Protection Act Fair Debt Collection Practices Act Federal Deposit Insurance Act (selected sections) Gramm-Leach-Bliley Act (selected sections) Home Mortgage Disclosure Act Home Ownership and Equity Protection Act Interstate Land Sales Full Disclosure Act Omnibus Appropriations Act of 2009 (section 626) Real Estate Settlement Procedures Act S.A.F.E. Mortgage Licensing Act Truth in Lending Act Truth in Savings Act 5 Depository Institution Supervision • CFPB has authority to supervise and examine banks and credit unions with assets exceeding $10 billion, their affiliates and their service providers. • Dodd-Frank defines "affiliates" to include any person that controls, is controlled by, or is under common control with another person. (Sec. 1002(1)) • "Service providers" are defined as companies providing a material service to a covered institution. (Sec. 1002(26)) "Material services" include designing, operating, or maintaining a consumer financial product or service and processing related transactions. 6 Non-Depository Supervision Firms Subject to CFPB’s Nonbank Supervision Program Under Section 1024 1. All sizes of nonbank firms that offer or provide: • Origination, brokerage, or servicing of residential mortgage loans, or loan modification and foreclosure relief services related to such loans • Payday loans • Private education loans 2. For other markets of consumer financial products or services, a “larger participants” of these markets as the CFPB defines by rule. • Initial rule to be issued by July 21, 2012. • Issued Notice and Request for Comment on larger participant rulemaking on June 29th, which asked in part how a larger participant in specific industries should be defined (over 10,400 comments received) 3. Other entities that the CFPB has reasonable cause to determine engage in conduct that poses risks to consumers related to consumer financial products or services, after notice and a reasonable opportunity to respond 7 Research, Markets & Regulation Selected Reports Available on www.consumerfinance.gov: • Impact of the CARD Act of 2009 • Use of Remittance History for Credit Scores and Remittance Exchange Rates • Variation in Credit Scores • Fair Debt Collection Practices Act 8 Consumer Response www.consumerfinance.gov • Consumer Response now accepts complaints related to all bank products, including: • credit cards • mortgages • all bank accounts • private student loans • Help available in 187 languages • (855) 411-CFPB (2372) (Eng./Esp.) • TTY/TDD (855) 729-CFPB (2372) • Tell Your Story portal 9 CEE’s Offices Financial Education • Provide targeted educational content • Identify and promote effective fin ed practices Servicemembers • Improve financial protection • Escalate complaints • Coordinate w/ DoD, etc. • 26- 29 million Older Americans • Protect against financial abuse • Improve financial literacy • Planning for life events • 50 million aged 62+ Consumer Engagement • Create interactive, informative relationship with consumers Students • Increase awareness of debt in college choice • Escalate complaints • Build campus awareness • 22-28 million (age 16-26) Financial Empowerment • Improve financial stability for working families/new entrants • 30 million underbanked • 46 million lower income 10 Welcome to the CFPB 11 Feedback? Know Before You Owe: Student Loans 13 ConsumerFinance.gov/askcfpb Office of Financial Education Objectives: • Build a comprehensive approach to financial education in the U.S. Develop knowledge about what works in financial education and provide opportunities for financial educators to learn about effective strategies • Promote innovation: Test new ideas and share successful innovations with the field • Educate consumers: Provide understandable information to consumers that helps them make informed financial decisions • Increase federal coordination: Director of the CFPB serves as the vice chair of the Financial Literacy and Education Commission 15 Build a comprehensive approach to financial education Build knowledge about what works • • Commission evaluations of promising financial education projects Link financial educators and researchers with each other in a learning network Strengthen the field • Share best practices • Four listening sessions with financial education practitioners • Additional webinars • Tax-time savings materials for VITA sites TITLE YYYY/MM/DD 16 Promote Innovation Identify existing innovations in the field Seed new innovations in the field 17 Educate Consumers • Aspires to be a trusted resource for information for consumers and practitioners • Identify and share innovative practices and communication strategies in financial education • Work to provide consumer-focused materials in everyday language • Inform • Motivate • Help consumers achieve their own financial goals 18 Improve Federal Coordination • FLEC is a 21-member federal commission charged with improving coordination on financial education among federal agencies • Dodd-Frank Act names CFPB Director as the vice chair • OFE is actively engaged with FLEC working groups 19 How to Participate CFPB Blog: http://www.consumerfinance.gov/blog/ : https://help.consumerfinance.gov/app/tellyourstory CFPB Twitter: @CFPB CFPB Facebook: http://www.facebook.com/CFPB Go to ConsumerFinance.gov to sign up for our newsletter. Weigh in on current rulemakings: http://www.consumerfinance.gov/notice-and-comment/ 20 Contact us: [email protected] Questions?