CFPB: Definition, Role, Resources

• The CFPB is a federal regulatory agency dedicated to making sure consumer financial markets work for all.
• The CFPB handles consumer complaints about financial companies and products.
• The CFPB has a robust library of materials to help you make better financial decisions.
• Read more stories from Personal Finance Insider.

If you’ve ever felt frustration when dealing with a financial services company that doesn’t seem sympathetic to your situation, the Consumer Financial Protection Bureau, or CFPB, may be able to help.

The CFPB is an agency charged with implementing and enforcing federal consumer financial regulations and ensuring that markets for consumer financial products are fair, transparent, and competitive. It was established by congress under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

Created in the wake of the subprime mortgage crisis of 2007 to 2008, the CFPB is designed to be a central agency that allows for better enforcement of laws and regulations, specifically in how financial laws affect consumers. This means you can file financial complaints directly with the CFPB and won’t be given the runaround, where previously you might have been directed to any one of several other agencies.

How does the CFPB protect consumers? 

The CFPB aims to promote fairness and transparency for consumer financial products, such as mortgages, credit, and other loans or services. Rules set by the CFPB allow for financial companies to compete for a consumer’s business on a level playing field. These rules also allow a consumer to clearly see terms and conditions of the product or service they’re applying for, which makes it much easier to comparison shop. 

The CFPB is structured as an independent bureau within the Federal Reserve. It was created as a measure of the Dodd-Frank Act to implement and enforce federal law for consumer financial products and services. The Dodd-Frank Act also gave the CFPB expanded powers with the goal of providing fair and transparent information to help consumers make the best financial decisions. 

Prior to the establishment of the CFPB, authority to enforce consumer financial protection laws and regulations was spread across seven different federal agencies. The CFPB consolidated that power into one organization to increase accountability in government. The organization’s primary purpose is to help financial markets work for everyone. 

The CFPB takes enforcement actions against individuals or organizations it believes have violated the law. According to the CFPB, enforcement is done by “filing an action in federal district court or by initiating an administrative adjudication proceeding.”  

What resources does the CFPB provide consumers?

The main resources the CFPB makes available to consumers include: 

• Online financial educational materials for consumers 
• Expert help with questions consumers have
• Complaint filing for issues consumers have with financial products or services

Online Education Materials

“The CFPB provides a wealth of information for consumers, including easy to understand articles and videos about making smart financial decisions,” says Ross Gloudeman, general counsel and chief compliance officer at Azimuth GRC. “The site also shares helpful tips and insights for those suffering a financial hardship or who feel that their financial needs aren’t being met by their bank or lender.”

Consumers can find information on the CFPB website about money topics  in the form of articles, videos, explainers, roadmaps, and more. These are topics such as:

• Auto loans
• Bank accounts and services
• Credit cards
• Credit reports and scores
• Debt collection
• Fraud and scams
• Money transfers
• Mortgages
• Payday loans
• Prepaid cards
• Reverse mortgages
• Student loans

Expert help

The CFPB can help answer many financial questions you may have. You may be able to find answers to common questions online. Help is also available by phone in more than 180 languages. The number is 1-855-411-2372. 

The CFPB can also direct you to other expert resources. If you’re looking to purchase a home, for example, the CFPB can direct you to HUD housing counselors across the US. 

Complaint Filing

The CFPB says it handles more than 10,000 complaints about financial products and services a week. Complaints from consumers help the CFPB supervise financial companies better, enforce federal financial laws, and ultimately write better rules and regulations. 

What role does the CFPB play in real estate?

Since the CFPB was established as a result of the financial crisis that was largely created as a result of fraudulent and predatory mortgage lending practices, the CFPB plays a central role in the rules regarding mortgage lending and servicing.

The CFPB is active in making and adjusting rules as needed. One example includes an amendment to the Real Estate Settlement and Procedures Act (RESPA), Regulation X to protect borrowers affected by the COVID-19 emergency. This amendment would allow servicers to make loan modifications for borrowers affected by a COVID-19 hardship and pause foreclosure proceedings. 

Another example of a rule created by the CFPB is the “Know Before You Owe” mortgage initiative. This initiative reduced the number of mortgage disclosure forms provided by lenders to two from four. The idea was to make it easier for consumers to understand their loan options, especially as they comparison shop for a mortgage. It also helps them avoid expensive surprises at the closing table.

How can the CFPB help me?

When consumers have issues with financial companies that they can’t resolve on their own, a complaint to the CFPB might help. Here’s an example of what can happen with a medical billing complaint. 

“When a consumer submits a complaint to the CFPB, they will reach out to the company to attempt to resolve the complaint and find out more information about how the consumer was affected,” explains Annette Harris, owner of of Harris Financial Coaching.

“The CFPB helps consumers resolve medical debt issues reported to credit agencies,” says Harris. “Medical billing is very complex, and working with insurance companies and medical facilities to resolve issues can cause payment delays. 

“While consumers are trying to resolve some of these issues, the medical facilities report the medical debt to credit agencies as unpaid, and this can negatively affect a consumer’s credit score. If the consumer cannot work with the provider to resolve the issue, they can submit a complaint to the CFPB.”

How do I submit a complaint to the CFPB? 

You can submit a complaint to the CFPB online or by phone at 1-855-411-CFPB (2372). 

The CFPB takes complaints about financial products or services, and you’ll be asked which of the following categories it falls under. 

• Debt collection
• Credit reporting, credit repair services, or other personal consumer reports
• Mortgage
• Credit card or prepaid card
• Checking or savings account
• Vehicle loan or lease
• Student loan
• Payday loan, title loan, or personal loan
• Money transfer, virtual currency, or money service

Effective complaints are clear and concise. You should include details about:

• What happened, including key dates, amounts, and communication you’ve had with the company.
• How you’ve tried to resolve the issue with the company.
• What you think would be a fair resolution. 
• Documentation
  

After you file a complaint, you can check the status where you submitted the complaint online or by phone. You’ll also receive email updates from the CFPB about what’s happening with your case, next steps and how the company responds to your complaint. Most companies respond within 15 days. 

Criticism of the CFPB

One of the criticisms of the CFPB has been that the agency itself doesn’t have enough oversight. The CFPB is funded through the

Federal Reserve

instead of Congress, which allows the bureau to operate outside of congressional oversight. 

One example of this is how the CFPB is able to issue rules for financial institutions. The CFPB was given authority under the Dodd-Frank Act to issue new rules or declare certain practices associated with consumer financial products or services to be unlawful if they are deceptive, unfair, or abusive. These rules can be made without input from Congress, which some members have objected to, given that it is the constitutional lawmaking body for the US.

On the other hand, some have also argued that this amount of independence can help the bureau operate more effectively by insulating it from political pressure.