Ben Gran is a freelance contributor for Forbes Advisor on banking. He also writes for The Ascent (a Motley Fool service), where he covers insurance, credit cards, personal finance and investing. Ben has over 10 years of experience as a freelance cont.
Ben Gran Banking Reviewer and WriterBen Gran is a freelance contributor for Forbes Advisor on banking. He also writes for The Ascent (a Motley Fool service), where he covers insurance, credit cards, personal finance and investing. Ben has over 10 years of experience as a freelance cont.
Written By Ben Gran Banking Reviewer and WriterBen Gran is a freelance contributor for Forbes Advisor on banking. He also writes for The Ascent (a Motley Fool service), where he covers insurance, credit cards, personal finance and investing. Ben has over 10 years of experience as a freelance cont.
Ben Gran Banking Reviewer and WriterBen Gran is a freelance contributor for Forbes Advisor on banking. He also writes for The Ascent (a Motley Fool service), where he covers insurance, credit cards, personal finance and investing. Ben has over 10 years of experience as a freelance cont.
Banking Reviewer and Writer Korrena Bailie Editorial Director, Growth ProjectsKorrena Bailie has over a decade of experience reporting and editing personal finance stories and reviews. Her work has been featured in Wirecutter, The New York Times, Bankrate and Credit Karma.
Korrena Bailie Editorial Director, Growth ProjectsKorrena Bailie has over a decade of experience reporting and editing personal finance stories and reviews. Her work has been featured in Wirecutter, The New York Times, Bankrate and Credit Karma.
Korrena Bailie Editorial Director, Growth ProjectsKorrena Bailie has over a decade of experience reporting and editing personal finance stories and reviews. Her work has been featured in Wirecutter, The New York Times, Bankrate and Credit Karma.
Korrena Bailie Editorial Director, Growth ProjectsKorrena Bailie has over a decade of experience reporting and editing personal finance stories and reviews. Her work has been featured in Wirecutter, The New York Times, Bankrate and Credit Karma.
| Editorial Director, Growth Projects
Updated: Jun 10, 2020, 10:00pm
Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.
© 2019 BLOOMBERG FINANCE LP
If you’ve ever had a bad experience with a bank, credit card issuer or mortgage company, if you’ve ever been discriminated against when applying for credit or if you’ve ever been victimized by financial fraud or abusive practices, you should know about the Consumer Financial Protection Bureau (CFPB).
This federal agency is intended to be a watchdog for consumer rights and to help protect people and their money from deceptive or unfair practices by financial services companies.
No matter how much money you have—even if you have not suffered from fraud or deceptive practices—it’s important to understand the mission of the CFPB and learn more about how this agency can help protect your rights.
The Consumer Financial Protection Bureau was created in response to the financial crisis of 2008 and the Great Recession, when millions of Americans lost their homes to foreclosure. The financial crisis shone a spotlight on the deceptive and abusive practices of subprime mortgage lenders and prompted a new era of regulation of financial services companies, with the goal of helping consumers to better understand the risks, costs and details of various types of mortgages, credit cards and other financial products.
During the housing bubble of the mid-late 2000s and the financial crisis that followed, millions of middle class and working class Americans were offered subprime mortgages and adjustable-rate mortgages that didn’t fit their needs, and they were encouraged through deceptive advertising and predatory sales practices to buy more expensive homes than they could afford. So long as housing prices kept going up, people could keep refinancing their mortgages. But when the housing bubble burst, millions of families were suddenly faced with foreclosure and financial ruin.
The housing crisis, along with other long-standing issues of concern like payday loans, predatory lending and excessive interest and fees being charged on consumer debt, helped create momentum and shaped public opinion in favor of the creation of the CFPB.
The federal agency was formally established in 2011 under President Barack Obama and was created under the leadership of Elizabeth Warren, who was then a Harvard University law professor who had researched and warned about the predatory practices of some financial services companies and the disproportionate risks of certain types of mortgages.
There were already various federal regulations in place as well as agencies that are responsible for oversight of the financial services industry, but the CFPB was created with the goal of serving as a single, centralized agency that could be a more powerful advocate for consumer rights.
The financial crisis and Great Recession were powerful reminders that millions of Americans were not adequately protected against predatory lending practices and other excessive financial risks imposed upon them by bad actors in the financial services industry. Warren and her allies in Congress decided to create the CFPB to have a new regulatory enforcer to be a watchdog for consumers and to help consumers make better-informed decisions about their finances.
The Consumer Financial Protection Bureau has three primary missions, to:
The CFPB also offers free consumer financial education tools to help people understand their finances and make better financial choices. If you’re considering getting an auto loan or reverse mortgage, want to understand your rights while going through debt collection or want to learn more about the details and possible risks of any big financial decision, the CFPB website provides a central source of information to help you understand your options.
The CFPB also provides data and research on various consumer finance topics, such as mortgage delinquency rates, consumer financial well-being, debt collection practices and other aspects of how the financial industry is treating consumers and how consumers are faring in the world of financial services.
The CFPB is intended to help make sure consumers get treated fairly by banks, credit card issuers, mortgage companies and other financial services firms. There are several ways that the CFPB helps protect consumers’ rights, by:
For more information about how the CFPB works and why it matters to everyday consumers’ financial lives, check out this video interview with Richard Cordray, former director of the CFPB and author of a new book, Watchdog: How Protecting Consumers Can Save Our Families, Our Economy, and Our Democracy.
Do you feel you’ve been treated unfairly by a financial services company? Here are a few common situations that might necessitate submitting a complaint to the CFPB. Do you feel that you…
…or other issues?
Depending on your situation, you may be able to file a complaint and potentially receive help from the CFPB for your bad experience with a financial services company. And even if your situation does not constitute fraud or illegal activity by the financial services firm, you may be able to get your problem solved more quickly if you file a complaint.
Sometimes financial services companies don’t intend to commit fraud or cause harm to consumers; sometimes the issues that consumers file complaints about turn out to be just a simple mistake or misunderstanding. But even if it’s an innocent mistake, consumers still have the right to submit a complaint to get their issues examined and resolved with the help of this consumer watchdog.
The CFPB will contact the financial services company and work to get you a response: 97% of consumers receive a timely response; most companies respond within 15 days (the CFPB expects companies to resolve complaints within 60 calendar days). Filing a complaint is quick and easy; it usually takes less than 15 minutes to file. By filing complaints for bad experiences with financial services companies, you are helping create accountability and public information to help the financial industry serve people better.
You also can browse the public data in the CFPB consumer complaint database; you can search by company to see what complaints may have been issued against that financial services firm.
The COVID-19 crisis has caused a wide array of effects in everyday life and people’s finances. The CFPB is part of the government response to the crisis from a personal finance perspective:
If you cannot pay your bills and need to understand your options for mortgage forbearance, avoiding eviction, getting consumer credit counseling or finding a lawyer to help with your financial issues, the CFPB website is a central repository of information and resources.
The CFPB is intended to serve as a watchdog and consumer advocate. If you have been treated unfairly, suffered discrimination or have been mistreated by a financial services company, the CFPB is supposed to be on your side. One major goal of the CFPB was to help avoid another massive crisis like the 2008-2009 housing collapse. COVID-19 is a very different kind of crisis, but the CFPB still matters.
By providing good public information and accountability, the CFPB also intends to help the overall financial markets function better. When financial services companies comply with the law and do the right thing for consumers, it’s ultimately a good thing for those financial services companies, too. The CFPB is part of a regulatory framework that’s intended to create a fairer environment for both financial services customers and providers.
At their best, regulators like the CFPB help add value for consumers, maintain trust in the financial system and ensure more efficient operation of the U.S. economy. When regulators can help promote fair lending and best practices to reward good corporate citizens and punish bad actors, the government and the private sector together can help create a fairer and more prosperous country.
