The new consumer financial protection bureau is an independent agency but is funded and housed within
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According to former Director Richard Cordray, the Bureau's priorities are mortgages, credit cards and student loans.[2][3] The CFPB was designed to consolidate its employees and responsibilities from a number of other federal regulatory bodies, including the Federal Reserve, the Federal Trade Commission, the Federal Deposit Insurance Corporation, the National Credit Union Administration and even the Department of Housing and Urban Development.[4] The bureau is an independent unit located inside and funded by the United States Federal Reserve, with interim affiliation with the U.S. Treasury Department.[citation needed]
The CFPB writes and enforces rules for financial institutions, examines both bank and non-bank financial institutions, monitors and reports on markets, as well as collects and tracks consumer complaints.[3]
The CFPB opened its website in early February 2011 to accept suggestions from consumers via YouTube, Twitter, and its own website interface. According to the United States Treasury Department, the bureau is tasked with the responsibility to "promote fairness and transparency for mortgages, credit cards, and other consumer financial products and services".[5] According to its web site, the CFPB's "central mission...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".[6] In 2016 alone most of the hundreds of thousands of consumer complaints about their financial services—including banks and credit card issuers—were received and compiled by CFPB and are publicly available on a federal government database.[7]
History[edit]In July 2010, Congress passed the Dodd–Frank Wall Street Reform and Consumer Protection Act, during the 111th United States Congress in response to the Late-2000s recession and financial crisis.[2] The agency was originally proposed in 2007 by Harvard Law Schoolprofessor Elizabeth Warren.[8] The proposed CFPB was actively supported by Americans for Financial Reform, a newly created umbrella organization of some 250 consumer, labor, civil rights and other activist organizations.[9]
On September 17, 2010, President Obama announced the appointment of Sen. Warren as Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau to set up the new agency.[10][11] Due to the way the legislation creating the bureau was written, until the first Director was in place, the agency was not able to write new rules or supervise financial institutions other than banks.[4]
On July 21, 2011 Senator Richard Shelby wrote an op‑ed for the Wall Street Journal affirming his continued opposition to a centralized structure, noting that both the Securities Exchange Commission and Federal Deposit Insurance Corporation had executive boards and that the CFPB should be no different. He noted lessons learned from experiences with Fannie Mae and Freddie Mac as support for his argument.[12] Politico interpreted Shelby's statements as saying that Cordray's nomination was "dead on arrival".[13] Republican threats of a filibuster to block the nomination in December 2011 led to Senate inaction.[citation needed]
The CFPB formally began operation on July 21, 2011, shortly after President Obama announced that Sen. Warren would be passed over as Director in favor of Richard Cordray,[14] who prior to the nomination had been hired as chief of enforcement for the agency.[15]
President Barack Obamaannounces the nomination of Richard Cordray as the first director of the CFPB on July 18, 2011Elizabeth Warren, who proposed and established the CFPB, was removed from consideration as the bureau's first formal director after Obama administration officials became convinced Warren could not overcome strong Republican opposition.[16] On July 17, President Obama nominated former Ohio Attorney General and Ohio State Treasurer Richard Cordray to be the first formal director of the CFPB.[17]
However, Cordray's nomination was immediately in jeopardy due to 44 Senate Republicans vowing to derail any nominee in order to encourage a decentralized structure of the organization. Senate Republicans had also shown a pattern of refusing to consider regulatory agency nominees.[18]
Since the CFPB database was established in 2011, more than 730,000 complaints have been published.[7] CFPB supporters include the Consumers Union claim that it is a "vital tool that can help consumers make informed decisions".[7] CFPB detractors argue that the CFPB database in a "gotcha game" and that there is already a database maintained by the Federal Trade Commission although that information is not available to the public.[7]