Consumer Financial Protection Act

AAA

DEFINITION of 'Consumer Financial Protection Act'

An amendment to the National Bank Act designed to identify and explain the standards that apply to national banks. The Consumer Financial Protection Act aims to increase oversight and clarify the laws governing financial transactions in order to protect consumers in these transactions. The act resulted in the creation of the Consumer Financial Protection Bureau (CFPB) to centralize the regulation of various financial products and services.

INVESTOPEDIA EXPLAINS 'Consumer Financial Protection Act'

In the wake of the housing market collapse of the late 2000s, which many blamed, at least partly, on "predatory" lending practices, numerous proposals had been made seeking to grant the federal government more oversight of various financial processes. Forming a Consumer Financial Protection Bureau, (also refered to as the Consumer Financial Protection Agency) was one of those proposals. The agency is designed to consolidate or resolve descrepencies between federal and state financial laws. CFPB was launched in 2011; its main goal is to protect consumers from fraudulent and/or overly aggressive behavior from banks and other financial institutions.

RELATED TERMS
  1. The Great Recession

    The steep decline in economic activity during the late 2000s, ...
  2. Consumer Financial Protection Bureau ...

    A regulatory agency charged with overseeing financial products ...
  3. Investor Protection Act

    A component of the Wall Street Reform and Consumer Protection ...
  4. Truth in Savings Act

    A federal law passed by Congress on December 19, 1991 as part ...
  5. Emergency Economic Stabilization ...

    One of the bailout measures taken by Congress in 2008 to help ...
  6. Financial Institutions Reform, ...

    A law enacted to ensure that real estate appraisals are performed ...
RELATED FAQS
  1. How does FINRA differ from the SEC?

    With all the financial organizations out there, knowing what they all do can be as complicated as knowing where to invest. ... Read Full Answer >>
  2. What are the differences between absorption costing and variable costing?

    Absorption costing includes all costs, including fixed costs, in figuring the cost of production, while variable costing ... Read Full Answer >>
  3. What financial ratios are most useful for an investor to evaluate the liquidity of ...

    An insurance company, like any other nonfinancial company, needs access to liquidity in case it needs to fulfill its debt ... Read Full Answer >>
  4. What is the relationship between degree of operating leverage and profits?

    The degree of operating leverage directly reflects a company's cost structure, and cost structure is a significant variable ... Read Full Answer >>
  5. How does transfer pricing help business?

    Transfer pricing involves the trade of goods or services between two related companies, and both can come out the winner. ... Read Full Answer >>
  6. How do I calculate my effective tax rate using Excel?

    Your effective tax rate can be calculated using Microsoft Excel through a few standard functions and an accurate breakdown ... Read Full Answer >>
Related Articles
  1. Personal Finance

    Consumer Protection Laws You Need To Know

    Knowing these which consumer protection law can help you in particular situations can save you time, money and stress.
  2. Professionals

    Investigating The Securities Police

    Learn about the history of FINRA and how this organization protects investors.
  3. Investing Basics

    Policing The Securities Market: An Overview Of The SEC

    Find out how this regulatory body protects the rights of investors.
  4. Options & Futures

    Financial Regulators: Who They Are And What They Do

    Find out how these government agencies govern the financial markets.
  5. Personal Finance

    Who's Looking Out For Investors?

    If your account has been mishandled, FINRA and the SEC are among several organizations that can help.
  6. Investing Basics

    Explaining Write-Downs

    A write-down is a reduction in the book value of an asset because it is overvalued compared to the market value.
  7. Economics

    What are Noncurrent Assets?

    Noncurrent assets are property that a company owns that will last for more than one year.
  8. Investing Basics

    How Much Do CPAs Make?

    If you're considering becoming a CPA, here's what you might expect to earn.
  9. Economics

    Explaining Activity-Based Costing

    Activity-based costing (ABC) is a managerial accounting method that assigns certain indirect costs to the products incurring the bulk of those costs.
  10. Economics

    What is a Contra Account?

    A contra account is an offset that reduces the value of a related account.

You May Also Like

Hot Definitions
  1. Butterfly Spread

    A neutral option strategy combining bull and bear spreads. Butterfly spreads use four option contracts with the same expiration ...
  2. Unlevered Beta

    A type of metric that compares the risk of an unlevered company to the risk of the market. The unlevered beta is the beta ...
  3. Moving Average - MA

    A widely used indicator in technical analysis that helps smooth out price action by filtering out the “noise” from random ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Productivity

    An economic measure of output per unit of input. Inputs include labor and capital, while output is typically measured in ...
  6. Variance

    The spread between numbers in a data set, measuring Variance is calculated by taking the differences between each number ...
Trading Center