What Is the Consumer Financial Protection Bureau?
The Consumer Financial Protection Bureau (CFPB) is a regulatory agency charged with overseeing financial products and services that are offered to consumers. The CFPB is divided into several units: research, community affairs, consumer complaints, the Office of Fair Lending, and the Office of Financial Opportunity. These units work together to protect and educate consumers about the various types of financial products and services that are available.
Understanding the Consumer Financial Protection Bureau
The Consumer Financial Protection Bureau (CFPB) was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The CFPB is headed by a chief who is appointed by the President for a five-year term. The bureau is also assisted by a Consumer Advisory Council, which is composed of at least six members who are recommended by regional Federal Reserve presidents.
Specifically, the CFPB helps consumer finance markets work more efficiently by providing rules, enforcing those rules and empowering consumers to take control of their personal financial lives. The CFPB works to educate and inform consumers against abusive financial practices, to supervise banks and other financial institutions, and to study data to better understand consumers and the financial markets they participate in.
The Vision and Goals of the CFPB
The overall aim of the CFPB is to facilitate the development of the consumer finance marketplace. Through this, consumers have access to transparent financial prices and risk and become aware of deceptive and abusive financial practices. The CFPB breaks down this high-level aim into four very specific strategic goals.
The first goal is to prevent financial harm to consumers while promoting good financial practices. The second goal is to empower consumers to live better economic lives. The third goal is to inform the public and policymakers with data-driven analytical insights. The fourth and final goal is to further advance the CFPB's overall impact by maximizing resource productivity.
How the CFPB Helps Individual Consumers
In addition to these high-level goals, the CFPB also provides financial guidance for private individuals. Student financial guides are provided for parents and students who will have to pay for college. These guides allow people to compare and contrast the various financial aids available in the market.
For those who are far past college, the CFPB also provides informational resources on retirement planning. The organization can help with social security benefits and provides tips specific to the retirement situation of the individual.
Finally, the CFPB can help private individuals with homeownership. On the CFPB website, it provides consumers with interest rate help, monthly payment worksheets and a loan comparison tool. For those consumers who need mortgage help, the CFPB also provides counseling on financial hardship.