What is the CFPB (Consumer Financial Protection Bureau)

The CFPB or the Consumer Financial Protection Bureau is a government agency that watches the banks and financial institution to treat the consumer fairly. It is precisely this institution that concerns us today and about which we will talk in as much detail as possible.

Creation of the Consumer Financial Protection Bureau

The CFPB is an initiative that corresponds to the Consumer Protection Act and the Dodd-Frank Wall Street Reform enacted in 2010. It is the product of the mind of Senator and former Harvard professor Elizabeth Warren, who promoted this regulatory body for the consequences of the 2008 crisis due to the deregulation of banking entities.

In the organizational scheme of this federal agency, the president of the republic appoints a trusted director, who will have a term of 5 years in office. On the other hand, this office has the advice of the Consumer Advisory Council, an institution made up of 6 members, who are recommended by the regional presidents of the Federal Reserve.

The main mission of the CFPB is to control the different financial entities so that they act appropriately through a series of regulations that protect the interests of consumers.

The application of the rules is intended to allow people to have greater financial awareness and take control over their personal finance decisions.

What is the CFPB?

The Consumer Financial Protection Bureau represents a government entity in charge of monitoring the financial products and services available to the American public. Within its functions, it has the power to regulate the conditions related to the contracting of credit cards and other banking cards.

To carry out its activities, this Bureau is divided into several departments: consumer complaints, community affairs, investigation, the office of fair lending and the office of financial opportunities.

The purpose of these strategic areas is to protect and educate citizens about the banking services and products offered by companies linked to the sector.

Objectives and functions of the CFPB

The Consumer Financial Protection Bureau intends to protect your financial interests. This provision is complemented by the objective of creating the conditions for people to have access to transparent prices and risks. At the same time, this contributes to raising awareness about the different abusive practices of the institutions.

Among its most important goals, it is important to point out that:

• It is intended to empower consumers to better manage their personal finances and achieve the financial success they seek.
• It fulfills its duty to prevent people from being financially harmed by promoting good practices for companies and consumers.
• It emphasizes the importance of informing the people and those responsible for economic policies through studies based on data analysis.
• It promotes the impact of its actions through actions that maximize the productivity of resources.

In addition to monitoring the market to discover possible financial risks that appear to the public, other notable functions are:

• It has the power to decide whether disputes regarding credit can go to court or be resolved through negotiation.
• Serves to care for consumers during mortgage operations, which includes support on guarantees, titles and financial companies linked to builders and real estate.
• Since it is accountable to the Treasury, it requires banks to verify applicants' employment status, credit history, and types of income.
• Although it cannot prohibit products such as interest-only loans, it sets the standards for mortgage offerings, real estate transactions, and equal opportunity for these loans.

CFPB Assistance to Individual Consumers

Another objective of the Consumer Financial Protection Bureau is to provide financial guidance to individuals. The entity has several guidelines aimed at advising parents and students who are planning to pay for college. Like the Busconómico comparator, this help makes it easier to compare the help available on the market.

In addition, this organism also offers advice regarding retirement plans, social security benefits and home purchases. You can visit their official website to find out about interest rates, comparison tools and templates to calculate monthly payments. All with the purpose of giving you the resources to make an informed decision.

Like the CFPB, we want to help you make the right decisions when it comes to financial products and services. We invite you to review or consult the Busconómico comparator to answer your questions and follow our recommendations.

Español: Qué es la CFPB