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Consumer financial protection agency celebrates five years of taking action to help consumers

In its first five years, the Consumer Financial Protection Bureau, a new agency created to help protect consumers in the financial marketplace, has returned more than $11.7 billion to 27 million consumers in refunds and reduced fees.

“The CFPB is a data-driven, deliberative, and accountable regulator,” said Rachel Weintraub, legislative director and general counsel at the Consumer Federation of America.

“Since 2011, the bureau has developed an impressive track record of documenting patterns of abuse in the financial marketplace and taking decisive action to ensure that consumers are treated fairly," Weintraub said.

Since it was created, the bureau has:

·      Handled nearly 1 million consumer complaints.

In five years, the agency has handled nearly 1 million complaints from consumers on problems with credit cards, bank accounts, credit reports, mortgages, prepaid cards, and more. It also publishes complaints so consumers know what’s happening in the financial marketplace.

·      Empowered millions of consumers to “know before you owe.”

The bureau’s “know before you owe” efforts are making information about mortgages, student loans, auto loans, and other financial products and services more understandable for consumers. Consumers closed 1.9 million mortgages during the first three months of 2016 and received the agency’s new Loan Estimate and Closing Disclosure forms to help them understand the costs of borrowing.

The financial aid shopping sheet the bureau developed with the U.S. Department of Education has been adopted by more than 3,400 colleges to help students better understand the type and amount of grants and loans they qualify for.

The bureau’s newest “know before you owe” information is a worksheet consumers can use to compare auto loans before they sign for a loan.

·      Put in place new rules to make the mortgage market safer for consumers.

More than 49 million households have benefited from the agency’s mortgage protections. The bureau new mortgage rules address the risky lending and substandard mortgage servicing that helped cause the financial crisis. They protect consumers throughout the process – from shopping for a loan, to closing a mortgage, to paying it back. The bureau’s “know before you owe” mortgage disclosure rule gives consumers easy-to-understand information so they can understand the terms of the deal and comparison shop. Its Ability-to-Repay rule protects consumers from dangerous lending practices by requiring lenders to verify that consumers can actually afford to pay back the mortgages they’re offered. The bureau’s mortgage servicing rules protect consumers from surprises and runarounds while they’re paying back their mortgages and provide additional protections to help consumers if they fall behind on their mortgage payments.

·      Curbed harmful financial practices with new consumer protections nationwide.

The bureau is working on new consumer protections in several markets, some of them unregulated at the federal level. For payday lending, it’s asking for comments on a proposed rule to stop payday debt traps that harm many of the 12 million consumers who take out payday loans each year. The rule would require lenders to assess a consumer’s ability to repay his or her debts before they offer a loan.

In addition, the bureau is asking for comments on a proposed rule that would ban companies from using arbitration clauses to block groups of consumers from filing lawsuits to get relief for wrongdoing.

On debt collection, the bureau is developing rules to protect consumers against bad debt collection practices.

“The CFPB has established and impressive track record of success but there is still much more to be done,” said Tom Feltner, director of financial services at the federation. “Steadfast support from policymakers is critical to preserving a strong CFPB and ensuring that it has the ability to respond decisively to abusive practices.”

Copyright 2016, Rita R. Robison, Consumer Specialist

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