Consumer Financial Protection Act

What Is the Consumer Financial Protection Act?

The Consumer Financial Protection Act of 2010 is an amendment to the National Bank Act intended to distinguish and make sense of the standards that apply to national banks. The Consumer Financial Protection Act expects to increase oversight and explain the consumer finance laws administering financial transactions to safeguard consumers in these transactions.

The act, known as Dodd-Frank Wall Street Reform, brought about the creation of the Consumer Financial Protection Bureau (CFPB) to unify the regulation of different financial products and services.

Understanding the Consumer Financial Protection Act

After the housing market collapse of the late 2000s, which many accused, in some measure partly, on "savage" lending practices, the Consumer Financial Protection Bureau was laid out in 2011 to make more oversight of different financial processes. The agency endeavors to consolidate or determine disparities among federal and state financial laws. CFPB's primary goal is to shield consumers from fraudulent as well as excessively aggressive behavior from banks and other financial institutions.

Under its most memorable director, Richard Cordray, the CFPB was aggressive in actions against financial companies in its initial five years. It dealt with almost 1,000,000 consumer protests; its enforcement actions returned nearly $12 billion to 29 million consumers, and it enacted new financial regulations.

Consumer Financial Protection Act Legal Actions

Instances of the agency's legal actions incorporate suing credit card companies for participating in unfair, tricky, and abusive practices, arraigning banks for charging overdraft fees to consumers who had not agreed to overdraft services, and bringing lawsuits against payday lenders.

Nonetheless, Republicans generally could do without the agency and need to destroy it. Nullifying the CFPB was a critical part of the 2016 Republican Party Platform. In the platform, the creators stated that the CFPB was a "rebel agency" with a director with domineering powers, and its actions have been unfair to neighborhood and regional banks while leaning toward big banks.

The creators likewise whined that the agency has funding outside the appropriation interaction and utilizations its slush fund to guide settlements to politically preferred gatherings. Conservatives in the House and Senate have proposed bills to debilitate the agency by testing its funding, leadership structure, oversight, and data assortment.

Since its formation, actions taken by the CFPB helped return billions of dollars to a large number of consumers.

Special Considerations

In Nov. 2017, former President Trump delegated the head of the Office of Management and Budget, Mick Mulvaney, as interim director of the CFPB. In the wake of getting down to business, Mulvaney would not request funding for the agency, rethought payday lending goals drafted by Cordray, and downsized continuous examinations — including one into the Equifax data breach.

On Jan. 20, 2021, President Joe Biden nominated Rohit Chopra, a commissioner on the Federal Trade Commission, to be the director of the CFPB. As of May 2021, he is as yet waiting on the Senate to affirm his nomination.

Features

• The CFPB's job is to concentrate the regulation of different financial services and products.
• The act brought about the creation of the Consumer Financial Protection Bureau (CFPB).
• This bureau has been generally disagreeable with Republicans in Congress.
• Its job is to increase oversight and assist with safeguarding consumers with financial transactions.
• The Consumer Financial Protection Act of 2010 is an amendment to the National Bank Act.