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The Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 established the Consumer Financial Protection Bureau (CFPB). The CFPB helps consumers navigate the financial markets by making rules that are fair and consistent. They enforce the rules fairly and they also provide a forum for consumers to take control of their financial situation, particularly if an entity has treated them unfairly. Some financial institutions might take part in practices that are unfair, deceptive, or predatory. The CFPB works to educate consumers about how financial institutions are required to act. On their website, the CFPB provides interactive forums about many topics, including student loans, mortgage payments, and the correct debt collection practices and what collectors aren’t allowed to do. They also enforce the laws by supervising banks, credit unions, and other financial companies. The CFPB has the power to punish these institutions with formal charges. Finally, they study the industry to better understand consumers and financial institutions so that they can best serve the financial community.
Here’s one example of how the CFPB helped a consumer. Rebecca from North Carolina missed a mortgage payment nine months after her husband’s death. In the following two years, although Rebecca was working with the mortgage company to get caught up, the mortgage company raised her mortgage payment and assessed fees that put her further behind. The mortgage company charged her additional service fees for services she didn’t ask for or receive. The mortgage company threatened foreclosure. With nowhere to turn, she continued to pay the predatory fees to stay in her home.
The CFPB is there to help consumers such as Rebecca who have been victim to predatory practices such as this. Another example is that of a person whose mortgage company neglected to pay the property insurance out of the escrow account on time, and then withdrew the amount twice. This caused problems because the escrow account went below the allowable amount by Federal Law. As a result, the insurance company assessed late fees and issued a “cancellation of insurance” notice.
The CFPB shows these examples on its website so that other consumers can understand how some companies are mistreating consumers. It is much like the Better Business Bureau. Consumers anonymously post their complaint and the company can respond. Even if the company doesn’t respond, the CFPB can help consumers resolve these and many other issues.
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