The Consumer Financial Protection Bureau (“CFPB”) is an agency created by our federal government, responsible for protecting and regulating financial services relating to consumers. The bureau was created in response to the financial crisis our country underwent during the recession of this century. The bureau, which became effective on July 21, 2011, is responsible for policing banks, credit unions, payday loan lenders, mortgage banks, collection agencies and other financial institutions. The CFPB focuses the majority of its efforts on monitoring the credit card industry, student loans and the mortgage industry.
According to Richard Cordray, the first and current director of the bureau, the purpose of the bureau is to “promote fairness and transparency for mortgages, credit cards and other consumer financial products and service. The central mission of the Consumer Financial Protection Bureau is to make markets for consumer financial products and services work for Americans-whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”
The CFPB is responsible for drafting an annual written report describing its efforts taken in overseeing compliance with the Fair Debt Collection Practices Act (“FDCPA”). In this year’s report Cordray explained that about one out of ten Americans are subject to debt collection activity for debts averaging around $1,500 each. The CFPB intends to make the consumer finance market guidelines more effective by enforcing the existing rules in place, such as the FDCPA, thus empowering consumers.