The fledgling Consumer Financial Protection Bureau may have rung in its 100th day in business by defending its progress before Congress last week, but the hotly contested organisation is chugging right along to push forward new consumer-driven initiatives.
The agency outlined a plan Monday to give businesses a bit of a break when it comes to investigations over potential violations against consumers. Under the new Early Warning System, alleged violators have a chance to defend themselves before they’re taken to task.
Any business under investigation by the CFPB will have two weeks to submit a written response with any evidence they have to support the defence before any legal action is taken, the agency said.
“[The system] strikes a balance between the goal of fairness to those being investigated and our mission to protect consumers,” said Raj Date, the agency’s advisor to the Secretary of the Treasury.
Although Republican lawmakers still refuse to confirm President Obama’s nomination for the agency’s director, Richard Cordray, the CFPB has managed to move the organisation forward without a leader.
Looks like the people are pleased. More than 70 per cent of consumers said they support the CFPB in a recent Consumer Reports poll, according to Pamela Banks, senior policy counsel for the Consumers Union.
“The CFPB is designed to be a real watchdog for consumers, and it’s already working on serious issues like credit card complaints and helping people better understand the true cost of mortgages and student loans,” Banks said. “What the CFPB needs is a director and we’re going to keep pushing for confirmation.”
They’ve got a long road ahead of them, but here’s some of what the agency has done so far:
Simplified the mortgage process. This program consolidated two federally required mortgage disclosures into a simple form that makes the loan process more transparent to consumers.
Kept tabs on the CARD Act. The agency took over policing banks under the CARD Act, which was put in place back in 2009 to try to curb interest rate increases on consumer credit cards. It seems to be working: The agency says less than two per cent of cards saw interest rate hikes versus 15 per cent before the act was implemented.
Went to bat for college students. A major part of the CFPB’s mission is to crack down on shady lending practices to college students and to help simplify the loan repayment process for college graduates. But the agency can only do so much without a director, which could hurt students the most, as many of the agency’s plans to crack down on private lenders will be stalled until a leader is named.
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