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The Consumer Financial Protection Bureau is working on new regulations to protect lenders from unfair bank practices, marking the Bureau’s first significant move since it was created under last year’s Dodd/Frank act.Raj Date, the interim head of the Consumer Bureau, informally announced the new guidelines in a speech yesterday, with plans for a formal announcement next spring.
The rule would mainly protect consumers from misleading bank practices. Mortgage regulations would also include an attempt to consolidate complicated mortgage disclosure forms into a single easy-to-use form, reducing the hassle for consumers and lenders who have to review the paperwork.
Here’s what’s up next on the CFPD’s agenda:
- Working with educational agencies to improve the student loan system. The agency will take a special interest on loans with interest rates the average student will never be able to keep up with.
- Investigating hidden fees associated with “free” checking accounts. Most banks advertise free checking accounts to intice customers and then charge outrageous overdraft fees. The agency will take measures to eliminate this practice.
- Cracking down on non-banks, like payday loan and check cashing industries that often take advantage and abuse consumers.
However; there’s only so much the CFPD can do until it gets a permanent director. President Obama has nominated Ohio Attorney General Richard Cordray, but until he’s approved the agency won’t be fully operational.
With foreclosure rates soaring, the country could use more regulations to protect homeowners and lenders, but consumers can expect much Republican opposition to them as the GOP campaigns heat up in coming months.