Personal Finances - 2017


Consumer Financial Protection Bureau - A Friend or A Foe?

By Mo Vidwans

“We aim to make consumer financial markets work for consumers, responsible providers, and the economy as a whole. We protect consumers from unfair, deceptive, or abusive practices and take action against companies that break the law. We arm people with the information, steps, and tools that they need to make smart financial decisions."

This is the opening statement you will see if you go the website of CFPB. It is the best thing that has happened to consumers/customers of any institution, financial or otherwise. In fact, I can say that we, as consumers, never had it so good. And it has been a long time. Even after President Roosevelt passed many laws to protect the innocent, indigent and incapable most of those laws were at macro level and the little guy was still getting squeezed. The 1940s through the 1970s were terrible from that point of view.

There were so many cases of fraud and taking advantage of the defenseless guy that many laws were passed and many court cases had to be won to change the attitude of big and powerful. One of the aspects of the famous law passed in 1974 (ERISA) was to protect the pensions that the little guy was supposed to get after working for the same corporation for so long and for so many years but was manipulated for one reason or the other. Moving on to present times, the recession of 2007/2008, one of the primary causes was lack of pertinent rules and regulations that were abolished during the time period of late 90s to early part of the new millennium.

Consumer Financial Protection Bureau came into existence because of that (Dodd-Frank). Courtesy of Senator Elizabeth Warren of Massachusetts and many others, this organization was created to protect the consumer and it is doing its job well. Just to complete this thought, the current Govt. both the white house and the congress are trying hard to diminish the powers bestowed upon CFPB so that big businesses will benefit again. If you are a citizen then I urge you to write to your congressman and both senators to stop working on doing that.

CFPB works to empower low-income and economically vulnerable consumers to make informed financial decisions by providing them with tools and information and by promoting a more inclusive and fair financial marketplace.

They work closely with social service providers, financial educators, and community-based organizations, to reach low-to moderate-income consumers and get them information when they need it most. I would beseech every one who has a need to protect himself/herself from any atrocities to go on their website and understand what they can do and take full advantage of the help they offer for you.

I can tell you from my own experiences that I have used their help in the past for my clients and with good results; one case was about many fraudulent charges that the mortgage company did not want to remove.

What do they do?

Amongst many other things, each week they send thousands of consumers' complaints about financial products and services to the respective companies for response. Complaints are listed in the database after the company responds or after they've had the complaint for 15 calendar days, whichever comes first. They publish the consumer's description of what happened, if the consumer opts to share it, and after taking steps to remove personal information. This sounds trivial but it has significant impact, as you will see later.

Allegedly they don't verify all the facts in these complaints, but they take steps to confirm a commercial relationship between the consumer and the company. They may remove complaints if they don't meet all of the publication criteria as defined in their policy statement. Data is generally refreshed daily. Company level information should be considered in context of company size and/or market share.

The Consumer Complaint Database contains complaints they have received about consumer financial products and services.

The Consumer Complaint Database shows the consumer's original product, sub-product, issue, and sub-issue selections consistent with the options available on the form at the time the consumer submitted the complaint. The data base will allow you to:

• Learn more about complaint from changes to products and sub-products
• View full list of complaint from products, sub-products, issues, and sub-issues

Financial products and services in the Consumer Complaint Database are as follows:

• Checking or savings account
• Credit card or prepaid card
• Credit reporting, credit repair services, or other personal consumer reports
• Debt collection
• Money transfer, virtual currency, or money service
• Mortgage
• Payday loan, title loan, or personal loan
• Student loan
• Vehicle loan or lease

The bureau has helped so many of the common citizens who, otherwise, would not have a voice of their own. The current administration is trying to close or water down the powers of this bureau. It is up to us the citizens of these United States to support by writing to your own congressman and the two senators from your state to stop doing that.

So now folks, you decide; is CFPB a friend or a foe?

Next Month: Are you being phished, scammed, frauded, nudged, cajoled and scared into parting with your money? You are not alone!