Federal agency celebrates five years of fighting for consumers

The Consumer Financial Protection Bureau turns five years old this week and the federal agency has become a strong tool for consumers to use if they run into troubles with a financial company.

Some highlights of the bureau’s first years:

▪ Taken legal action against a number of banks, mortgage companies, debt collectors, payday lenders, credit card companies and for-profit colleges for breaking consumer laws. The result was $11.7 billion in relief for more than 27 million consumers.

▪ Handled nearly a million consumer complaints about a financial product or service, including almost 71,000 in Texas. The bureau will take complaints online at www.consumerfinance.gov/ or by phone, 855-411-2372, and will forward the complaint to the company and work to get a response. It also posts complaints if the consumer allows it, so others can see trends or find answers.

▪ Created new rules to make mortgages safer with more disclosure. The bureau is working on new rules to reign in abusive practices of payday lenders, to eliminate arbitration clauses and to ban class action waivers found in most financial contracts.

▪ Created online financial education for every stage of life available on its website. The bureau’s “Know Before You Owe” programs cover mortgage, student loans and, most recently, auto loans. It also has information on Social Security planning, teaching children about money and managing someone else’s money as a caretaker.

“The CFPB is the best thing that has happened for consumers in a long time,” said Richard Alderman, director for the Center for Consumer Law at the University of Houston Law Center. “Having a federal agency actually dedicated to helping consumers was long overdue.”

Alderman, who is also author of the Know Your Rights! Answers to Texans’ Everyday Legal Questions, said the bureau has recovered billions for consumers “who probably would be left without a remedy if not for the bureau.”

“Unfortunately, abuse in the consumer market place is so pervasive, the bureau still has a lot of work ahead of it,” he said. “It also has continued opposition from the House of Representatives, and business, which generally opposes anything it suggests.”

Alderman said the bureau is frequently used by the Texas Consumer Complaint Center at the university. (The center, which also takes consumer question and complaints at no charge, can be reached at 877-839-8422, or online at www.texasccc.com/.)

“We usually can assist them and help resolve their problem,” he said “If we are unsuccessful, we often refers consumers to the CFPB, and to my knowledge, they have been satisfied with the response they receive. The bureau only recently began handling individual complaints.”

I also have referred readers onto the bureau. One reader who was fighting with the credit bureau Equifax after her credit report showed an unpaid medical bill that was not hers and dinged her score. The action dropped her credit score 200 points.

After a year of trying to fix the error, the reader complained to the CFPB. Her credit report was cleared up in a week.

The June monthly complaint report by the bureau shows that credit bureau complaint volume was third highest of among all financial entities with 148,540 complaints taken since the process began by the bureau in 2011. (The highest complaint volume was for debt collectors (241,276 complaints, followed by mortgages at 231,549 complaints.)

Education is a key component to the bureau’s work, said Gail Hillebrand, associate director of consumer education and engagement for the bureau.

In addition to creating easy-to-read financial education materials and tools in English and Spanish, the bureau is building an infrastructure with public libraries and social workers to get the materials into the hands of those who need it most, she said.

One tool on the website is called “Ask CFPB,” where hundreds of questions are asked and answered in an easy-to-search format broken down into 11 categories, including debt collection, student loans and credit cards.

One of the more popular sections is its “Stages of Life” financial education section, which covers all of the ways students can repay student loans if their payment is too high to service, Hillebrand said. By answering a few questions about your specific financial situation, the tool can provide the options available to you for both federal and private student loans.

Another tool for those approaching retirement is an easy to handle Social Security calculator on the bureau’s website. By putting in your birthday and highest annual work income, the calculator will provide an estimate of your full retirement age income. You can then go further on the page to look at retirement strategies of when to start your Social Security based on your own financial and life expectancy circumstances.

Alderman said the bureau needs further exposure to make the public aware it is available to help.

“The only problem I see with the bureau is the difficulty any consumer protection entity has getting the word out that it exists, explaining what it does, and conveying the fact that it can help,” he said. “Hopefully the bureau’s many successes will soon translate into consumer recognition that there is help available.”

This story was originally published July 22, 2016 at 12:41 PM with the headline "Federal agency celebrates five years of fighting for consumers."