In written testimony before the House Subcommittee on Financial Institutions and Consumer Credit Committee on Financial Services, Elizabeth Warren commented on the Consumer Financial Protection Bureau’s priorities.
One area of focus will be mortgages. The CFPB is working to eliminate some of the confusing and duplicative paperwork that consumers receive during the home loan process, moving toward a much simpler, shorter document that clearly spells out the information that consumers need when making the important decision to take out a mortgage.
Warren also stated credit cards will be an area of focus. Professor Warren believes making credit cards easier to understand and compare can also spur innovation. Instead of producing ever-more-complicated cards with more hidden fees and surprises, Professor Warren’s testimony stated card issuers would have additional incentives to produce innovations that are attractive to customers. Competition would flourish, according to Professor Warren, but in ways that consumers can see – better customer service or lower or more predictable prices.
The CFPB will also focus on consumer education. The Dodd-Frank Act required the CFPB to establish an Office of Financial Education. Professor Warren stated this office will be a 21st-century resource for consumers who are looking to better understand how different products and services work, and will provide access to tools and information that can help consumers select the products that are best for them.
The CFPB will also process consumer complaints. Later this year, the consumer bureau will also launch a consumer response center to receive complaints and to help consumers find answers for questions about consumer financial products and services. As of March 1, 2011, the CFPB had received approximately 300 complaints. Most of the complaints received fall into four categories. Mortgages and home loan complaints account for about one-half of the total. Credit cards are the subject of about 20 percent of the total complaints. The other two large sources of complaints are deposit products and other consumer loan products, which each account for about five percent of the total. Together, these four categories comprise approximately 80 percent of the complaints received.
Finally, the CFPB will focus on enforcement. One of the CFPB’s chief responsibilities will be to supervise certain non-bank financial companies that provide consumer financial products and services. These include mortgage brokers, mortgage lenders, mortgage servicers, payday lenders, and private student loan providers. This will be the first time that many of these non-bank financial services companies will be subject to federal compliance examinations.
Check dodd-frank.com frequently for updates on the Dodd-Frank Act and other important securities law matters.