The Dodd-Frank Act ushered in the most sweeping financial legislation in decades, signaling a new era of tighter regulation and heightened enforcement. The CFPB, a central element of the new law, takes on powers formerly exercised by various regulatory agencies. The central mission of the CFPB, as it is articulated on the bureau’s new website, is “to make markets for consumer financial products and services work for Americans—whether they are applying for a mortgage, choosing among credits cards, or using any number of other consumer financial products.”1
The CFPB is authorized to write and enforce consumer protection regulations targeting a broad range of financial services and products. Other provisions of the law set new requirements for:
- banks, thrifts and credit unions;
- consumer finance lenders;
- mortgage loan originators, loan servicers and brokers;
- currency exchanges;
- real estate settlement companies, appraisers, appraisal companies and appraisal management companies;
- consumer credit reporting agencies;
- debt collectors;
- debt settlement and management services;
- check cashing, collection or guaranty services;
- lenders and brokers in certain lease-to-own arrangements;
- financial and investment advisors (not registered with the SEC);
- payday lenders;
- credit counselors;
- broker-dealers, non-depository trust companies and deposit intermediation services;
- service providers and related persons of covered persons;
- some sellers or issuers of stored value cards and instruments;
- money services businesses, money transmitters and wire transmitters;
- in limited cases, tax preparers, accountants, merchants or retailers and attorneys; and
- financial data processors, including data storage providers, transmission services, and software and hardware providers.
These regulations will indelibly alter the consumer financial landscape.
For businesses that fall under the consumer financial protection legislation, uncertainty lies ahead in the form of the new regulations and enforcement powers. While the route is new, the skills needed to navigate it are not.