The federal agency in charge of making sure consumers have adequate protections when it comes to financial products noted that many of its attempts to give borrowers a better understanding of those products seem to have been successful.
Richard Cordray, the director of the Consumer Financial Protection Bureau, recently spoke before the U.S. Senate Committee on Banking, Housing and Urban Affairs. He detailed many of the findings in the agency’s Semi-Annual Report, which was published in July based on data ranging from January 1 to June 30 of this year. As part of the testimony, Cordray said that perhaps the largest strides the CFPB has made since he took office in early January came in the mortgage lending and servicing industries.
In particular, the CFPB has written rules this year that are designed to simplify the disclosure forms consumers receive as part of the home loan borrowing process, as well as bring greater clarity so that they can more fully understand this type of loan, and perhaps determine whether they can afford them, the testimony said. Further, it has also proposed rules that deal with other parties in the home loan borrowing process, such as mortgage servicers, to ensure that there is more accountability and transparency in that process.
The CFPB has also stepped up its attempts at engaging consumers so that they are more aware of the options and regulatory protections available to them, the testimony said. For one thing, the rate at which consumers are lodging complaints about their lines of credit — including mortgages, credit cards and other products and services — has increased over the course of the year, and in all, the CFPB received 72,297 such complaints between January 1 and September 3. The agency has also launched features on its website including a credit card complaint database and a list of frequently asked questions, both designed to help consumers better understand the kinds of agreements into which they are entering.
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The agency has introduced many new initiatives since Cordray took office in January, and prior to that had largely been focusing only on increasing protections related to consumers’ credit card accounts. The CFPB has purview over the entire lending industry as well as many non-bank financial institutions.
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