Home > Mortgages > CFPB: We’re Making Lending Easier to Understand

Comments 0 Comments

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.

[Credit Cards: Research and compare credit cards at Credit.com.]

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.

Image: Lazurite, via Flickr

Comments on articles and responses to those comments are not provided or commissioned by a bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by a bank advertiser. It is not a bank advertiser's responsibility to ensure all posts and/or questions are answered.

Please note that our comments are moderated, so it may take a little time before you see them on the page. Thanks for your patience.

Certain credit cards and other financial products mentioned in this and other sponsored content on Credit.com are Partners with Credit.com. Credit.com receives compensation if our users apply for and ultimately sign up for any financial products or cards offered.

Hello, Reader!

Thanks for checking out Credit.com. We hope you find the site and the journalism we produce useful. We wanted to take some time to tell you a bit about ourselves.

Our People

The Credit.com editorial team is staffed by a team of editors and reporters, each with many years of financial reporting experience. We’ve worked for places like the New York Times, American Banker, Frontline, TheStreet.com, Business Insider, ABC News, NBC News, CNBC and many others. We also employ a few freelancers and more than 50 contributors (these are typically subject matter experts from the worlds of finance, academia, politics, business and elsewhere).

Our Reporting

We take great pains to ensure that the articles, video and graphics you see on Credit.com are thoroughly reported and fact-checked. Each story is read by two separate editors, and we adhere to the highest editorial standards. We’re not perfect, however, and if you see something that you think is wrong, please email us at editorial team [at] credit [dot] com,

The Credit.com editorial team is committed to providing our readers and viewers with sound, well-reported and understandable information designed to inform and empower. We won’t tell you what to do. We will, however, do our best to explain the consequences of various actions, thereby arming you with the information you need to make decisions that are in your best interests. We also write about things relating to money and finance we think are interesting and want to share.

In addition to appearing on Credit.com, our articles are syndicated to dozens of other news sites. We have more than 100 partners, including MSN, ABC News, CBS News, Yahoo, Marketwatch, Scripps, Money Magazine and many others. This network operates similarly to the Associated Press or Reuters, except we focus almost exclusively on issues relating to personal finance. These are not advertorial or paid placements, rather we provide these articles to our partners in most cases for free. These relationships create more awareness of Credit.com in general and they result in more traffic to us as well.

Our Business Model

Credit.com’s journalism is largely supported by an e-commerce business model. Rather than rely on revenue from display ad impressions, Credit.com maintains a financial marketplace separate from its editorial pages. When someone navigates to those pages, and applies for a credit card, for example, Credit.com will get paid what is essentially a finder’s fee if that person ends up getting the card. That doesn’t mean, however, that our editorial decisions are informed by the products available in our marketplace. The editorial team chooses what to write about and how to write about it independently of the decisions and priorities of the business side of the company. In fact, we maintain a strict and important firewall between the editorial and business departments. Our mission as journalists is to serve the reader, not the advertiser. In that sense, we are no different from any other news organization that is supported by ad revenue.

Visitors to Credit.com are also able to register for a free Credit.com account, which gives them access to a tool called The Credit Report Card. This tool provides users with two free credit scores and a breakdown of the information in their Experian credit report, updated twice monthly. Again, this tool is entirely free, and we mention that frequently in our articles, because we think that it’s a good thing for users to have access to data like this. Separate from its educational value, there is also a business angle to the Credit Report Card. Registered users can be matched with products and services for which they are most likely to qualify. In other words, if you register and you find that your credit is less than stellar, Credit.com won’t recommend a high-end platinum credit card that requires an excellent credit score You’d likely get rejected, and that’s no good for you or Credit.com. You’d be no closer to getting a product you need, there’d be a wasted inquiry on your credit report, and Credit.com wouldn’t get paid. These are essentially what are commonly referred to as "targeted ads" in the world of the Internet. Despite all of this, however, even if you never apply for any product, the Credit Report Card will remain free, and none of this will impact how the editorial team reports on credit and credit scores.

Your Stories

Lastly, much of what we do is informed by our own experiences as well as the experiences of our readers. We want to tell your stories if you’re interested in sharing them. Please email us at story ideas [at] credit [dot] com with ideas or visit us on Facebook or Twitter.

Thanks for stopping by.

- The Credit.com Editorial Team