In a time when credit card consumers throughout the nation and in practically in every neighborhood find themselves struggling to either pay their bills or understand new financing laws (or both), a new ally bursts onto the scene – and it just might be a credit card user, a mortgage holder or a military recruit’s new best friend.
The Consumer Finance Protection Bureau, or CFPB, was formed in the wake of the 2009 Credit Card Act as well as the Dodd-Frank Act. This new agency’s top priority – indeed, it’s only priority – is to serve as a voice for Americans who are sick and tired of being, well, sick and tired. It hopes to serve as a bridge for consumers and the sector as a whole.
What It Is
The short explanation is simple: it serves as a liaison for consumers who have credit card complaints but may not know who to submit those complaints to, whether or not the complaints are even received and whether there will be any action.
Too often, consumers, regardless of the sector, make complaints and never know what happens after it’s been submitted. The CFPB bridges that gap of uncertainty and not only ensures the complaint is handled, but that it’s addressed in a proper and speedy manner, too. That’s quite powerful for any government agency and the fact that it’s focused less on politically correct and polite answers and more about righting the wrongs is like a breath of fresh financial air.
A spokesperson for the nonprofit advocacy agency Consumer Action says that the average American is “so far down on the list of financial regulators, that nobody ever gets to him”. She’s echoing the sentiments of not only many Americans, but those in advocacy groups who feel their hands are tied.
How It Works
Interestingly, the agency is defined by the best parts of other protection groups to define a new “sum” that means a more powerful voice and heavier hand in holding credit card companies, American banks and other credit institutions accountable.
Consumers who feel they’ve been treated unfairly or who cannot resolve complaints or problems through traditional channels can visit the agency’s website or call the toll-free number. They will lodge their complaint and receive a file number. The agency then contacts the creditor directly and if after ten days, if the creditor has not responded, the agency will begin its investigation using specialists who are trained in the unique subtleties of finance law.
It’s important to remember the agency is focused on problem solving efforts of legitimate issues. It won’t have the authority to step in and demand a better interest rate or any of the other “set in stone” financial dynamics. Its goal is to address unfair practices, such as high overdraft fees, excessive credit card fees, etc.
Also, at the top of its priorities is an effort to simplify mortgage disclosure forms. These overwhelming contracts are often so convoluted, potential home owners have no idea what the various interest rates mean, what an ARM is, how the finance rates on these ARMs work or even what the many fees are on the various disclosures are used for.
The Military
Finally, there’s a unique arm of the agency that focuses solely on the military. Often, service members are targeted by unscrupulous lenders who know the military’s pay periods, the requirements of the military that service members maintain good credit and they also bank on knowing that often, their customers are stationed overseas, which could mean an opportunity to rake in late fees due to missed payment dates.
The traditional military recruit is often young, perhaps married and suddenly with tremendous responsibilities placed on his or her shoulders – and there are lenders who prey on those vulnerabilities. These specialists will deal with this aspect of the credit industry in an effort to protect both enlisted service members as well as veterans.
The ultimate goal is to provide a streamlined service; a safe harbor, for consumers. The legal and financial jargon is frustrating for most and there’s something to be said for clear communication in a straightforward manner. This is where CFPB will step in and smooth the path. It’s a long overdue consumer service and one many are hoping will be their credit card cure-all.
Image: Wikipedia
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