Judging from the Consumer Financial Protection Bureau’s amazing output in the past year, you’d think the watchdog agency had been around for years.
Since it began operation one year ago tomorrow, the CFPB has created a welcome basket of new resources for borrowers, and given notice to credit-card issuers, mortgage lenders and other enterprises that the days of dissing the consumer are gone.
Just this week, the CFPB announced its first enforcement action, against the credit-card giant Capital One. The agency, in conjunction with the Office of the Comptroller of the Currency, identified “deceptive marketing tactics” by Capital One’s vendors to pressure or mislead consumers into buying unnecessary and potentially costly add-on products such as payment protection and credit monitoring. The combined actions of the agencies require Capital One to repay $150 million to some 2.5 million consumers, plus $60 million to the agencies themselves. (Affected cardholders need do nothing to get their reimbursement; the money will be credited to current cardholders’ accounts and mailed in check form to former cardholders.)
Here other notable CFPB accomplishments from the past year:
•Credit card transparency. The agency’s simplified credit card agreement spells out in plain language a card’s essential terms. The initiative is intended to help consumers make better choices among cards. (Our credit-card buying guide also can help.)
•Simplified mortgages. The CFPB is working to consolidate mortgage disclosure forms to reduce borrowers’ confusion. It’s also monitoring reverse mortgages, which are increasingly popular with older homeowners. In our reporting, we found these costly and complex products merit careful scrutiny.
•Better student loan information. The agency’s Know Before You Owe campaign, in coordination with the U.S. Department of Education, aims to make it easier for students and their families to compare college-finance options.
•Oversight of credit bureaus. The agency is focusing on ensuring that these companies accurately report consumer credit information and fix mistakes quickly. (Consumers Union, Consumer Reports’ advocacy arm, offers useful advice and information here on obtaining your free credit report.)
•Complaint database. Individuals now can contact the CFPB for help resolving complaints of lenders’ unfair and abusive financial practices, products and services. As of June 1, the agency had received approximately 45,630 consumer complaints, according to a recent report. More than 81 percent of those complaints have been sent to companies for review and response. The CFPB says that companies have already responded to about 89 percent of the referred complaints.
Happy birthday, CFPB. Long may you serve.