A New Financial Watchdog

Soon consumers will have new resources to help them understand and assess the terms of their credit card and mortgage contracts.

The recently enacted Wall Street Reform and Consumer Protection Act (Pub.L. 111-203, H.R. 4173) (the “Act”) created a new executive agency, the Bureau of Consumer Financial Protection. The Bureau will be a watchdog organization that will regulate and enforce the “offering and provision of consumer financial products or services.” The Bureau will target financial services such as extensions of credit, loans, leases, deposit-taking activities, payment instruments, and financial advisory services, that are offered primarily for personal, family, or household purposes.

One of the Bureau’s primary functions will be to educate the public about consumer financial products. For example, the Bureau will provide information and technical assistance to traditionally underserved consumers through its Community Affairs Unit. A Research Unit will analyze and report on developments in financial product markets, access to credit, and consumer behavior.

A second important function of the new Bureau will be to provide oversight and bring enforcement actions against violations of federal consumer financial law. For example, the new Office of Fair Lending and Equal Opportunity will enforce federal housing laws including, the Equal Credit Opportunity Act and the Home Mortgage Disclosure Act. The Bureau will also collect and track consumer complaints.

The Bureau will be led by a Director that will be appointed by the President with the advice and consent of the Senate. In the meantime, President Obama named Elizabeth Warren to help set up the new agency. Ms. Warren, Harvard University law professor who specializes in bankruptcy and commercial law, will serve as Assistant to the President and Special Advisor to the Secretary of the Treasury on the Consumer Financial Protection Bureau.

Author: Amanda Stein, Vice President, CLASS 2010-11
Contact: vp@consumerlawstudents.com