WHO IS RUNNING THE CONSUMER FINANCE PROTECTION BUREAU?
TODAY IS THE BIG DAY THE CFPB GOES LIVE. Since there is no confirmation of the director (Cordray of OH), then who is in charge? What are our elected officials afraid of when they don't want to confirm any director?
The CFPB has oversight of six areas: The six areas are debt collection; consumer reporting; consumer credit and related activities; money transmitting, check cashing and related activities; prepaid cards and debt relief services.
It is reported there are somewhere around 100 to 150 employees. Who are they?
So far we've seen the agency produce a "know before you owe" redesign of the good faith estimate for a home mortgage. It certainly is an improvement over the one in use now; interesting it took a new agency to confirm the current GFE is confusing to consumers, or that the previous one page detailed disclosure was not as confusing.
The CFPB is funded to the tune of $500 Million that apparently has no oversight as to its use.
Do we need this agency? Is the agency too far reaching? While many of us would agree that the pay day loans carry ridiculous high interest rates for instance, it appears the focus would not be to eliminate these services or limit the rates, but put an emphasis on users understanding what they are signing up for.
It sounds good, but what about other services beyond these six areas? Do we want to be dependent upon Washington to make every decision for us? Will this lead to even more jurisdiction in other areas? Is there a point when areas of business are so regulated a consumer would have NO way to say they were duped?
I'm certainly not of the opinion that consumers should ever be duped, but they sure should be responsible for their decisions. I don't know if we need a new agency to protect us. So much of what they do in Washington these days leaves me unsure.
A good example of this may be the loan officer compensation rule. Maybe because I am not of the mind to take advantage of a consumer it seems the loan officer compensation rule was not necessary when states already regulate the amount of money that can be earned. This rule will place more money in the hands of the higher paid CEO's of banking institutions; it does not necessarily change what can be earned by a company, but what an originator can earn.
Will this new agency have a negative impact on the viability of small businesses? Since the name implies "consumer protection", then why isn't capping interest rates a consideration? I don't know anyone who does not think credit cards carry usury interest rates. SO MANY QUESTIONS!
