The Consumer Financial Protection Bureau has only been around a little over five years, but they have remained busy from the moment of inception. This bureau was originally created by the Obama administration to offer financial protection to some of the most vulnerable consumers in the nation. However, not everyone believes that the Consumer Financial Protection Bureau has proven to offer protection. In fact, some say that this agency is anti-business and that it continues to harass legitimate business owners as part of its normal operating procedures.
To get a feel for what the Consumer Financial Protection Bureau has on tap in the near future, here is a sneak peak for you…
Payday Lending & Other Alternative Financial Products
As you are reading this, the bureau is busy working on a Notice of Proposed Rulemaking that would take action against companies that provide auto loans, payday loans and other alternative loan products. The CFPB seems to be very focused on proving that the lenders in these industries are providing loans to consumers who may not have the ability to repay them. Also, the CFPB plans to put new regulations in place that would prevent consumers from being able to get smaller dollar, shorter term loans due to all of the new loops that borrowers would have to jump through in order to get a simple payday loan. The CFPB is essentially working to make the job of providing loans more cumbersome, and the act of actually getting a payday loan almost impossible for the average consumer.
Prepaid Financial Products
In recent years, reloadable cards and other types of prepaid products have become increasingly popular. As such, the Consumer Financial Protection Bureau has decided to add more regulations in place that relate to this industry. The bureau recently finalized a proposal that will be released later in December. This proposal will add protections to prepaid accounts that are similar to the protections offered for debit cards. The CFPB has also proposed that some credit features and general credit card protections be extended to certain prepaid products. This proposal could come to fruition as soon as 2016.
Debt Collection Practices
The CFPB is also checking into how new rules can be implemented on debt collection companies. These types of companies are responsible for the majority of complaints that the federal government receives. The bureau plans to extend on its Advance Notice of Proposed Rulemaking to analyze the results of a recent survey that was conducted on the debt collection industry. The CFPB is also working on doing some consumer testing to find out the information that consumers would find useful about the debt collection industry, practices and how they can get additional information about their own debts.
These are just a few of the initiatives that the Consumer Financial Protection Bureau is working on currently. Of course, some will be impressed that the bureau is taking action to get debt collection companies under control. However, because the bureau focuses so much of its energy and attention on putting pressure on title loan companies, payday lenders and other legitimate businesses that offer very valuable services to the lower income households of this country, it is easy to understand why so many people are concerned about each and every effort that the CFPB throws its considerable weight behind. Smart consumers would do best to keep an eye on how these initiatives unfold, and make their voices heard when they believe that this newest appendage of the Obama administration is stepping far beyond its boundaries and not so much protecting consumers but punishing entire industries.