Think you've been scammed or lied to by a bank, lender, or other financial service provider? Wish you could file a complaint? The government has your back, in the form of the Consumer Financial Protection Bureau (CFPB). This agency enforces laws designed to protect you. It also educates consumers about making the right financial choices.
Learn more about your rights as a consumer and loan borrower and how the CFPB can help.
What Is the CFPB?
The CFPB is an independent bureau within the Federal Reserve System. Its goal is to provide consumers with the information and resources they need to make financial choices in their best interests. The CFPB also aims to promote transparency and fairness when it comes to credit cards, mortgage loans, and other financial services and products consumers use.
Banks and other consumer financial services providers must legally follow the rules and guidelines established by the CFPB. This allows you to compare financial offerings better and know the features and expenses of these offerings so that you can make a more informed decision.
Over 1,500 people work for the CFPB across six divisions: Enforcement and Fair Lending; Consumer Education and Engagement; Supervision, Research, Markets and Regulations; External Affairs; Legal; and Operations.
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Why Was the CFPB Created?
The many causes of the Great Recession made it apparent that multiple agencies and set of rules for the many financial products and services we buy were not fully protecting the public. In response, the Dodd-Frank Wall Street Reform and Consumer Protection Act became law in July 2010. This Act launched the Consumer Financial Protection Bureau.
The CFPB officially began operation a year later. This new financial agency would emphasize protecting consumers from destructive financial and marketing practices. This agency would make the government more accountable for consumer financial protection and oversight. It would consolidate related responsibilities and federal protections in one place. And it would have the same independence and accountability as other banking agencies as well as needed funding to operate successfully.
What Does the CFPB Do?
Big corporations have powerful lawyers and deep pockets to defend their interests. But where can the common person, who lacks resources and knowledge, turn for help when they are being taken advantage of by a provider of financial products or services? The answer is the CFPB.
Among its duties, the CFPB safeguards you from deceptive, unfair, and abusive acts by financial companies. It also enforces current consumer financial protection laws. The bureau prides itself on educating consumers about the law and their rights, too. What's more, the CFPB assesses the business practices of these providers to ensure they are compliant with the law. The agency scours the industry and takes the necessary steps to guarantee transparency in the marketplace.
If you feel that a financial business has not lived up to its promises, you can submit a complaint online or by phone and the CFPB will investigate.
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How Does the CFPB Protect Mortgage Borrowers?
Carrying a mortgage loan is one of the biggest financial responsibilities a consumer will ever undertake. With so much hard-earned money at stake, you want to be sure that your lender will deliver on what it promised and make it easy for you to understand your obligations. You want to be able to trust that your lender's recommendations are in your best interest.
Fortunately, the CFPB has beefed up protections for mortgage borrowers. For example, today, thanks to stronger federal laws, your lender can't charge you hidden fees. Your lender's staff has to meet professional licensing requirements. You no longer have to worry about your lender putting a mandatory arbitration clause in mortgage contracts.
If you only qualify for a high-cost mortgage loan, your lender has to notify you ahead of time about this and state the terms, fees, and costs related to the loan. And they have to get certification that you've received guidance from a housing counselor about a high-cost mortgage.
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Other Protections for Mortgage Borrowers
Thanks to the CFPB, you have stronger rights once you complete your purchase or refinance. For instance, your loan servicer must legally provide a written mortgage statement each billing cycle that indicates what you owe and how your payment is divided between principal and interest. Servicers must also show what they paid on your behalf for taxes and insurance, your payment options, and information concerning late payments and fees.
Payments you make have to be credited to your account the day they come in. Servicers must respond within seven days if you ask how much it will cost to pay off your mortgage. Plus, you don't have to worry about being charged for unneeded insurance coverage.
The protections don't stop there for mortgage borrowers. Your lender is obligated to follow good customer consumer practices. Got an adjustable-rate mortgage? Then you'll have a minimum of two months' warning before your payments are due to change. Having trouble paying your mortgage? Your mortgage servicer must try to contact you to discuss the issue no later than 36 days after your payment was due. If you're encountering difficulty paying your loan, you can apply for help from your lender, too.
How Do I File a Complaint With the CFPB?
If you had a beef with your lender, bank, or other financial product or service provider in the past, you didn't have a lot of choices. Chances are you had to make several phone calls and try to settle the problem with the company. Or perhaps you'd be forced to hire an expensive attorney for help.
Today, getting assistance is much easier and quicker. Simply file a complaint with the CFPB at consumerfinance.gov/complaint/process. If your conflict has to do with your mortgage, visit consumerfinance.gov/complaint/#mortgage. You can also phone (855) 411-2372 if you have a question.
When you file a complaint with the CFPB, you'll receive email updates and can log in to track the status of your complaint. The CFPB will forward your complaint and any documents you submitted to the business you're complaining about and push to get them to respond. The company will review your complaint and communicate with you as needed. It will report to the CFPB the steps it has taken or will take to help resolve the complaint.
The good news is that businesses usually respond within 15 days to a complaint submitted through the CFPB. The goal is to get a final response in less than 60 days. You'll be notified when the company responds. Also, you'll have a chance to review this response and offer feedback to it within 60 days.
The CFPB will post information about your complaint on its public Consumer Complaint Database, as well. If you give permission, it will also publish your description of what occurred (while protecting your identity).
