What is the CFPB?

“The Consumer Financial Protection Bureau (CFPB) is a U.S. regulatory agency created to oversee financial products and services offered to consumers.” The CFPB serves to protect consumers from unfair, deceptive, or abusive practices, providing the information, steps, and tools needed to make an informed financial decision and taking necessary action on those companies that break the law.

Origins of the CFPB

Following the financial crisis of 2008, the United States Government took action in response to the recession to prevent a similar catastrophe from occurring in the future. In turn, the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) was created in 2010 by the Obama Administration. The Dodd-Frank Act established new government agencies tasked to oversee the various components and aspects of the new act and the financial system in its entirety. Sectors of the financial system, including banks, mortgage lenders, and credit rating agencies, were targeted because it was believed that these organizations were the underlying cause of the 2008 financial crisis.

Within the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, the Consumer Financial Protection Bureau (CFPB or Bureau) was established. The CFPB enables consumers to understand the terms of a financial agreement before approving readily and governs other consumer lending tactics such as credit and debit cards, all while addressing consumer complaints. Under the CFPB falls Federal Regulations, including those directly shaping the fraud and dispute management process, specifically Reg E and Reg Z. The CFPB ultimately supports consumers through providing one single point of accountability for enforcing federal consumer financial laws. Since the establishment of the CFPB in 2010, the Bureau has been under three different Presidential Administrations, Obama, Trump, and Biden. Each administration has had its own goals and influences on the Bureau.