The United States Consumer Financial Protection Bureau (CFPB) officially begins work today. The new agency is charged exclusively with protecting American consumers from predatory practices by the financial services industry.
It's rare for a federal agency to have such a single-minded assignment. Most are supposed to encourage the growth and prosperity of whatever industry they oversee while also protecting consumers, ensuring safety and so forth.
Of course, the bureau is off to a somewhat shaky start. President Obama has nominated former Ohio Attorney General Richard Cordray as its new director but when, of if, Cordray will be confirmed by Congress is anyone's guess.
Republicans have vowed to fight the nomination, scrap the agency's budget and pass new legislation that would weaken its consumer focus.
Be that as it may, there's no shortage of people with ideas on what the agency should do now that it has taken off the training wheels.
The National Consumer Law Center says there are ten things the bureau can and should do right now, using its existing authority:
Stop mortgage companies from charging illegal fees, keeping sloppy records of what people owe, forcing homeowners into overpriced insurance, or rushing to foreclose before considering home-saving options.
Authority: Truth in Lending Act (TILA), Real Estate Settlement Procedures Act.
2. Overdraft and Bank Fees
Stop banks from tricking people into incurring overdraft fees, help consumers get the cheapest overdraft coverage, and provide clear information on bank fees.
Authority: Electronic Funds Transfer Act (EFTA), Truth in Savings Act (TISA), TILA.
3. Internet and Bank Payday Loans
Stop 400% internet and bank “account advance” payday loans from grabbing consumers’ wages, Social Security or unemployment benefits before families pay food or rent.
4. Prepaid Cards
Protect prepaid debit cards, a growing but unregulated bank account substitute, from identity theft, bank errors and hidden fees.
Authority: EFTA, TISA.
5. Credit Cards
Get inside the books of credit card companies to make sure they are not charging illegal fees or rate increases and help consumers shop for the best card without back-end tricks and traps.
6. Credit Reports
Force the credit bureaus to clean-up error-plagued credit reports and respond to consumers trying to fix mistakes.
Authority: Fair Credit Reporting Act.
7. Student Loans
Help students avoid expensive student loans when cheaper aid or loans are available.
8. Auto Loans
Prohibit kick-backs to auto dealers who put consumers, especially minorities, in more expensive loans and stop bait-and-switch tactics.
Authority: Equal Credit Opportunity Act, TILA.
9. Debt Collectors and Debt Buyers
Go after debt collectors who make illegal threats, harass people for debts they do not owe, and pursue zombie debt long after it expires.
Authority: Fair Debt Collection Practices Act.
10. Money Transfers
Ensure that consumers who are transferring money across the country or across the world know exactly what the transfer will cost and how much their family will receive.