July 21 marked the one year anniversary of the Consumer Financial Protection Bureau. During its first year, the CFPB has proved it is an agency of action and willing to stick up for consumers, particularly credit cardholders.
Created to enforce Federal consumer financial laws and to supervise banks, credit unions, and other financial institutions, the CFPB has already issued hundreds of millions of dollars in fines and has set up some systems that are proving beneficial to consumers.
Here are some of the major accomplishments of the Bureau's first year:
Credit Card Complaints
The CFPB created a database to take credit card complaints and made this information public on June 19. Prior to this action, there was no way for consumers to see the complaints or response rate when comparing credit card issuers.
The CFPB's database shows which issuers have had the most complaints on their cards and how specific complaints were ultimately handled. The data can be viewed online by company, consumer zip code and type of complaint.
The CFPB reviews each complaint and forwards the ones that meet its criteria to the appropriate company for review and resolution. Companies have 15 days to provide a response to each consumer complaint. Most complaints are expected to be resolved and closed within 60 days. The filer can track the progress of the complaint and dispute the resolution provided by the financial institution. If the CFPB finds possible legal violations, it will work with other parts of the Bureau to deal with the potential violation. The database does not include private information.
Through June 1, 2012, the Bureau had received nearly 17,000 credit card complaints. Billing disputes were the most common complaint, followed by interest rate issues. More than 2,000 complaints received financial compensation from the issuer to the consumer with $25 being the most common amount of compensation; the median amount was $130.
Monitoring of Credit Reporting Agencies
Beginning September 30th, the CFPB will monitor 30 of the country's biggest credit reporting agencies and try to bring transparency and public accountability to these companies. These 30 firms make up an estimated 94 percent of the industry.
This is a big step for the federal government which has never had widespread access to information about the credit reporting industry.
The CFPB will start monitoring the credit agencies in three areas: accuracy of the information received by the credit reporting companies, accuracy in assembling and maintaining that information, and the processes that govern error resolution. The Bureau will make sure the reporting and information provided by lenders as well as other companies that furnish information is accurate and reliable.
Major Enforcement Against Capital One
In its first public enforcement case, the CFPB announced on July 18 that it will make Capital One pay up to $210 million to settle charges of deceptive marketing credit card practices from some of the company's third-party vendors.
Capital One will pay between $140 million and $150 million to two million consumers as a result of the bank's telemarketers deceptively pushing such products as credit monitoring and payment protection. In addition, Capital One will have to pay fines of $25 million to the CFPB and $35 million to the Office of the Comptroller of the Currency.
Before the CFPB, consumers had little power with big banks or credit card issuers. If they had an error or dispute, it could be very difficult to get a solution or correction from a bank or credit agency. The CFPB has the enforcement power to make sure consumers are treated fairly.