Consumer bureau opens – how it will protect your money

It’s been a long time coming, but it’s official there is a new acronym in Washington. The question is: will CFPB roll off the tongues of Americans as easily as FBI or FTC?

The CFPB is the Consumer Financial Protection Bureau. Congress has tried repeatedly to defund the consumer agency that will protect consumer rights in the financial world. They’ll cover issues like gift cards, credit cards, investments, and mortgages.

A Consumers Union telephone poll found 74% of consumers support the financial watchdog.

“With the opening of the CFPB, consumers now know that they have a watchdog on their side to make sure that financial companies are following the law and providing accurate and honest information. Americans clearly feel that the CFPB is needed to keep big banks and lenders in check, as our poll found that a majority of consumers support the CFPB and its mission to be a ‘cop on the beat’ that protects consumers from deceptive and dangerous practices,” said Pamela Banks, Consumers Union senior policy counsel.

According to the poll by Consumers Union, 88% or respondents thought a top priority should be holding financial companies accountable if they break the law followed by 86% wanting the agency to strengthen and enforce rules against deceptive and unfair practices by banks, credit card companies and other lenders.

Finally, 85% thought it would be a good idea to make the documents when you obtain a mortgage or other financial product easier to understand. The agency has been working on the new documents for a few months, and it’s asking for your input. The new document would be two pages that would make the terms of the loan, your monthly payments, and closing costs very obvious. If you have an adjustable rate mortgage, it will be obvious how much you could pay once the ARM adjusts.

The mortgage documents will be formatted a little differently than the chart on your credit card statement, but it will have the same purpose. It will make it simple to understand what your payments will be. Credit counselors have told me the credit card bill format changes have changed consumer behavior as it’s now black and white how much they owe, how long it will take to repay, and the amount of interest they’ll pay.

Courtesy White House

While this may sound like just another consumer agency, it will be a ground-breaking agency that changes the process when you spend your money for certain financial products. Plus, former Ohio Attorney General Richard Cordray has been tapped by the President to lead the new agency. He will go through the confirmation process, and a big issue is expected to be the power of this agency. There are still some Congressional representatives that fear this agency has too much power. I expect that issue will be debated at lenght during the confirmation hearings.

While without a formal director, the agency is moving forward. It wants to hear about your experience with credit cards and your story with consumer financial products. The website says the stories will help the agency figure out how it works to create a fairer marketplace.

Watch NewsChannel 5 at 5 to hear more about how this agency will help protect the money in your piggy bank.

Related links you may like:
Check-up on your credit
Shape your future – weigh in on mortgage forms
Round 2 – weigh in on the forms you’ll sign next time you buy a house
10 consumer reports you should check