This Little-Known Agency Has Returned $11.8 Billion to Wronged Consumers
What if there was a government office that worked for your financial benefit, but nobody knew what it did?
Tucked among the many drab office buildings in Washington, D.C., thousands of people probably walk by the Consumer Financial Protection Bureau without knowing anything about it.
You might write off the CFPB as just another alphabet soup agency where the letters don’t mean much. Yet you know that the FBI fights crime, the IRS collects taxes, and the FDA checks out new prescription drugs before they land at the pharmacy.
But the CFPB? Creditcards.com put out a poll, and 81% of respondents said they didn’t know enough about the CFPB to have an opinion on it.
The groups least likely to know anything about the CFPB were adults with a high school education or less, people with less than $50,000 in annual income and young adults ages 18-26.
Only 12% of people polled knew enough about the CFPB to have an opinion and said they approved of the bureau’s work, while 4% said they disapproved.
But What Does the CFPB Do All Day?
As Creditcards.com notes, while the CFPB works for the American people’s wallets, it’s not exactly going door to door to promote itself. When it cracks down on banks or other financial entities, the CFPB often requires them to refund money to consumers directly; it doesn’t mail out envelopes of cash emblazoned with CFPB’s logo.
So has the CFPB impacted you? Probably, even if you’ve never heard of it.
The CFPB sued student loan servicer Navient for nudging stressed borrowers into forbearance, instead of toward income-based repayment plans. Forbearance is cheaper for servicers to administer, but borrowers pay much more interest in the long run.
The CFPB fined TransUnion and Equifax after the credit reporting bureaus misrepresented credit scores, signed up unknowing customers for paid subscriptions and violated the Fair Credit Reporting Act. The agencies had to pay a combined $17.6 million to affected consumers.
When more than 800 people complained that they couldn’t access funds on their RushCard debit cards, the CFPB investigated and ordered $10 million in restitution.
And when details surfaced that Wells Fargo opened millions of unauthorized accounts in its customers’ names, the CFPB imposed a $185 million fine — $100 million of which went into the bureau’s Civil Penalty Fund, which sometimes grants payments to consumers affected by CFPB investigations.
Since 2011, the CFPB has collected more than half a million consumer complaints about financial misdeeds in its Consumer Complaint Database. It’s received so many complaints about banks that LendEdu was able to rank banks by customer dissatisfaction.
Why the CFPB’s Existence Isn’t Entirely Secure
The CFPB was created in 2011 as a soothing balm on the still-smarting burn of the 2008 economic crisis. But critics say the bureau has too much heavy-handed power.
In fact, Brett Kavanaugh, a judge on the U.S. Court of Appeals for the D.C. Circuit, once called the CFPB’s director “the single most powerful official in the United States government” aside from the president. Last October, federal judges deemed the CFPB’s single-director structure unconstitutional, although the bureau has appealed the decision.
President Donald Trump signed an executive order last month forcing financial agencies to cut back on regulations, although it’s unclear how the order includes the CFPB. The Federal Reserve funds the bureau under the purview of the executive branch, so it’s not exactly an agency in the traditional sense.
But for every critic shaking their fist at financial regulation, there’s a customer who has achieved victory against a monolith financial services company. The bureau reports returning $11.8 billion to affected customers since its establishment.
Your Turn: Has the CFPB ever helped you seek justice against a bank of financial company? Do you think it’s too powerful?
Lisa Rowan is a writer and producer at The Penny Hoarder.
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