| U.S. Consumer Financial Protection Bureau | |
|---|---|
| CFPB | |
| Agency overview | |
| Formed | July 21, 2011 |
| Jurisdiction | Federal government of the United States |
| Headquarters | Washington, D.C. |
| Agency executive | Richard Cordray, Director |
| Website | |
| consumerfinance.gov | |
The United States Consumer Financial Protection Bureau (CFPB) is the federal agency that holds primary responsibility for regulating consumer protection in the United States. The bureau began operation on July 21, 2011. It was founded as a result of the Dodd–Frank Wall Street Reform and Consumer Protection Act, which passed during the 111th United States Congress in response to the Late-2000s recession and financial crisis.[1] The bureau was set up by Elizabeth Warren, who was passed over for director [2] in favor of Richard Cordray. Cordray's confirmation was delayed by Republicans in the United States Senate. On January 4, 2012, Barack Obama issued a recess appointment to install Cordray as director through the end of 2013. The bureau has become the "focus of bitter fighting" between the administration of President Obama on one side and "Republicans and banking lobbyists on the other."[3]
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The CFPB opened its website in early February 2011 to accept suggestions from consumers via YouTube, Twitter and its own website interface. According to the United States Treasury Department, the bureau is tasked with the responsibility to "promote fairness and transparency for mortgages, credit cards, and other consumer financial products and services."[4] According to the bureau's own webpage, "The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans—whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products."[5] The jurisdiction of the bureau includes banks, credit unions, securities firms, payday lenders, mortgage-servicing operations, foreclosure relief services, debt collectors and other financial companies, and its most pressing concerns are mortgages, credit cards and student loans, according to incoming enforcement chief, Richard Cordray.[1][6] It was designed to consolidate employees and responsibilities from a number of other federal regulatory bodies, including the Federal Reserve, the Federal Trade Commission, the Federal Deposit Insurance Corporation and even the Department of Housing and Urban Development.[3]
The bureau will be an independent unit located inside and funded by the United States Federal Reserve, with interim affiliation with the U.S. Treasury Department. It will write and enforce bank rules, conduct bank examinations, monitor and report on markets, as well as collect and track consumer complaints.[6]
From the outset, the organization was contested. Former Harvard Law School professor and and bankruptcy expert, Elizabeth Warren, who conceived of the idea of the bureau and was special consultant in charge of implementing it, was passed over for director after Obama administration officials became convinced she "could not overcome strong Republican opposition." [7]
On July 17, Cordray was selected over Warren as the head of the entire CFPB.[8] However, his nomination was immediately in jeopardy because 44 Senate Republicans had previously vowed to derail any nominee in order to encourage a decentralized structure to the organization. Senate Republicans had also shown a pattern of refusing to consider regulatory agency nominees, purportedly as a method of budget cutting.[9] Others have suggested that Republicans have blocked Obama's nominations at a rate that has caused him to amass a record low level of nomination successes and a long list of notable failed nominations primarily for political gain.[10][11] On July 21, Senator Richard Shelby wrote an op-ed article for The Wall Street Journal affirming continued opposition (that went back to a May 5 letter to the President) to a centralized structure, noting that both the Securities Exchange Commission and Federal Deposit Insurance Corporation had executive boards and that the CFPB should be no different. He noted lessons learned from experiences with Fannie Mae and Freddie Mac as support for his argument.[12] Politico interpreted Shelby's statements as saying that Cordray's nomination was "Dead on Arrival".[13] A Republican-led filibuster in the Senate blocked the nomination in December 2011. Due to the way the legislation creating the bureau was written, without a director the agency is not able to write new rules or supervise financial institutions other than banks.[3] Therefore, President Obama is planning on using his executive authority to appoint Cordray as a Recess appointment while the Senate is not in session. This is highly controversial as the Senate was not in recess at the time, therefore bypassing Congress. [14]
| No. | Portrait | Name | State of Residence | Took Office | Left Office | President(s) | |
|---|---|---|---|---|---|---|---|
| - | Elizabeth Warren | Massachusetts | September 17, 2010 | August 1, 2011 | Barack Obama | ||
| - | Raj Date | Massachusetts | August 1, 2011 | January 4, 2012 | |||
| 1 | Richard Cordray | Ohio | January 4, 2012 | Incumbent | |||