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What is the Consumer Financial Protection Bureau?

This agency protects you from shady financial practices.

Yahoo Personal Finance· Reuters
6 min read

If you experience discrimination, abuse, or deception when working with a financial institution, the Consumer Financial Protection Bureau (CFPB) may be able to help.

This government agency was formed to protect your rights and educate consumers about financial products and services. While you may not be familiar with the CFPB, chances are you can benefit from its work.

Continue reading to learn more about the CFPB, how it can help you, and what the future holds for the agency.

The CFPB is a government agency that protects consumers from harmful financial practices. The agency began operations in 2011 in response to the Great Recession, when millions of homeowners were suffering the consequences of a loosely regulated mortgage industry.

The CFPB carries out several functions and responsibilities, all with a focus on making “consumer financial markets work for consumers, responsible providers, and the economy as a whole.” The CFPB’s goals include educating and protecting consumers and enforcing fair financial laws, which it does through several means:

  • Mitigating unfair practices by writing rules, enforcing the law, and supervising financial companies

  • Enforcing laws that outlaw discrimination

  • Receiving consumer complaints and compiling them in a Consumer Complaint database

  • Educating consumers

  • Researching consumer experience with various financial products

  • Monitoring the market to better prepare consumers for potential risk

The CFPB contains seven divisions, each of which reports to either the agency’s director or deputy director. These divisions include Operations; Consumer Response and Education; External Affairs; Legal; Supervision, Enforcement and Fair Lending; and Research, Monitoring, and Regulations.

The CFPB’s mission is “to regulate the offering and provision of consumer financial products or services under the Federal consumer financial laws, to enforce federal consumer financial law fairly and consistently, and to educate and empower consumers making financial decisions.”

But what does this mean for you as a consumer?

It could mean having access to free financial education, receiving compensation after being exploited by a financial institution, paying fewer junk fees, and more. The CFPB helps you and others by doing the following:

  • Providing educational resources and tools. Consumers can access a wide array of educational content on the CFPB’s website or by downloading guides or worksheets. Content covers topics such as credit, debt, mortgages, banking, and loans. In addition to providing this information, the CFPB offers tools you can use to track your spending and debt, budget, plan for retirement, and more.

  • Offering personalized help. If you need individualized attention regarding your finances, the CFPB can connect you with someone who can help. The agency can help you choose a credit counselor or find a housing counselor, for example.

  • Enforcing consumer financial laws. The CFPB protects consumers by warning companies that violate the law and holding them accountable. For example, the agency took action against Wells Fargo in 2022 for wrongful charges and illegal actions, ordering the bank to pay more than $3.7 billion in customer compensation and penalties.

  • Implementing new rules. Based on research and public input, the CFPB implements rules to promote fair financial services and practices. For instance, as part of an initiative to curb excessive junk fees, the agency recently finalized a rule to cut typical credit card late fees from $32 to $8.

  • Researching and collecting financial data. The CFPB performs research into a range of financial topics, from mortgage lending to credit card trends. The agency then uses this data to inform how it can better serve consumers and monitor what’s happening in financial markets.

  • Collecting consumer complaints. If you’ve been mistreated by a financial institution, you can file a complaint with the CFPB. The CFPB helps you get a response from the company and compiles complaints in its database for other consumers to reference.

Read more: 7 common banking scams (and how to avoid becoming a victim)

One important way the CFPB helps consumers is by collecting complaints about financial companies. Receiving these complaints helps the CFPB prioritize initiatives, helps you get a response from the company, and informs other consumers about potentially harmful practices or companies within the financial industry.

Filing a complaint online with the CFPB takes about 10 minutes. You can do so with the following steps:

  1. Reach out directly to the company you’re complaining about.

  2. If you can’t reach the company on your own — or they don’t respond — prepare to submit a complaint. Gather any documentation or information you have pertaining to the incident.

  3. Go to consumerfinance.gov/complaint. You’ll need to create an account the first time you visit this site.

  4. Once logged in, you can begin submitting a complaint. Describe what happened with as much information detail as possible, since you usually can’t submit another complaint on the same topic. You can also upload any supporting documentation you have.

  5. Once you submit your complaint, the CFPB will forward it to the company. They may also forward the complaint to another government agency if there’s one that’s better suited to help you.

  6. The CFPB will keep you updated on progress if the company takes longer to respond than normal — typically, this means more than 15 days.

  7. If you’re waiting for a response, you can check the status of your complaint online. Once the CFPB receives a response, they’ll let you know. You’ll then have the chance to review it and submit any feedback.

  8. Finally, you can choose to let the CFPB publish your complaint anonymously in the Consumer Complaint Database.

While submitting a complaint online is the fastest way to go, you can also do so over the phone.

Over the past several years, the CFPB has been under fire for the way the agency receives its funding. Unlike most federal agencies, the CFPB receives funding through the Federal Reserve System rather than annual appropriations. In October 2023, a case was argued at the Supreme Court over the constitutionality of the agency’s funding. In May 2024, the court ruled in favor of the CFPB and its existing funding structure.

However, that doesn’t mean the agency’s future is guaranteed. A Supreme Court ruling in 2020 made it easier for the president to remove the agency’s director at any time, meaning the agency could be subject to a higher degree of political pressure.

Despite these potential threats to its structure and agenda, the CFPB seems to be carrying on as usual. At the beginning of 2024, the agency announced it was expanding its capacity for enforcement. And in a statement issued by the CFPB in response to the May 2024 Supreme Court decision, the agency says it will “continue carrying out its vital consumer protection work.”