What is the Consumer Financial Protection Bureau?

Government Agency Protects Consumers Against Used Car Lenders

Consumer Financial Protection Bureau is a government watchdog agency that can help resolve used car loan disputes. (c) CFPB

Lately you may have been reading about the Consumer Financial Protection Bureau. It could make you wonder, what is it and how can it help me a consumer with a used car loan?

Here’s how the Consumer Financial Protection Bureau explains itself on its website, “The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives.”

That last sentiment is the most valuable tool. Sometimes it can be difficult to find fairness when it comes to used car financing. Some of us have difficulty telling one end from the other.

Just to go off topic for a moment, there are some great tools out there when it comes to automotive financing. Take a moment to look at this used car financing information to help yourself get off on the right foot. Test your financial knowledge before going to the dealership with the Auto Financing Tune-Up, a 15-question quiz on vehicle financing basics. I took the exam and got a couple questions wrong. One I could quibble with because of the wording, but overall it’s an informative quiz that should make you better prepared for your used car purchase.

It’s easy to submit a Consumer Financial Protection Bureau complaint through its website. You will be walked through the information you need to provide.

Once the complaint is submitted, the bureau will forward your complaint to the company and work to get a response. After we forward your complaint, the company has 15 days to respond to you and the CFPB. Companies are expected to close all but the most complicated complaints within 60 days.

Recently the Consumer Financial Protection Bureau filed an administrative order against Security National Automotive Acceptance Company. As the bureau reported, Security is an auto lender specializing in loans to service members, for engaging in illegal debt collection practices. The order requires the company to refund or credit about $2.28 million to service members and other consumers who were allegedly harmed, and pay a penalty of $1 million.

The CFPB alleged that the company:

  • Exaggerated potential disciplinary action that service members would face
  • Contacted and threatened to contact commanding officers to pressure service members into repayment
  • Falsely threatened to garnish service members’ wages:
  • Misled service members about imminent legal action

That above is just one example of what the Consumer Financial Protection Bureau can do. Here are some other statistics from the bureau, which was created in the wake of the financial scandals of 2008.

As of Oct. 1, 2015 the CFPB has handled 726,000 complaints nationally. Some of the highlights from the statistics in this month’s snapshot report include:

  • Complaint volume: For September 2015, the most-complained-about financial product or service was debt collection, representing about 29 percent of complaints submitted. Of the 23,354 complaints handled in September, approximately 6,818 of them were about debt collection. The second most-complained-about consumer product was credit reporting, accounting for approximately 4,799 complaints. Overall, the CFPB saw a 9 percent reduction in complaint volume between August and September 2015.
  • Product trends: In a year-to-year comparison, complaints about debt settlement, credit repair, and check cashing showed the greatest percentage increase. Complaints about these products, which the Bureau classifies as “other financial services complaints,” rose 97 percent from the same time period last year.
  • State information: Idaho showed the greatest complaint volume increases from the same time last year by a wide margin. The volume of complaints from Idaho rose by 59 percent, while the next largest complaint volume increase—Nebraska—rose by 44 percent.
  • Most-complained-about companies: The top three companies about which the CFPB received the most complaints remain unchanged from last month’s report. From May through July 2015, Equifax, Experian, and Bank of America were the three most-complained-about companies.

Congress established the Consumer Financial Protection Bureau to protect consumers by carrying out federal consumer financial laws. Among other things, we:

  • Write rules, supervise companies, and enforce federal consumer financial protection laws
  • Restrict unfair, deceptive, or abusive acts or practices
  • Take consumer complaints
  • Promote financial education
  • Research consumer behavior
  • Monitor financial markets for new risks to consumers
  • Enforce laws that outlaw discrimination and other unfair treatment in consumer finance