Editor’s Note: This is the third in a series of articles about the U.S.’s landmark financial reform legislation.

The U.S.’s sweeping federal financial reform legislation created the Consumer Financial Protection Bureau to oversee financial products and services, including credit cards, mortgages, payday loans, private student loans, credit bureaus and debt collection.

“This is the first time that one federal agency will be responsible for financial consumer protection,” says Debra Pankow, North Dakota State University Extension Service family economics specialist.

The bureau will be an independent entity housed in the Federal Reserve with its own budget and director and authority to take action to prevent or correct financial abuses. It will include several new offices and units, including the offices of Financial Education, Fair Lending and Equal Opportunity, Financial Protection for Older Americans and Service Member Affairs; Private Student Loan Ombudsman; and community affairs and research units.

The bureau’s responsibilities include:

• Writing rules for financial products and services
• Enforcing rules on the largest banks and credit unions (those with $10 billion or more in assets)
• Writing rules requiring consumers be provided with complete and understandable information on the costs, benefits and risks of the financial products under the bureau’s control
• Creating consumer protection rules to prohibit specific practices that the bureau considers unfair, deceptive or abusive
• Establishing a consumer complaint system with a toll-free phone number, website and complaint database. The bureau will collect, investigate and respond to complaints; set up procedures for a timely response to consumers; and monitor companies’ efforts to resolve complaints.
• Enforcing consumer protection laws such as the Truth in Lending Act, Real Estate Settlement Procedures Act, Home Ownership and Equity Protection Act and Home Mortgage Data Act
• Overseeing car dealers who do their own financing (providing direct loans to vehicle buyers) and auto financing companies
• Writing rules affecting mortgage down payments and disclosures; loan modifications; credit card rates and fees; bank overdraft programs; credit score usage; and eligibility for student loans, credit cards and prepaid cards
• Imposing fines on companies and requiring them to repay wronged consumers
• Rescinding consumer contracts
• Filing lawsuits against companies that violate the bureau’s rules
• Adopting federal rules that mirror states’ action when a majority of states enact consumer protection rules for a specific product or service

For more information about the new legislation, the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, visit http://capwiz.com/consumeraction/utr/1/BCEUNBBVVE/IOYINBBVWF/5657733786/.

NDSU Agriculture Communication