In the wake of several years of consumer discontent and possible fraudulent activities, consumers have gained more protection with the introduction of the Bureau of Consumer Financial Protection. This new bureau has several functions all centered around protection for consumers. The bureau will focus on overseeing enforcement of consumer-related financial issues and the prosecution of those that fail to follow the letter of the law.
Some of the first areas to be reviewed include the alleged robo-signing of foreclosure documents. More importantly, the bureau will act to ensure that all foreclosure documents accurately reflect the true state of a mortgage. While robo-signing is questionable, the real issues were that documents were not being checked for accuracy before they were signed and submitted to the courts.
The bureau will also oversee the enforcement of credit laws where it comes to payday loans and certain credit rehabilitation offers that are questionable, if not illegal. What may interest consumers is that the bureau will also be responsible for reviewing current laws in these areas and making recommendations for changes or the introduction of new laws.
It will be interesting to see if the bureau’s consumer protection powers extend to the banks and some of their questionable practices, particularly those that led to the recent economic crisis. There are other government agencies looking into these matters as well so there is a real risk they will start to step on each others toes. However, if the consumer can gain more protection from underhand activities of financial institutions, then the credit landscape may become clearer.
What is most important is the bureau’s role in government. Consumers will finally have an advocate charged with making sure that consumer’s interests are considered when legislators consider regulatory changes for financial and related issues. That’s been a long time coming and prevent future unnecessary bankruptcies and foreclosures.
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