“Although the powers that the CFPB has at its disposal are largely the same or analogous to those that other federal regulators have held for decades, there is uncertainty in how the Bureau will exercise these broad and flexible authorities, especially in light of its almost exclusive focus on consumer protection” —Nonpartisan Congressional Research Service analysis of the CFPB
back to CFPB 101

History of the CFPB

The Consumer Financial Protection Bureau is a federal agency created by Title X of the Dodd-Frank Financial Reform Act of 2010, known as the Consumer Financial Protection Act of 2010. The agency was established as part of the sweeping financial reforms intended to add additional oversight to the financial regulatory system after the mortgage crisis and recession in the late 2000s. The CFPB was created to consolidate the regulatory and oversight powers shared by seven different federal agencies into a single entity. Its broad jurisdiction, limited congressional, presidential, or judicial oversight, and a pre-determined budget funded by the Federal Reserve make it the most powerful federal financial regulatory agency.

The agency’s creation was one of the most controversial aspects of the Dodd-Frank legislation, primarily because of the new bureau’s immense powers and lack of oversight.

Under Dodd-Frank, the CFPB’s duties fall into three primary categories:

Educate: The agency must provide basic financial education to consumers.

Enforce: The CFPB is in charge of creating and enforcing regulations that crack down on practices within the financial services industry that are arbitrarily deemed “abusive.” The definition of an “abusive” practice is at the sole discretion of the CFPB.

Research: The CFPB has broad authority to gather data on millions of consumers, including account and personal information, with the intent to find trends in financial markets. The CFPB also takes consumer complaints and publishes claims consumers have made against financial service providers in its consumer complaint database.