Richard Cordray, the new director of the Consumers Financial Protection Bureau, told CNN Money his top three priorities for the nascent agency. Regulatory fear mongers take note: the CFPB’s priorities shouldn’t pose any threat to any bank doing business in an honest fashion. Of course, perhaps that’s why they’re worried.

Progress Ohio/flickr source

According to CNN Money, the agency’s first priority is the “Know Before You Owe” campaign, which seeks to help Americans better understand consumer debt products. Last year the agency’s biggest project out of Know Before You Owe was an effort to simplify federal mortgage disclosure forms, in an effort to make home buying more transparent on the federal government’s end. 

The Know Before You Owe campaign was launched in May of 2011, and will also focus on other consumer finance products, like credit cards and student debt.

His second priority, Cordray told CNN, would be to focus on the agency’s newly-vested power to regulate nonbanks — “including student lenders, debt collectors, payday lenders and mortgage originators and servicers,” reports CNN.

This effort, which we covered last week, seeks to level the playing field for banks, which have to compete with underregulated non-traditional banking entities to provide financial services. And these underregulated players in the market are more likely to behave in predatory fashion, harming both big banks and consumers in the process.

And finally, his third priority as head of the agency will be, according to CNN, “holding financial firms accountable when their financial product takes advantage of consumers.” This power is what makes big banks nervous, says CNN, and for good reason.

Should banks find themselves in another Margin Call-type situation, where they will be forced to unload toxic assets on unsuspecting customers in an effort to save themselves, they might have to pay the consequences now that the CFPB’s powers are fully vested. The SEC opted against criminal charges, and has been seeking only fines as a way of exacting punishment.

While the transparency in lending and nonbank regulation are likely good for big banks, this third priority will keep them honest in a way that makes them nervous.

Did you enjoy this article? Yes No
Oops! What was wrong? Please let us know.

Ask a Question

  • Anonymous

    The CFPB has never presented a threat to the majority of banks that do not rely on unfair, deceptive, abusive and predatory practices as standard business strategies.  The basic premise of the Bureau has always been to level the playing field for all financial service providers — insured and uninsured — and to ensure consumers are treated fairly.  It is easy to see why the Too-Big-To-Behave, mega-banks would fight such concepts.  But it still boggles my mind that these bailout-benefactors were able to co-opt community and independent banks in their opposition. Over the last 3 years, smaller banks have paid the price for the sins of their bigger sisters.  The sins that Dodd-Frank was passed to curb.

  • cash loans

    It wouldn’t be soon enough if this agency begin to sue this banks and financial companies that are ripping people off. I really wished these agency would have had a hand in the current or proposed robo signing deal being floated. That is the worst deal that i have even seen. It is time we begin to punish this banks and force them to make good with country and the economy. It was created by the laws that they passed. The Repubs control the house, they could have voted down the onsumer agency, they didn’t. Now they want to retroactiv­ely reverse their vote by denying the agency a head. This has nothing to do with the qualificat­ions of Cordray, they’ve already said that. This has to do with Repubs trying to look good for consumers by voting for the agency then trying to kill it behind closed doors.