What You Need to Know About the CFPB

February 20, 2017
Andrew Cove

The Consumer Financial Protection Bureau (CFPB) was created by the Obama administration in 2011. It was first formed as a response to the financial crisis and recession, and since then it has served to protect consumers of financial products. The Bureau enforces federal laws that apply to banks, credit unions, payday lenders, debt collectors, and other financial companies. Telemarketing companies should also be aware of the Bureau, as it also enforces laws like the Telemarketing Sales Rule (TSR) and the Consumer Financial Protection Act (CFPA).

The responsibility of consumer financial protection was previously shared by seven different federal agencies. The CFPB was established to consolidate these agencies, gaining the tools and the oversight to effectively regulate financial companies across the nation. As a single regulating authority, the Bureau can more efficiently respond to new dangers in the market and take a more active role in protecting consumers.

According to the CFPB website, the Bureau aims to empower consumers, enforce the law, and educate the public as well as financial companies. It has the authority to shape and enforce federal consumer financial protection laws and like the Federal Trade Commission, to defend consumers against “unfair, deceptive, or abusive” practices. It also helps to sustain a transparent market that depends on consumers’ ability to compare products and accurately assess the costs, benefits, and risks associated with each. To that end, the Bureau also collects complaints from consumers and conducts its own research to monitor the emergence of new risks.

The Bureau encourages businesses to clarify the language around lending and financial aid. They have already made some changes to the way companies create disclosure forms and agreements for products like mortgages, student loans, and credit cards. By eliminating technical jargon, highlighting the risks and benefits, and simplifying the forms, they encourage consumers to make informed decisions. The CFPB has also created several personal finance tools to help the average consumer understand financial matters in plain language.

While the Bureau’s rules may seem imposing, they serve to weed out unscrupulous practices and level the playing field for honest businesses. It promotes fair, responsible competition among honest companies, allowing them to focus on the quality of their products and services.

With that in mind, telemarketers can protect themselves from the Bureau’s discerning gaze by making sure they are honest and straightforward with their customers. It’s critical that they consider the language they use to describe the products and services they offer. Can the customer understand exactly what is being offered, and what risks or benefits come with the purchase? Because the CFPB has such broad jurisdiction, it has the ability to enforce laws like the TSR, and complaints often end up in their hands.

If you want to give yourself the best possible protection against action from the CFPB, you should consult a telemarketing attorney. The knowledgeable lawyers at Cove Law are well-versed in all aspects of the Bureau’s activities and enforcement capabilities. Contact us to obtain professional assistance with all of your legal needs.

Andrew Cove
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