What is the Consumer Financial Protection Bureau?

The Consumer Financial Protection Bureau (CFPB) is a federal regulatory agency whose mission is to protect consumers from harm caused by unfair, deceptive or abusive practices from financial companies.

The CFPB works to educate consumers about types of financial products and services, and it enforces federal laws by fining financial companies that it deems have participated in illegal activities.

Institutions the CFPB supervises include banks and credit unions with assets over $10 billion, as well as nonbank mortgage originators and servicers, payday lenders and private student lenders.

When it comes to banking, the CFPB has taken action against banks when it determines they have charged illegal overdraft fees. It has also fined banks for things like opening accounts without customers’ permission and failing to credit full deposit amounts to accounts.

What is the CFPB?

The CFPB is the government agency responsible for enforcing consumer financial laws and serving as a consumer watchdog when it comes to financial products.

The agency imposes fines on financial companies it determines are violating the law. Through such fines, billions of dollars have been returned to affected consumers, according to the CFPB website.

The CFPB also has staff devoted to taking consumer complaints about issues in the financial marketplace. Staff members assemble the details of a complaint and then seek a resolution by communicating directly with the company named in the complaint.

History of the CFPB

The CFPB was created in 2010 under the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act). Passed during the Obama administration, the Dodd-Frank legislation sought to make the U.S. financial system safer for consumers by helping to prevent the type of acts that led to the financial crisis of 2007-2008.

The global crisis occurred when the subprime mortgage lending market collapsed. At this time, the bubble burst that had been created due to risky lending practices. Parties considered responsible for the crisis include banks, investment banking firms, insurance companies, lenders and credit rating agencies.

Before the CFPB existed, consumer protection responsibilities fell under seven different federal agencies. The CFPB brings all aspects under a single director who is appointed by the president of the United States.

The agency is currently run by director Rohit Chopra, and its divisions include:

• Operations
• Consumer Education & External Affairs
• Legal
• Supervision, Enforcement & Fair Lending
• Research, Monitoring & Regulations

Banks fined by the CFPB

The CFPB has fined various banks for charging what it deemed “illegal surprise overdraft fees,” which consisted of charging overdraft fees even after indicating to customers their account had sufficient funds at the time a transaction took place.

• Wells Fargo: In 2022, the CFPB fined Wells Fargo $3.7 billion for mismanagement of auto loans, mortgages and deposit accounts. The fine included $205 million for “illegal surprise overdraft fees.”
• Regions Bank: The CFPB ordered Regions Bank to pay $191 million in 2022 for charging “illegal surprise overdraft fees” between August 2018 and July 2021.
• TD Bank: In 2020, the CFPB announced TD Bank would pay $122 million in fines and restitution in a settlement regarding the bank’s marketing and sale of an optional overdraft service. The agency said the bank illegally charged overdraft fees for ATM and debit card transactions without obtaining consumers’ affirmative consent.

How the CFPB can help you

If you feel you’re the victim of a financial scam or other unfair practices, and you’ve contacted the company involved directly without a reasonable answer, filing a complaint with the CFPB could be your next step.

Once you submit your complaint, the CFPB will send it directly to the company. Companies usually respond within 15 days, according to the CFPB. The agency also publishes information regarding your complaint (without identifying you) in its consumer complaint database.

The CFPB says that every week it sends more than 10,000 complaints to companies for their responses. It also forwards complaints elsewhere, when it feels another agency would be better suited to assist in a complaint.