Many consumers have discovered an ally in the Consumer Financial Protection Bureau, the federal agency designed to give credit card consumers a more powerful voice. Last week, and to the surprise of many, CFPB announced that it can now handle complaints about checking and savings accounts. If its results from the credit card side is any indication, this will be a blessing to millions.
As part of its announcement, Consumer Financial Protection Bureau Director Richard Cordray said,
Deposit accounts play a critical role in the lives of most Americans, but these products and the laws governing them are complicated …Consumers need someone on their side to keep banks and credit unions accountable – that is our job at the consumer bureau.
The agency has been very successful since it went online last July. It was established by the 2010 Dodd-Frank Act. You may recall that within five short months, the agency began handling mortgage complaints, which also proved to be a much-needed service.
Between its opening in July through February 22, the agency reported that it received more than 22,000 complaints. Most of these were in regards to complaints filed by consumers regarding their credit card companies. According to the Los Angeles Times, the agency now expects to hear complaints related to account openings and closings, balances, and the use of debit cards. Anything to do with one’s bank and banking services is fair game.
The Consumers Financial Protection Bureau works to resolve complaints between consumers and financial institutions. There’s even a stipulation that requires banks to respond to complaints within 15 days and then have it fully resolved it within 60 days. The complaining consumer who files with the CFPB given a case number to check the status of the complaint at any time.
Despite the recent announcement, the agency has already been active in investigating consumer complaints. It launched a full-fledged investigation last month into the overdraft fees charged by many banks. The CFPB is also seeking public comment on a proposed disclosure box regarding monthly fees. This is sure to receive much feedback.
That’s not the only announcement that was made by CFPB. On Friday, word spread that CFPB is now
the one-stop federal agency where all private student loan borrowers can ask questions, get information, and file a complaint about the private student loan market.
This, according to Cordray is a long overdue service. The agency even sent a letter to more than 6,000 college officials around the nation. The letter requested each let students and alumni know of the new protection guidelines.
College tuition has more than doubled since the 1980s and all too often, families turn to credit cards or loans that have outrageous interest rates. All too often, they possess incomplete or inaccurate level of understanding when they take on these financial burdens in their efforts of educating their children. These families now have someone on their side,
said an unnamed college financial advisor.
The new Private Education Loan Ombudsperson, Rohit Chopra, will oversee the new arm of CFPB. The “central element” will be a web portal that will instantly connect borrowers to lenders and loan servers through the CFPB website. Up until now, many of those lenders targeting these families were “unregulated” and were allowed to charge excessive fees and “interest rate floors, but no ceilings”. Students and/or their parents are encouraged to access the website. One goal of the new portal is to simplify the lending process.
Just as data on credit cards and mortgages is aggregated and provided to Congress, both the banking and student loan data will be.
Surprisingly, filing a complaint has been an easy process for these frustrated consumers. Many say they were doubtful that first, it would be a painless process, and second, they doubted their complaints could make any kind of difference. Soon, it was discovered a complaint could easily be filed online, by phone, mail or fax. The CFPB call centers, said Cordray, have little to no wait time and can record complaints in 187 languages, as well as from individuals with speech or hearing impairment.
It looks as though the average financial consumer can finally make more confident decisions, whether it’s a credit card, a mortgage or a student loan. No doubt, this empowerment isn’t a moment too soon.