Do you ever check your balance on your phone and stop to wonder whether it's safe? Who's keeping track of all the financial products, gadgets, apps, and new rules that make financial life seem so fraught these days?
Meet the Consumer Financial Protection Bureau, the government agency charged with keeping the financial world safe for consumers since 2011. The bureau got off to a rocky start when Elizabeth Warren (now a senator-elect from Massachusetts) was chosen to set up the fledgling agency—and then deemed too controversial to run it.
Many feared the CFPB—created after the financial crisis to monitor lending practices and give consumers a one-stop shop for complaints—would lose its moxie.
Now, one year after Rich Cordray—the former Ohio attorney general—took the helm at the CFPB, it’s clear that isn’t happening. True, Cordray isn’t the lightning rod that Warren was. He tends to steer clear of partisan politics. Instead, the CFPB’s initiatives are about making things work more smoothly for consumers who spend, save or borrow money. (That would be pretty much all of us.) Some goals now underway:
Helping students pay off their loans: The CFPB recently launched a “Paying for college” tool, now in beta. It helps students compare offers, manage their money during college, and figure out their repayment options after they graduate. (With more than $1 trillion in unpaid student loan debt, it’s clear that many of us can use some assistance.)
Giving moms some credit: By now, we all know that part of the reason for the financial crisis is that banks were extending too much credit. Since then, the rules have tightened up, and credit card issuers routinely evaluate whether would-be card-holders have adequate independent income and assets before allowing them to open an account. Sounds logical, except that millions of parents--mostly moms--don’t earn an independent income because they’re caring for their families. That means the new rules could catapult women back to the 19th century, when we couldn’t get credit in our own names.
In October, the CFPB proposed changes to the rules to allow companies to add accessible income as a factor in the decision to grant credit, allowing stay-at-home partners to build their own credit histories. “We believe this strikes the right balance between honoring the letter and purpose of the law without compromising consumer empowerment,” Cordray wrote for the CFPB website and the Huffington Post.
Making innovation easier: Where will the next idea like mobile payments or debit cards come from? Those are the kinds of questions CFPB’s Project Catalyst wants to answer, by helping to foster consumer-friendly innovation in the financial sector. The CFPB is aiming to make sure government regulations don’t stymie companies and entrepreneurs in terms of saving, getting access to investment capital or making smart financial decisions.
Tinkering with rules and regulations so they actually protect us, rather than making financial life more complicated. That sounds like common sense governing to us.