CFPB 「Know Before You Owe」 Campaign Protects Consumers


It’s hard to ignore the Pokemon Go craze. Players converge on downtown locations at 2 a.m., wander the alleys in residential neighborhoods – and enter the doors of countless businesses that see dollar signs each time a Pikachu hunter swoops in. By mid-July, the market value of Japanese gaming king Nintendo had soared by $11 billion, all of it attributed to the augmented reality Pokemon Go players.

You know who else has created $11 billion in value for ordinary people, all over America? The Consumer Financial Protection Bureau. The government agency was created five years ago as part of the overall response to the United States financial crisis, the housing market collapse and mortgage loan practices that helped to cause it. The CFPB is charged with protecting consumers who have or are seeking out mortgage loans, but also serve as watchdog on all kinds of debt, loans, and companies who make them.

The CFPB mission is to make sure that people are treated fairly by banks and other lenders. As the CFPB marked its milestone anniversary, they released some numbers. So far, the agency has handled what is now approaching 1 million complaints – to the tune of $11.7 billion in relief, affecting 27 million people.

Did a mortgage company wrongly initiate foreclosure proceedings against you, forcing you and your family out of your home? The CFPB is ready to investigate, and has taken legal action against mortgage companies who haven’t played by the rules. Does your bank charge overdraft fees, as a service that you’ve never agreed to? The CFPB legal team will fight that battle. That’s also true when for-profit colleges prey on students and pressure them into loans they can’t afford, or payday lenders use tactics meant to keep vulnerable consumers who needed short-term loans trapped in endless cycles of debt.

The CFPB won’t just target that small, auto-title loan shop that sets up in a low-income neighborhood where banks and grocery stores are harder to find. The agency stands up to credit card companies that use deceptive or unfair practices to market or bill for their products – and to big mortgage lenders too.

If you’ve never checked out the “Know Before You Owe” information packages, take a look. The CFPB initiative is designed to make sure that consumers get information, in plain language they understand, when they look at loan products. During the first quarter of 2016, Americans closed on nearly 2 million mortgage loans from companies that now are required to give them a Loan Estimate and Disclosure Form that accurately communicates the total borrowing cost in easy-to-understand terms and language.

The fight for transparency extends to student loans too. The “Know Before You Owe” products, created in partnership with the Department of Education, are now used voluntarily at more than 3,400 colleges and universities, so that students clearly see what grants, loans and conditions they can choose from.

Auto-loan shoppers haven’t been left out either. The latest “Know Before You Owe” kit has been rolled out so that consumers who are shopping for cars –and financing to buy them – understand these loans. But the one you may have heard about the most is the CFPB effort to curb some common practices in the predatory lending industry. For the 12 million Americans who need short-term help, it’s the payday loans, auto title loans, high-interest cash advances and similar products that may be their only option.

While the CFPB won’t put short-term lenders out of business, they are looking at rules that would help protect customers. The key changes include a requirement that lenders verify an ability to repay, so that predatory lenders can’t make loans to people they know are unable to pay them back – and will end up trapped by the triple-digit interest rates and high fees that turn a quick cash solution into a disaster.

The most important thing to know is that, unlike Pokemon Go, this $11 billion in consumer protections is no game. To learn more about the CFPB and how the agency helps consumers, visit the CFPB website.

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