The Consumer Financial Protection Bureau has made quick work of changing the regulatory landscape in consumer finance, announcing record settlements with credit card companies, reforming student loans, and enforcing strict new standards.
In 2013, the CFPB could really show its teeth. Previously, the bureau was held back back by Dodd-Frank language that kept it from making broader changes. This year, that language expires, and full regulatory powers are extended to the bureau, which it intends to use to regulate mortgage lending, debt collection, and credit reporting.
The bureau received powers over the debt collection and reporting industries on January 3, 2013. It will have the latitude to make regulatory changes as it sees fit, likely requiring more of companies to verify the accuracy of credit reports and asking credit agencies to make it easier for consumers to field complaints and remove incorrect data. The group is also responsible for regulating the payday loan business, an industry which is under frequent surveillance by consumer advocates who shun it for its high fees and interest charges.
The Consumer Financial Protection Bureau is led by Elizabeth Warren, a leading consumer advocate in Washington D.C. Her controversial installation as head of the bureau was met with the belief that the group would be much more active in carving out new regulatory work. So far, the CFPB has been silent, noting that it would outline more of its plans for 2013 after it finalizes new mortgage rules in late January. Few expect significant changes in the credit card industry, seeing as the CFPB made it a key part of its 2012 mission.