The Consumer Financial Protection Bureau to manage non-bank financial providers

Despite resistance from Senate Republicans, the United States Consumer Financial Protection Bureau (CFPB) is preparing to open doors next month. The bureau which is the result of last year's Dodd-Frank Act, is seeking input as to which financial businesses it has to manage on top of banks. The paydayloan sector may be looking at more rules from the agency shortly.

Bureau to police the consumer financial sector

Banks with more than $10 billion in assets will be regulated along with non-bank providers of student loans and payday lenders. That is what the bureau will do under the 2010 Dodd-Frank Act. What other "large participants" of financial markets covers has not been stated in the act.

Dodd-Frank Act begins

It is clear that the Dodd-Frank Wall Street Reform and Consumer Protection Act is something that has been signed into law. It was signed on July 21, 2010 by President Obama. The law seeks to manage the financial services market to an unprecedented degree. The White House adviser Elizabeth Warren was used to help create the Consumer Financial Protection Bureau under it. The stated mission of the bureau is to "make markets for customer financial products and services work for Americans - whether they are applying for a mortgage, choosing among credit cards, or using any number of other customer financial products."

"Consumers deserve the peace of mind that financial businesses - both banks and non-banks - are following the rules," Warren explained. The bureau has until July 2012 to determine which industries will be regulated and in what ways.

Considering other sectors to view out for

There were several "larger participants" that might be targeted, the bureau said in a statement on Thurs. Those include consumer credit and related activities, consumer reporting, check-cashing, money transmitting, debt-relief services and prepaid cards. The bureau has been attempting to choose which sectors to oversee also.

Attempting to stop the bureau from starting

Capitol Hill conservatives have been against the bureau from the beginning. U.S. Senate Republicans have said they will block everyone the president states should be the director while the bureau cannot really start doing anything until there's a director. The bureau, however, is continuing to lay its foundation for the scheduled opening on July 21.

Bureau not for banks

Bank lobbies have also opposed the creation of the bureau, arguing that it's going to lead to fewer loans and less financial choices for consumers. The economical growth can be slowed by it, they say.

Citations

Reuters

reuters.com/article/2011/06/23/financial-regulation-cfpb-idUSN1E75M0X820110623

Advisor fyi

advisorfyi.com/2011/06/consumer-financial-protection-bureau-ready-for-launch/

Fox

foxbusiness.com/industries/2011/06/23/consumer-bureau-identifies-markets-that-could-face-scrutiny/


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