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Consumer finance watchdog: a birthday, but no one comes

The Consumer Financial Protection Bureau celebrated its first anniversary without fanfare. Despite some achievements, the CFPB has yet to tackle big and sensitive issues.  

By Contributor / August 13, 2012

Americans' new consumer watchdog has turned one-year old with some notable accomplishments: helping students navigate loans and financial aid, advising consumers how to avoid credit-card fees, and fining Capital One an unexpectedly large $210 million for pressuring customers to buy credit-card add-ons. But reaction has been muted so far.

Michael Sloan

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The first anniversary of American consumers' new financial watchdog came and went without fireworks. The Consumer Financial Protection Bureau (CFPB) didn't trumpet its accomplishments. Its opponents didn't blast it for regulatory overreach. For an agency that (depending on your point of view) was either going to save consumers or bind and gag them with red tape, the silence was a little surreal.

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The delayed reaction may have something to do with the agency's late start (its director didn't take the reins until January, when President Obama used a recess appointment after fierce congressional opposition from Republicans). Maybe opponents are waiting to see how the CFPB resolves big, sensitive issues in the next few months. Or maybe it's a summer lull (the agency's first-year report is due soon).

"They've gotten off to a good start," says Claes Bell, a journalist for Bankrate, a Florida-based firm that tracks interest rates on mortgages, auto loans, and credit cards, among others. "They've created a user-friendly website and a streamlined complaint process." But "if you look at a list of things they've done to financial industries, they haven't done that much."

Since it officially began operating July 21, 2011, the CFPB has helped students navigate loans and financial aid, advised consumers on how to avoid credit-card fees, and forced Capital One to pay up to $210 million in fines and reimbursements for pressuring customers to buy or retain additional credit-card services, such as credit monitoring and payment protection. The Capital One enforcement action has drawn the most attention. Not only was the settlement a lot higher than those that other federal agencies have imposed on banks traditionally, the CFPB detailed specific violations and which policy changes the company had to make to be in compliance.

They "don't look or sound like any other federal agency that you've ever heard of," says Travis Plunkett, legislative director at the Consumer Federation of America in Washington. "They're living up to their promises."

Banking officials are leery, however.

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