Today, the Consumer Financial Protection Bureau (“CFPB”) assumed certain powers and authorities set forth in Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act. The CFPB is tasked with implementing and enforcing Federal consumer financial laws to ensure that consumers have access to markets for consumer financial products and services, and that such markets are “fair, transparent, and competitive.” The CFPB is an independent bureau within the Federal Reserve System and headed by a director appointed by the President and confirmed by the Senate. President Obama recently nominated Richard Cordray, former Ohio Attorney General, to serve as the CFPB’s director. Mr. Cordray has not yet been confirmed by the Senate.
Once it has a confirmed Director, the CFPB will have rulemaking authority and, with respect to certain entities, enforcement authority under certain federal laws with privacy implications, such as the Fair Credit Reporting Act, Fair Debt Collection Practices Act, and the financial privacy sections of the Gramm-Leach-Bliley Act. The CFPB also will enforce with respect to certain entities consumer protection regulations already promulgated by other federal agencies under these Federal consumer financial laws. In addition, select classes of nonbank institutions will be subject to regular supervision by CFPB examiners for compliance with these Federal consumer financial laws.
The CFPB will have more limited authority until a Director is confirmed, although the full scope of this limited authority during the interim period is not entirely clear.
Additional information regarding the CFPB can be found in an alert we prepared for clients following Dodd-Frank’s passage.