Few consumers are readily familiar with the Consumer Financial Protection Bureau, but this government agency is in charge of monitoring companies that might be taking you and your pocketbook for a roller coaster ride if you ever find yourself owing money. Credit card companies, payday lenders, mortgage companies, money transfer businesses and some banks fall under the scrutiny of CFPB, which will soon have a new director, Richard Cordray. While the director of this bureau doesn’t matter as much to the average consumer as the very existence of the group. However, Cordray got the thumbs up from the The Center for Consumer Recovery, which does has a more direct impact on the average American.
This group of debtors and lenders abides by a code of conduct that keeps consumers in line and not just the bottom line of the business. Although many of the members are businessman or republicans, the founder of the Center for Consumer Recovery, Bill Bartmann, has backed the appointment of Cordray because of his history of work for American consumers. According to Batmann’s, businesses don’t have to prey on consumers, and it’s refreshing to see this attitude after so many mortgage companies and payday loans businesses have taken advantage of people.
Currently, Batmann group includes over 200 businesses that partake in buying of consumer debt. Not only does each group abide by federal and state laws that protect consumers, but the Center has its own code of conduct that further emphasizes these efforts. The code in includes five key elements that range from never filing a lawsuit to collect on credit card debt to not charging interesting against credit card users who have turned off their cards to not contacting consumers more than twice in any one day about their credit card bills. Perhaps the most important aspect of this code is that these companies will not resell accounts to others who have not agreed to the pledge, which means consumers don’t have to worry about someone else taking over their debt and making their lives difficult.
In the meantime, the Consumer Financial Protection Bureau continues to protect citizens from the government’s side. Known as a watchdog group to some, CFPB plans to help consumers who suffer from unfair credit scores or struggle with predatory student loans. Many of these efforts will help low-income families who often get caught in a vicious loan-repayment cycle. Since January, the agency has unveiled a new plan outlining seven rules for mortgage companies.
Credit cards have also been a specific focus of CFPB, which has been working with the financial industry since 2011. The agency had ruled that credit card fees could not climb higher than 25% of the user’s balance, and the department has more recently adapted this rule to apply to the first year of credit card ownership. The Consumer Financial Protection Bureau has shown willingness to listen to those within the financial sector as this move to appease banks has shown.
Consumers can also feel that their voices are heard because the group just updates its list of consumer complaints, of which about one fourth related to credit cards. According to CFPB, Capitol One has received the most complaints in regards to credit cards. Most disputes about plastic revolve around billing, and it seems that consumers don’t realize they have the right to dispute suspicious charges for up to two months. However, officials of CFPB have made it clear that this raw data must be taken with a grain of salt. Bigger institutions receive more complaints, and representative Scott Pluta encourages consumers to examine the data themselves.
Sam Jones, the author, has been examining credit card help on uSwitch.com to try and find out the best options consumers have to repair their credit problems and avoid shady practices from credit card provders.
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