What is a Consumer Protection Agency?
The Consumer Financial Protection Agency is a new federal government agency set into place to regulate the business world. It was created after the financial and economic meltdown that occurred in 2008 as a way to centralize financial transaction regulation.
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Regulations
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The Consumer Protection Agency will oversee payday loans, credit cards, mortgages, gift cards, overdraft agreements and other products. In particular, it is in place to protect the consumer against confusing financial agreements.
Rule Making
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The new agency, which is a bureau within the Federal Reserve, can create new rules to protect against predatory loans and other financial abuse. Any new rule can be vetoed by a two-thirds vote from a council that is comprised of bank regulators. This is a way to balance government control looking out for the consumer and bank regulators that look out for the financial stability of the banks.
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Disclosure
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The agency will require that all financial transactions must have concise, clear and simple disclosures. Many people get into trouble because they do not understand all points of the agreement. This disclosure also includes unified mortgage disclosure.
Credit Card Regulation
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Credit card companies are required to offer what are considered "plain vanilla" cards in addition to more complex cards. All credit card companies must provide calculations for payoff based on different circumstances.
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References
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Comments
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