CARL LEVIN: Consumer Bureau Is Off to Strong Start

Sen. Carl Levin (D), Michigan
Sen. Carl Levin (D), Michigan

By Carl Levin

Guest Columnist

When Congress passed the Dodd-Frank Act to reform Wall Street in the aftermath of the financial crisis, one of our most important steps was an attempt to help level the playing field for consumers in the complicated markets for mortgages, credit cards, consumer loans and other financial products by establishing the Consumer Financial Protection Bureau.

Just as federal agencies protect consumers from harmful food products or pharmaceuticals, the CFBP is designed to help protect consumers from abuses in financial markets. The agency is required twice a year to report to Congress on its activities, and in early September, CFPB Director Rob Cordray gave us a promising report card.

As my Senate Permanent Subcommittee on Investigations has shown, shoddy mortgage lending practices were one of the major causes of the financial crisis. Too often, lenders sought short-term profits by giving loans to consumers who couldn’t pay, or deceiving borrowers about the cost of loans, leading to the housing collapse that hurt nearly every American family. Director Cordray explained how CFPB has begun writing rules that will simplify mortgage disclosure forms, so that consumers can clearly understand the terms and costs of a loan.

Our subcommittee has also documented abusive practices by credit card companies, such as unfair billing practices and unjustified interest rate hikes. One of consumers’ best weapons against those abuses is information, and to help, the CFBP has established a database of consumer credit card complaints at

The CFPB isn’t just gathering data; it’s taking action. In addition to credit card complaints, the bureau investigates complaints about mortgages, payday loans, bank accounts, and other financial products. It works with consumers and financial companies to try to resolve those complaints. Since December of last year, nearly 5,000 consumers have received monetary relief from financial companies thanks to the CFPB complaint process.

Another important area of CFBP activity is its assistance to military families. These families are especially vulnerable to financial fraud and abuse: they are often young, making major financial commitments like a mortgage or car loan for the first time; they face the strain and separation of overseas deployments that can last a year or more; and they must regularly move from one base to another as they are transferred to a new unit.

CFPB’s Office of Servicemember Affairs is headed up by Holly Petraeus, the wife of Gen. David Petraeus, our former top commander in Iraq and Afghanistan now serving as CIA director. Holly Petraeus has crossed the country visiting military installations to help educate military families on financial issues, and to inform them about CFBP’s available services.

The bureau is testing a “Military Benefits Calculator” that estimates education benefits for servicemembers, veterans and their families. It is also assisting the Department of Defense in improving educational materials provided to military members as they transition from life in uniform to the civilian world. Another issue it is tackling is abusive payday loans, which sometimes target families on military bases. And it is working with the Treasury Department to help military families obtain mortgage modifications that can help them avoid foreclosure. The bureau is also working with banking regulators to help protect military families from abusive mortgage practices.

Student loans are another area of major concern for American families; as college costs have grown, so has the debt that students and families take on to pay for education. The CFBP is testing an online tool to help families compare the cost of various financial aid options. And it is working with the Department of Education to finalize requirements for a consumer “shopping sheet” that lenders will provide to every borrower, clearly outlining the terms of a loan.

CFPB is also putting some teeth into consumer protection rules by putting a priority on enforcement. For example, in July, the bureau ordered credit card company Capital One to refund nearly $140 million to consumers after engaging in hard-sell tactics and then refusing to cancel add-on products such as credit monitoring services. This action sent a strong signal to financial companies that they must obey the law or face the consequences.

The message for consumers is that they have a powerful agency on their side in the financial world. I hope you’ll visit the consumer bureau’s website at and take full advantage of the tools it offers to protect you and your family from unfair financial practices.

Carl Levin is the senior U.S. senator from Michigan.