Consumer Watchdog Has Been Aggressive
Columbus Dispatch (OH)
September 16, 2012
In its 14-month life, the Consumer Financial Protection Bureau (CFPB) has proven to be a formidable regulator. The agency has launched dozens of enforcement probes and issued over 100 subpoenas for data, testimony, and marketing materials from credit card lenders, for-profit colleges, and mortgage servicers. Its crackdown on the financial industry has been even more aggressive than previously thought. In response, banks, payday lenders, and credit card companies are tightening their recordkeeping and budgeting for defense attorneys. Some industries, including mortgage insurers and for-profit colleges, are pushing back against the CFPB, saying it is redefining laws and scrutinizing practices that previous regulators allowed. Still, the bureau’s aggressive approach has led to one high-profile win: getting Capital One Financial to refund $150 million in fees directly to the accounts of 2.5 million customers. The company was accused of tricking customers into buying add-on services that were marketed as free, mandatory, or more beneficial than they really were. Bureau officials are examining at least three other companies: card issuers American Express and Discover Financial Services; and Intersections Inc., which provides add-on services that many banks sell. The CFPB cannot indict people or companies criminally but instead refers possible criminal cases to the Department of Justice. However, its office of enforcement wields the threat of civil charges against violators of consumer laws involving financial services.
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