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[Excerpted from Tara Siegel-Bernard's story in the New York Times: Federal Consumer Agency Ponders Its Next Crusades.
The Consumer Financial Protection Bureau, which has already overcome considerable political resistance, has managed to pack some punches in the last few months on behalf of the purchasing public it represents.
In December, the agency ordered refunds by major companies for misleading business practices: American Express, more than $59 million; GE Capital Retail Bank, up to $34 million. A joint settlement with Ocwen Financial totaled about $2 billion. The list goes on.
And on Friday, new mortgage rules and consumer protections went into effect that were part of the financial overhaul bill that created the agency, which opened its doors just over two years ago.
Yes, there’s a new sheriff in town. But the true test of the consumer watchdog’s mettle will be in the year ahead, when the agency is set to take on several thorny issues that are likely to draw more resistance from the financial services lobby and give more impetus to Republican opponents in Congress who continue to try to reduce the bureau’s power.
[...] “If there’s one issue that consumer groups are really upset about it is the rising use of binding mandatory arbitration, which the Supreme Court has unfortunately blessed in a number of recent cases,” said Adam Levitin, a Georgetown law professor, who sits on the agency’s advisory board, an unpaid position.
Ed Mierzwinski, consumer program director at the United States Public Interest Research Group, said this might be the single most important issue on the agency’s agenda. “The biggest thing we are hoping for in 2014 is to finish or at least make major progress with the arbitration rule and ban forced arbitration in consumer contracts,” he said. “In many of these cases you are ripped off for $10 or $100 each. But millions of consumers are ripped off. That’s why we think it’s a very big deal.” [...]
CREDIT REPORT DISPUTES Disputes over the big three credit bureaus’ process for fixing errors on credit reports are well known. But now that the consumer agency has broad authority to perform on-site examinations, check records and examine how disputes are handled, consumer advocates hope improvements will be made. “None of the three have been fined for sloppy practices or ignoring consumer disputes,” said Mr. Mierzwinski.[...]
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