Entries in CFPB (3)


CFPB Unveils New Mortgage Rules to Protect Borrowers

Digital Vision/Thinkstock(WASHINGTON) -- The Consumer Financial Protection Bureau (CFPB) announced on Thursday new rules for mortgages designed to protect consumers and banks from the kind of lending that contributed to the 2008 housing collapse.

The new rules, which will go into effect next year, say people who want to buy houses have to prove they have the ability to repay their mortgages, providing complete financial information banks can verify.

"Lenders must look at a consumer’s financial information" and "evaluate and conclude that the borrower can repay the loan," the CFPB said in a statement.

"Lenders can’t base their evaluation of a consumer’s ability to repay on teaser rates.  Lenders will have to determine the consumer’s ability to repay both the principal and the interest over the long term -- not just during an introductory period when the rate may be lower," the agency added.

Lenders will have to offer loans that don't trap home buyers.  That means no more excessive points and fees, and no more "toxic" loan features like interest-only payments or negative-amortization payments that drive up the principal amount.

How much of a borrower's income can go towards paying a mortgage will also be taken into consideration.

"Qualified Mortgages generally will be provided to people who have debt-to-income ratios less than or equal to 43 percent.  This requirement helps ensure consumers are only getting what they can likely afford," the CFPB said.

The agency says under these rules borrowers won't be set up to fail and banks will be protected against lawsuits over bad lending practices.

Copyright 2013 ABC News Radio


CFPB Launches Online Credit Card Complaint Database

Hemera/Thinkstock(WASHINGTON) -- Do you have a gripe with your bank about credit cards?  Well, starting on Tuesday you can see if others feel the same way.

The Consumer Financial Protection Bureau is launching a new online database that will allow consumers to see what kind of complaints others have filed on credit card-issuing banks. Visitors will be able to search complaints by ZIP code, time and issue. They will also be able to see how banks have responded.  
The Consumer Complaint Database, which is currently in the beta stage of development, will not include personal information.


Copyright 2012 ABC News Radio


Cordray Lays Out Vision for Consumer Financial Protection Bureau

Office of Attorney General of Ohio(WASHINGTON) -- Richard Cordray made his first public appearance as the Consumer Financial Protection Bureau director Thursday, saying he was honored to serve as the bureau’s first director.

“Consumer financial products can make our lives better and create opportunities to make something of ourselves, but these same financial products can also make life harder,” Cordray said as he laid out his vision for the agency and his immediate priorities as director during a speech at the Brookings Institution.

Although Cordray has been working with the bureau since its inception last year, and was officially nominated as director last summer, his appointment became official only on Wednesday. President Obama used his executive authority to appoint Cordray while the Senate was in recess, bypassing Senate Republicans who had delayed Cordray’s appointment while demanding structural changes to the CFPB.

Opponents called Obama's appointment -- and his appointment of three new picks to head the National Labor Relations board -- an unprecedented "power grab." Senate Minority Leader Mitch McConnell (R-Ky.) said of the maneuvering, "President Obama, in an unprecedented move, has arrogantly circumvented the American people.”

But Cordray now has full authority, and plans to make “it clear that there are real consequences for breaking the law,” he said.

“Consumers deserve to have someone who will stand on their side, who will protect them against fraud, and who will ensure that they are treated fairly in the financial marketplace,” he said. “The new consumer bureau was created to make sure these things are achieved for all Americans.”

Cordray emphasized why the CPFB should matter to people across the country; that losing a job or an unexpected injury can happen to anyone, “our mothers and fathers, our sisters and brothers, our sons and daughters.”

Referring to his time working as Ohio’s treasurer at both the state and local level, Cordray said he “saw good people with good intentions drowning in debts they could not afford” and that “consumer finance had become more complicated and more risky in recent years.

“Consumers need better information about the costs and risks of borrowing, and they need to be able to comparison shop for a good deal,” he said. “Consumers also need the peace of mind that comes from knowing the deal they were promised is the deal they are actually getting, not just tomorrow, but next month and next year as well.”

In the past six months, Cordray said that the CPFB had received thousands of calls and emails from people across the country, who recounted their own stories and experiences.

“They do not expect any special favors, they just want a fair shake,” Cordray said.

Copyright 2012 ABC News Radio

ABC News Radio