Entries in Consumer Financial Protection Board (2)


CFPB Asks Consumers for Input on New Credit Card Contracts

George Doyle/Thinkstock(WASHINGTON) -- When the Consumer Financial Protection Bureau (CFPB) recently collected consumer complaints about credit cards, one of the overarching themes was confusion over the terms of the cards.  Whether consumers were complaining that their interest rate suddenly went up or that they were charged a penalty fee, it often came down to one thing: they didn't understand the contract.

Now, the CFPB has developed a prototype contract it thinks will simplify the whole mess.

The average credit card contract is about 5,000 words long, while the new CFPB one is a little over a thousand. It doesn't do away with the fine print, necessarily, but instead takes all of the terms of art in the contracts and relegates them to a separate "definitions" page, so the lawyers will still be satisfied.  By shunting that boilerplate elsewhere, the agreement itself can be written in plain language instead of legalese.

Inevitably, though, the new format will not be perfect or perfectly understandable. And that's where consumers come in: the CFPB is asking members of the public to weigh in on the form on its website.

While consumers voice their opinions, the new contract will also be test-piloted by Pentagon Federal Credit Union, an active credit union with credit card customers nationwide. Once smoothed out, however, the model contract is not slated to be mandatory -- credit card companies will have to opt in.

Ira Rheingold of the National Association of Consumer Advocates believes they may balk at first, but he thinks most will eventually get on board, because a credit card agreement that simply states the basics like interest rate, cash advance interest rate, and annual fee will allow consumers to shop and compare and choose the best deals.

Copyright 2011 ABC News Radio


Barney Frank Chastises GOP for Blocking CFPB Director Confirmation

Mark Wilson/Getty Images(WASHINGTON) -- Rep. Barney Frank is more than miffed about Senate Republicans blocking the confirmation of Richard Cordray to head the Consumer Financial Protection Board.

In a Friday Op-Ed the Massachusetts Democrat accused Republicans of “blatantly distorting the Constitution” because they have vowed to block any CFPB director nominee from being confirmed, regardless of the nominee’s merits.

“We’re going to see an extraordinarily qualified administrator of an important consumer protection agency be trashed by the Senate Republican minority because their primary goal is to ensure that financial institutions are not troubled by what they may see as an excessive concern for consumer fairness,” Frank wrote in the Washington Post op-ed.

“It is the legislative equivalent to an arsonist having set a fire and objecting to a building’s inhabitants using the fire exit,” he added.

The CFPB was created in response to the sub-prime mortgage crisis as a way to prevent unsound lending practices and avert another financial crisis. Frank was one of the authors of Dodd-Frank financial reform bill which created the CFPB.

Before the president named his nominee to lead the CFPB, 44 Senate Republicans sent a letter to Obama saying they will not confirm any nominee until the board’s structure is revamped.

Republicans have been staunchly opposed to the board and to many of the Dodd-Frank provisions. In the letter, they specified that they want to scrap the board’s director position altogether and instead diffuse power through a panel of directors. They also want any CFPB regulations to be approved by bank regulators before taking effect.

But the president has said he will veto any changes to Dodd-Frank or restructuring of the CFPB.

Sen. Richard Shelby, R-Ala., who signed the letter, told ABC News in July that Senate Republicans are “not going to budge and we shouldn’t.”

“We fought it last year. We’re going to continue to fight it,” Shelby said.

Frank wrote that the Republicans were waging a “war on financial regulation” and that Cordray’s confirmation was “collateral damage.”

“Senate Republicans are not entitled to use the confirmation power as a bludgeon to get their way when they cannot do so through the normal legislative process,” Frank wrote.

Copyright 2011 ABC News Radio

ABC News Radio