The Consumer Financial Protection Act of 2010 (CFPA) created the Bureau of Consumer Financial Protection. This new federal agency will have broad powers to regulate consumer financial products and services. The secretary of the treasury recently announced July 21, 2011, as the designated transfer date when consumer financial protection functions held by other federal agencies, such as the Federal Trade Commission, will transfer to the BCFP.
The FTC is currently the primary federal agency with enforcement powers under the Fair Debt Collection Practices Act (FDCPA), the Fair Credit Reporting Act (FCRA) and other federal laws governing the credit and collection Industry. On July 21, 2011, the BCFP will have secondary enforcement authority under the FDCPA unless an entity is directly subject to the BCFP’s authority. The BCFP will also have rulemaking authority under the FDCPA and FCRA, and will have the ability to promulgate rules under those Acts.
In the intervening period, the BCFP will lay the groundwork for an efficient transfer and prepare for consumer protection activities after July 21, 2011. For instance, prior to the designated transfer date, the Bureau will begin conducting research relating to consumer financial products and services, developing its nationwide consumer complaint response center, and planning steps to implement the risk-based supervision of nondepository covered persons.
In addition to the announcement regarding the transfer date, President Obama recently announced the appointment of Elizabeth Warren as assistant to the president and special advisor to the secretary of the treasury on the BCFP. Thus, Warren will be heading up the effort to get the bureau up and running. The president has not yet appointed anyone to head the agency.
ACA International will continue to monitor the progress of the new agency and keep members informed of any changes that may affect the credit and collection industry. For more information on the BCFP and the CFPA, ACA International members can review Fastfax document #3057, The Consumer Financial Protection Act of 2010—What It Means for Your Business.