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CFPB protects Massachusetts consumers from financial industry

July marked the five-year anniversary of the Consumer Financial Protection Bureau. Massachusetts Senator Elizabeth Warren first proposed creation of the CFPB to fight back against banks, credit card companies and other financial industry businesses who can take advantage of consumers. Not surprisingly, financial industry lobbyists tried unsuccessfully to block the creation of the CFPB.

In its first five years the CFPB has fought against exorbitant bank overdraft fees and issued rules to rein in payday lenders. It has worked to eliminate unlawful practices by credit card companies in enrolling, billing and marketing to consumers. It recently proposed new rules that would curb abusive debt collectors. It is also seeking to restrict the use of mandatory arbitration clauses in consumer financial contracts. Those clauses, which usually appear in fine print on the agreement, prohibit the consumer from suing the company in court.

According to the CFPB's director, the CFPB has made a difference because banks and other companies know there is an agency with real enforcement powers overseeing the way they treat consumers. Warren recently stated that the CFPB has returned $11 billion to consumers who were the victims of illegal and unethical practices by the financial industry.

The CFPB has done much to provide relief to American consumers who have been cheated by the financial industry, and according to Cordray it has plans to do much more. But, a government agency can only do so much. When consumers find themselves struggling with overwhelming debt, a Chapter 7 or Chapter 13 bankruptcy is often the most effective way to eliminate debt and get a fresh start financially.

Source: Washington Post, "The Consumer Financial Protection Bureau has fought banks and debt collectors," Michelle Singletary, July 30, 2016

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