Thursday is the one-year anniversary of the Dodd-Frank Wall Street Reform and Consumer Protection Act, the date when some of the law's significant consumer-friendly provisions kick in.
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The big news, of course, is the formal opening of the new bureau, focused on assuring that financial products are fair and transparent. But don't expect significant changes right off the bat.
"The CFPB is going to be a new sheriff in town. But it is going to have to check out the crime wave," says Ed Mierzwinski, a consumer advocate with U.S. Public Interest Research Group. "It is going to have to figure out what it should do first."
The CFPB will take over the enforcement of consumer financial laws from seven other federal regulators, including the Office of Thrift Supervision and the Office of the Comptroller of the Currency. It might sound as if we had a lot of agencies looking out for us, but that really wasn't the case. The primary job of some of the regulators was the safety and soundness of banks, and consumer protection seemed more of an afterthought.
One of the first things that consumers might notice is the launch of the CFPB's Consumer Response Center, to which they can complain over the phone as well as online at consumerfinance.gov. Initially, the complaint center will focus first on complaints about credit card practices.
The bureau also will begin examining the nation's 111 largest banks to make sure they are complying with financial laws.
And the new agency expects to test a new, simplified mortgage disclosure this year in several markets, including Baltimore. After that, the agency plans to tackle credit card disclosures, so consumers can easily compare products.
To exercise other elements of its mission — such as oversight of payday lenders — the agency will need a director approved by the Senate. That won't be Elizabeth Warren, the Harvard law professor who first suggested the agency and spent the past year setting it up.
Republican opposition to Warren and the agency has been fierce. On Monday, President Barack Obama nominated Richard Cordray, a former Ohio attorney general who was recruited by Warren to lead the bureau's enforcement division.
"Richard Cordray will be a strong choice for the CFPB," says Ruth Susswein, a spokeswoman for Consumer Action. But Susswein adds, "Not to take anything away from Richard Cordray, but anyone other than Elizabeth Warren is a difficult pill to swallow."
But Cordray isn't a shoo-in, given that nearly every Republican senator has vowed to block the confirmation of any director until the bureau's independence and power are clipped.
Meanwhile, another provision of Dodd-Frank will give certain consumers free access to their credit scores — the number that creditors use to decide whether to issue, say, a loan and under what terms.
Starting Thursday, anyone who uses your credit score and denies you credit or gives you less favorable terms must send you a notice along with the score used to make that decision, says John Ulzheimer, president of consumer education for the credit monitoring website SmartCredit.com. Or, if your credit card issuer has raised the interest rate based on your credit score, it, too, must provide that number to you for free.
Property and casualty insurers, landlords and utilities won't have to provide a free score if they are using a model that's tailored to their industries, Ulzheimer says.
A score also will come with as many as five reasons why the number wasn't higher so consumers can know how to improve it, says Craig Watts, a spokesman with FICO, which produces a widely used credit score.
Consumers often buy scores online, but those numbers might not be close to the ones used by a creditor. Dodd-Frank requires the CFPB to report on whether the scores differ substantially and if consumers are being harmed. An initial report is expected to be released Tuesday.