If you’ve ever had a bad experience with a bank, credit card issuer or mortgage company, if you’ve ever been discriminated against when applying for credit or if you’ve ever been victimized by financial fraud or abusive practices, you should know about the Consumer Financial Protection Bureau (CFPB).

This federal agency is intended to be a watchdog for consumer rights and to help protect people and their money from deceptive or unfair practices by financial services companies.

No matter how much money you have—even if you have not suffered from fraud or deceptive practices—it’s important to understand the mission of the CFPB and learn more about how this agency can help protect your rights.

What Is the Consumer Financial Protection Bureau?

The Consumer Financial Protection Bureau was created in response to the financial crisis of 2008 and the Great Recession, when millions of Americans lost their homes to foreclosure. The financial crisis shone a spotlight on the deceptive and abusive practices of subprime mortgage lenders and prompted a new era of regulation of financial services companies, with the goal of helping consumers to better understand the risks, costs and details of various types of mortgages, credit cards and other financial products.

During the housing bubble of the mid-late 2000s and the financial crisis that followed, millions of middle class and working class Americans were offered subprime mortgages and adjustable-rate mortgages that didn’t fit their needs, and they were encouraged through deceptive advertising and predatory sales practices to buy more expensive homes than they could afford. So long as housing prices kept going up, people could keep refinancing their mortgages. But when the housing bubble burst, millions of families were suddenly faced with foreclosure and financial ruin.

The housing crisis, along with other long-standing issues of concern like payday loans, predatory lending and excessive interest and fees being charged on consumer debt, helped create momentum and shaped public opinion in favor of the creation of the CFPB.

The federal agency was formally established in 2011 under President Barack Obama and was created under the leadership of Elizabeth Warren, who was then a Harvard University law professor who had researched and warned about the predatory practices of some financial services companies and the disproportionate risks of certain types of mortgages.

Why Does the CFPB Exist?

There were already various federal regulations in place as well as agencies that are responsible for oversight of the financial services industry, but the CFPB was created with the goal of serving as a single, centralized agency that could be a more powerful advocate for consumer rights.

The financial crisis and Great Recession were powerful reminders that millions of Americans were not adequately protected against predatory lending practices and other excessive financial risks imposed upon them by bad actors in the financial services industry. Warren and her allies in Congress decided to create the CFPB to have a new regulatory enforcer to be a watchdog for consumers and to help consumers make better-informed decisions about their finances.

What Is the Purpose of the CFPB?

The Consumer Financial Protection Bureau has three primary missions, to:

  • Create rules for the financial services industry in a way that implements the law and helps maintain choices for consumers
  • Supervise financial services companies and make sure they comply with federal laws for consumer financial protection
  • Enforce the law by investigating predatory or illegal practices by financial services companies and obtaining compensation for consumers who are harmed by these illegal practices

The CFPB also offers free consumer financial education tools to help people understand their finances and make better financial choices. If you’re considering getting an auto loan or reverse mortgage, want to understand your rights while going through debt collection or want to learn more about the details and possible risks of any big financial decision, the CFPB website provides a central source of information to help you understand your options.

The CFPB also provides data and research on various consumer finance topics, such as mortgage delinquency rates, consumer financial well-being, debt collection practices and other aspects of how the financial industry is treating consumers and how consumers are faring in the world of financial services.

How Does the CFPB Protect Consumers?

The CFPB is intended to help make sure consumers get treated fairly by banks, credit card issuers, mortgage companies and other financial services firms. There are several ways that the CFPB helps protect consumers’ rights, by:

  • Enforcing laws against unfair, abusive, deceptive or predatory acts by financial services companies—such as predatory lending, excessive fees, financial fraud or other illegal acts against consumers.
  • Enforcing laws against discrimination in consumer finance—such as “redlining” in mortgage lending, or assigning higher-interest loans to people based on their race or ethnicity.
  • Taking consumer complaints and investigating complaints when people feel they have been treated unfairly by a financial services company. The CFPB keeps a consumer complaint database with a central record of thousands of complaints by consumers against financial services companies, sorted and viewable by state. The CFPB contacts each company that is subject to a complaint and requires them to respond to each one.
  • Offering financial education and an unbiased source of information to help consumers make better-informed decisions about their money. There is a detailed Ask CFPB page on the website that helps answer hundreds of common questions about money.
  • Researching how financial products are utilized by consumers and what the possible risks and downsides for consumers are.
  • Monitoring the financial services industry for possible new or emerging risks to consumers.

For more information about how the CFPB works and why it matters to everyday consumers’ financial lives, check out this video interview with Richard Cordray, former director of the CFPB and author of a new book, Watchdog: How Protecting Consumers Can Save Our Families, Our Economy, and Our Democracy.

How to Submit a Complaint to the CFPB

Do you feel you’ve been treated unfairly by a financial services company? Here are a few common situations that might necessitate submitting a complaint to the CFPB. Do you feel that you…

  • Have been unfairly rejected for a loan?
  • Have an inaccuracy on your credit report that you haven’t been able to resolve?
  • Were charged excessive interest on a credit card?
  • Were not credited for payments you made on a loan?
  • Were not allowed to close an account, or were unfairly charged extra fees after closing an account?
  • Received fraudulent treatment from a company that promised to help repair your credit?
  • Did not receive services as promised?
  • Have been billed for a product or service that you did not purchase?
  • Have been treated unfairly or harassed by a debt collector?
  • Have been victimized or targeted by a financial scam?

…or other issues?

Depending on your situation, you may be able to file a complaint and potentially receive help from the CFPB for your bad experience with a financial services company. And even if your situation does not constitute fraud or illegal activity by the financial services firm, you may be able to get your problem solved more quickly if you file a complaint.

Sometimes financial services companies don’t intend to commit fraud or cause harm to consumers; sometimes the issues that consumers file complaints about turn out to be just a simple mistake or misunderstanding. But even if it’s an innocent mistake, consumers still have the right to submit a complaint to get their issues examined and resolved with the help of this consumer watchdog.

To submit a complaint to the CFPB, visit: https://www.consumerfinance.gov/complaint/

The CFPB will contact the financial services company and work to get you a response: 97% of consumers receive a timely response; most companies respond within 15 days (the CFPB expects companies to resolve complaints within 60 calendar days). Filing a complaint is quick and easy; it usually takes less than 15 minutes to file. By filing complaints for bad experiences with financial services companies, you are helping create accountability and public information to help the financial industry serve people better.

You also can browse the public data in the CFPB consumer complaint database; you can search by company to see what complaints may have been issued against that financial services firm.

How Is the CFPB Responding to COVID-19?

The COVID-19 crisis has caused a wide array of effects in everyday life and people’s finances. The CFPB is part of the government response to the crisis from a personal finance perspective:

  • Housing assistance. The CFPB is working with other federal agencies to provide COVID-19 crisis-related mortgage relief, protection for renters and protection against COVID-19 scams.
  • Financial decision-making tools. The CFPB website has dedicated resources and information on protecting your finances during the coronavirus pandemic, including guidance for servicemembers and veterans, older adults and small business owners.
  • Crisis resources and information. The CFPB blog posts relevant articles on financial issues and concerns, such as protection for renters during the coronavirus crisis, how financial coaches and counselors can conduct virtual consultations during social distancing and what people should know about tapping their home equity to cover expenses during the crisis.

If you cannot pay your bills and need to understand your options for mortgage forbearance, avoiding eviction, getting consumer credit counseling or finding a lawyer to help with your financial issues, the CFPB website is a central repository of information and resources.

Why the CFPB Matters

The CFPB is intended to serve as a watchdog and consumer advocate. If you have been treated unfairly, suffered discrimination or have been mistreated by a financial services company, the CFPB is supposed to be on your side. One major goal of the CFPB was to help avoid another massive crisis like the 2008-2009 housing collapse. COVID-19 is a very different kind of crisis, but the CFPB still matters.

By providing good public information and accountability, the CFPB also intends to help the overall financial markets function better. When financial services companies comply with the law and do the right thing for consumers, it’s ultimately a good thing for those financial services companies, too. The CFPB is part of a regulatory framework that’s intended to create a fairer environment for both financial services customers and providers.

At their best, regulators like the CFPB help add value for consumers, maintain trust in the financial system and ensure more efficient operation of the U.S. economy. When regulators can help promote fair lending and best practices to reward good corporate citizens and punish bad actors, the government and the private sector together can help create a fairer and more prosperous country.