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Elizabeth Warren's New CFPB: It's a Start but There's Still a Long Way to Go

(10/14/10)

The new Consumer Financial Protection Bureau (CFPB), launched in July of 2010 and headed up by Elizabeth Warren, will be charged with writing some 300 plus sets of rules and regulations in order to implement and establish compliance standards for the massive 2,000 page Dodd-Frank Financial Reform Bill. In an effort to clean up the language of the original bill, yet another technical bill will be produced to supplement the original one. If the rules for compliance could be formulated within just one year, the lenders affected would likely have yet another year before they will be held accountable for complying with them. So while many changes will be forthcoming as a result of the bill, it is likely to take a minimum of two more years before any significant change is implemented. The CFPB has been assigned the enforcement responsibility for more than 15 laws including those of vital interest to the mortgage industry such as the RESPA, TILA and SAFE acts. Though the CFPB is a part of the Federal Reserve Board, it has been granted significant independence from the Fed with regards to its decision making and staffing authorities. The primary oversight of the bureau will come from a body called the Financial Stability Council which by a two-thirds vote can overrule the decisions of the CFPB. The CFPB can divert towards its own coffers up to 10% of the Fed's expenses in 2011 and by 2013 that amount will grow to 12%.

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