Today Representative Dan Maffei met with constituents who have faced problems with their banks and mortgage lenders and Maffei announced what the new Consumer Financial Protection Bureau would do for them.
Representative Maffei said: "I want to thank everyone who came here today to share their stories. These constituents came to my office for help when they felt like they had exhausted all their other options, and even my office finds the banks and lenders to be consistently unresponsive. The new Consumer Financial Protection Bureau was designed specifically to protect consumers when they're taking on mortgage lenders and big banks. Instead of a patchwork of agencies and endless battles with customer service representatives, consumers are now going to have an independent government agency on their side."
A few of the constituents who shared their stories with Congressman Maffei are Laura Dzikowski, Tina Rey and Joan Valerino. Laura has tried repeatedly to get an accurate number of how much she owes on her mortgage with American Home Mortgage Servicing Inc., but has been told several different amounts. In addition, the mortgage company has ignored the court order saying she is not delinquent, and the bank's attorneys have even been sanctioned by the judge. She is trying to sell the home but because the bank won't correct her account, she is concerned the closing will be held up.
Tina just completed a loan modification from Wells Fargo that she began in March 2009. During the process, she had to continually resend paperwork and even had her modification cancelled on several occasions, forcing her to start the process over again.
Joan received a subprime "no-income" mortgage to purchase a larger house that would accommodate her mother who needed care after a stroke. She has been trying to get Chase to modify the terms of her mortgage since March 2009 but has had difficulty communicating with them and has had to resend documents repeatedly.
More information on the new Consumer Financial Protection Bureau:
Independent Head with an Independent Budget: Led by an independent director appointed by the President and confirmed by the Senate, the CFPB will have a dedicated budget paid by the Federal Reserve system.
Consumer Protections: Consolidates and strengthens consumer protection responsibilities currently handled by the Office of the Comptroller of the Currency, Office of Thrift Supervision, Federal Deposit Insurance Corporation, Federal Reserve, National Credit Union Administration, the Department of Housing and Urban Development, and Federal Trade Commission. Will also oversee the enforcement of federal laws intended to ensure the fair, equitable and nondiscriminatory access to credit for individuals and communities.
Able to Act Fast: With this Bureau on the lookout for bad deals and schemes, consumers won't have to wait for Congress to pass a law to be protected from bad business practices.
Accountability: Makes one office accountable for consumer protections. With many agencies sharing responsibility, it's hard to know who is responsible for what, and easy for emerging problems that haven't historically fallen under anyone's purview, to fall through the cracks.
Independent Rule Writing: Able to autonomously write rules for consumer protections governing all financial institutions -- banks and non-banks -- offering consumer financial services or products.
Examination and Enforcement: Authority to examine and enforce regulations for banks and credit unions with assets of over $10 billion and all mortgage-related businesses (lenders, servicers, mortgage brokers, and foreclosure scam operators), payday lenders, and student lenders as well as other non-bank financial companies that are large, such as debt collectors and consumer reporting agencies. Banks and Credit Unions with assets of $10 billion or less will be examined for consumer complaints by the appropriate regulator.
Consumer Hotline: Creates a national consumer complaint hotline so consumers will have, for the first time, a single toll-free number to report problems with financial products and services.
Works with Bank Regulators: Coordinates with other regulators when examining banks to prevent undue regulatory burden. Consults with regulators before a proposal is issued and regulators could appeal regulations they believe would put the safety and soundness of the banking system or the stability of the financial system at risk.
Clearly Defined Oversight: Protects small business from unintentionally being regulated by the CFPB, excluding businesses that meet certain standards.