Couples and the Consumer Financial Protection Bureau

by TTMK on August 16, 2012 · 1 comment

The following is a guest post from Christian Losciale, a staff writer for Smart Military Money, a personal finance site dedicated to educating veterans, service members and their spouses. 

A new federal agency is taking action. Earlier this month, the Consumer Financial Protection Bureau ruled that Capital One must refund 2 million customers a total of about $140 million.

But that’s not all the bureau,which spawned out of the Dodd-Frank Act, has on its plate. In the last few months, it has made headlines in a number of ways. Take a look at what it’s been up to and how it could affect consumers, couples included, nationwide.

Monitoring credit reporting firms

The CFPB will start making on-site visits to about 30 credit bureaus starting September 30. Equifax, Experian and TransUnion are included and the CFPB will make sure all these firms comply with laws.

Richard Cordray, the consumer bureau’s director, said consumers have complained about trying to fix theerrors on their credit reports when they discover the inaccuracies. Thesemistakes can cause consumers to be denied credit, which can be especially distressing for couples if one partner has to carry all the credit because the other’s score is hindered by an error. The CFPB’s goal is to reduce the number of errors in reports that cause credit denials.

New mortgage forms

Cordray has said that buying a home is likely the biggest investment consumers willmake. It follows that earlier this month (July) the CFPB proposed simpler mortgage forms that borrowers would fill out after they apply for a loan but threedays before they close on the deal.

Two forms—a “loan estimate” form anda “closing disclosure” form—would give couples an understanding of what a home loan really costs. Basically, the forms should eliminate any surprise costs.This is a huge boon for couples that know what they can afford as the forms would help them project their expenses.

Complaint database

In June, the CFPB started releasing information based on consumers’ complaints about credit cards. Before it publishes a complaint to the database, the bureau checks that the consumer who filed it actually had a problem with the company in question.

Since it is free and public, the complaint database is at any consumer’s fingertips. Couples can learn which banks and credit unions are giving consumers the most headaches. You could even file a complaint if a financial institution is giving you trouble.

Prepaid debit cards

As a form of checking account alternatives, more prepaid debit cards arehitting the market. The CFPB took notice. Prepaid debit cards fill a void for consumers who aren’t eligible for a standard checking account.

More often than not though,prepaid cards are riddled with fees for basic services such as loading the cardwith cash or checking your balance. The bureau has held forums with consumeradvocates and prepaid card industry representatives. Within the next year, theCFPB will likely enact disclosure requirements, fee regulations or both.

Frugal couples or couples with joint accounts should take a cue from the bureau. There are plenty of prepaid cards for which you can shop, but beware of the fees attached. Besides, if you already have a checking account, you likely don’t need a prepaid card.

On the whole

Consumers will continue to pay more attention to the CFPB as its attempting to serve in their best interests. Only time will tell how effective it can and will be, but if its recent punishment for Capital One’s wrongdoing is any indication the bureau will stand by consumers, even if that means cracking down on the biggest names in the financial world.

{ 1 comment… read it below or add one }

Paul @ The Frugal Toad August 17, 2012 at 7:36 pm

When we refinanced our mortgage I asked the brokers to fax me a copy of the closing cost disclosure statement. If I did not get one or they faxed me something else, I knew the broker was not reputable and crossed them off my list.

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