Bureau Milestones

Today, the CFPB released the CFPB Supervision and Examination Manual, the guide for our examiners to use in overseeing companies that provide consumer financial products and services. (more…)

One year ago, Congress passed and President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which created this new Consumer Financial Protection Bureau (the CFPB). This law establishes a single point of accountability to assure that markets for consumer financial products work for American consumers and for responsible providers of those products. On July 21, the CFPB starts this work, and it will be a cop on the beat to enforce the laws on credit cards, mortgages, student loans, prepaid cards, and other kinds of financial products and services. The purpose of this report is to summarize in one place what we’ve been up to.

The consumer bureau’s statutory obligations are designed to make markets for consumer financial products and services work in a fair, transparent, and competitive manner. This means, in part, creating a level playing field where all providers of consumer financial products and services are subject to meaningful oversight to ensure that they play by the rules. It also means creating a level playing field where both parties to the transaction – the customer and the lender – can understand the terms of the deal, where the price and the risk of products are made clear, and where direct comparisons can be made from one product to another.

Americans aren’t looking for a free ride. They expect to be held responsible for their debts and purchases. And they understand that there are consequences to not keeping up with payments. When consumers are presented with a choice between two financial products, and they know the true costs, the actual benefits, and the real risks of those products, they will be better able to make good decisions for themselves and their families. A level playing field encourages personal responsibility and smart decision-making.

Americans are looking for an honest marketplace. They want to know the costs up-front, so that they’re not blindsided by hidden fees, interest rate changes, or payment shocks. A properly functioning market relies on consumers’ getting the information necessary to make the best decision for themselves and their families. Consumers have the power to drive markets, but only if they’re provided with the basic information that lets them choose products that meet their needs and reject those that do not.

Across the country, there are responsible financial institutions offering products and services that provide real value to their customers. But finding those products in a sea of fine print and complex terms can overwhelm even the most diligent consumers.

If there is a lesson from the past five years, it’s this: We all lose when consumers cannot readily determine whether they can afford to pay back their loans. We all lose when lenders routinely sell credit in ways that hide the risks and costs. We all lose when a broken consumer credit system magnifies risks throughout the economy. We can do better.

At the consumer bureau, we will do better. Over the past year, we have built a strong foundation, and, in the years ahead, the CFPB will work hard for consumers across the country.

Sincerely,
Elizabeth Warren
Special Advisor to the Secretary of the Treasury on the CFPB

This letter also appears on page 5 of a CFPB report entitled Building the CFPB, which was originally published on July 18, 2011

Each day this week, we will feature information about an important milestone in the establishment of the new consumer bureau. Today’s post is about our transfer date. Read more of this series.

Less than two months after President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act into law, Treasury Secretary Tim Geithner announced that the one-year anniversary of the law – July 21, 2011 – will serve as the “designated transfer date” for the Consumer Financial Protection Bureau. This is the date when consumer financial protection functions of seven federal agencies will transfer to the CFPB.

The financial crisis that nearly brought the economy to its knees was caused in part by massive failures in basic consumer protections. Instead of leaving consumer protection scattered among seven different agencies, none of which had the necessary authority and focus to protect American consumers, the new law provides for one agency that is accountable for enforcing consumer laws.

With the announcement of a transfer date, Secretary Geithner set an ambitious deadline to get the CFPB up and running. On that date, the CFPB will receive many of the authorities it will need to protect families from abusive consumer financial practices. The new consumer bureau will work to make sure consumers have the information they need to make sound financial decisions for themselves and their families and to make consumer credit markets work better for all Americans. This milestone signaled to the American people a clear timeframe for when there will be a cop on the beat patrolling the markets for mortgages, credit cards, and other consumer financial products and services.

Building a completely new consumer bureau from the ground-up is a tall order, and Secretary Geithner’s announcement meant that much work would need to be done in a relatively short period of time. But the CFPB’s arrival to the regulatory scene is long overdue, and its mission is ambitious – so it was fitting for the deadline to be ambitious as well.

Each day this week, we will feature information about an important milestone in the establishment of the new consumer bureau. Today’s post is about our new HR system. Read more of this series.

The Dodd-Frank Act created the CFPB as an independent bureau within the Federal Reserve System. Many steps must be taken before the CFPB is fully operational, so Congress authorized the Treasury Department to conduct that preliminary work during this interim period. The CFPB implementation team took an important step in setting up the CFPB this week by launching its interim human resources system.

The CFPB continues to rely on Treasury to provide administrative support and to manage the implementation effort. But we have taken an important step. The launch of the interim HR system means that, for the first time, the CFPB will have employees of its own. The HR system enables the CFPB to create positions, recruit and hire personnel, and institute policies and practices designed to engage and retain staff. It also provides the infrastructure for performance management, training, recording time and attendance, and other important tasks. This system is a critical step as the consumer bureau works to build infrastructure and transfer personnel from other government agencies.

The most visible result of the new system is that the CFPB team will begin to use different job title conventions. For example, the leaders of each principal function, such as the General Counsel and the head of the Supervision and Enforcement team, will be Associate Directors reporting directly to the eventual Director of the consumer bureau. Assistant Directors will head up the working teams, such as Credit Card Markets or Fair Lending. This naming convention will provide greater clarity about the structure of the organization as we move forward.

Below is a list of CFPB leaders who are currently on the team or will be joining in the weeks ahead:

• Steve Antonakes, Assistant Director for Large Bank Supervision
• Ethan Bernstein, Deputy Assistant Director for Mortgage and Home Equity Markets
• Marla Blow, Deputy Assistant Director for Card Markets
• Leonard Chanin, Assistant Director for Regulations
• Kelly Cochran, Deputy Assistant Director for Regulations
• Richard Cordray, Assistant Director for Enforcement
• Raj Date, Associate Director for Research, Markets & Regulation
• Marilyn Dickman, Deputy Assistant Director for Human Capital
• David Forrest, Assistant Director for Consumer Engagement and Acting CIO
• Meredith Fuchs, Principal Deputy General Counsel
• Roberto Gonzalez, Deputy General Counsel
• Michael Gordon, Deputy General Counsel
• David Gragan, Assistant Director for Procurement
• Len Kennedy, General Counsel
• Zixta Martinez, Assistant Director for Community Affairs
• Patricia McCoy, Assistant Director for Mortgage and Home Equity Markets
• Holly Petraeus, Assistant Director for Servicemember Affairs
• Victor Prince, Deputy Chief Operating Officer
• David Silberman, Assistant Director for Card Markets
• Dennis Slagter, Assistant Director for Human Capital
• Dan Sokolov, Deputy Associate Director for Research, Markets and Regulation
• Corey Stone, Assistant Director for Credit Information Markets
• Peggy Twohig, Assistant Director for Nonbank Supervision
• Elizabeth Vale, Assistant Director for Community Banks and Credit Unions

Learn more about the CFPB’s organizational design.

Each day this week, we will feature information about an important milestone in the establishment of the new consumer bureau. Today’s post is about staffing up the bureau. Read more of this series.

The CFPB is a brand-new government agency, and all new things have to start somewhere. In the case of the consumer bureau, it started with several employees on an implementation team shortly after the Dodd-Frank Act was passed by Congress and signed into law by the President. Of course, the CFPB will have many responsibilities – promoting financial education, gathering and analyzing data on the consumer financial markets, and enforcing federal consumer financial laws, among others. With so many jobs to do, the CFPB needs more than just a few employees.

The arrival of the 100th team member occurred less than five months after the passage of the Dodd-Frank Act. It served as yet another tangible indication of the consumer bureau’s growth. Today, CFPB team members are hard at work on the nuts and bolts – getting computers and laptops, writing job descriptions, and building an IT platform – and thinking about policy priorities and how to design an effective enforcement strategy. As the team grows, it will take on more people who will be cops on the beat – supervising the biggest banks and the payday lenders, mortgage servicers and other non-bank financial companies.

The implementation team consists of people from a variety of backgrounds, from across the country, at various points in their careers. It also includes employees who have previously worked at many other government agencies. This is fitting, since the CFPB will consolidate consumer protection authorities currently fragmented across seven agencies.

The implementation team commemorated the arrival of the 100th team member with a potluck dessert party, which also doubled as a holiday celebration. The highlight of the party was a creative interpretation of ’Twas the Night Before Christmas, reworked to reflect the upcoming July 21 deadline, called The Night Before Transfer.

Each day this week, we will feature information about an important milestone in the establishment of the new consumer bureau. Today’s post is about our temporary home. Read more of this series.

In October, the CFPB implementation team moved out of office space spread across three buildings in and around the main Treasury Department headquarters and into offices located at 1801 L Street NW. This government-run office building in northwest Washington, D.C. will serve as the team’s temporary headquarters for the next several months.

The move served as tangible evidence of the new consumer bureau’s growth. Now, all members of the team work under the same roof. Although its current headquarters is only temporary, the team has tried to make itself at home. It gave each of the space’s conference rooms a name: Dodd-Frank (after the name of the legislation that created the CFPB); Full Disclosure (one of the CFPB’s goals for the costs, risks, and other important terms of consumer financial products and services); Accountability (another of the CFPB’s goals); and Boomer Sooner (the name of the University of Oklahoma’s fight song – a nod to Professor Elizabeth Warren’s Oklahoma roots).

The new space provides the consumer bureau with the room to continue growing and makes staff collaboration easier and more efficient. There are boxes in the hallway and a steady shuffling and reshuffling of offices as new people arrive, but no one seems to mind and the team is hard at work.