Posts from March 2011

One of the most popular features on this site is an interactive copy of Elizabeth Warren’s calendar, which includes an RSS feed and the raw calendar data. We think it is already the richest, most detailed leadership calendar that a .gov web site has offered to date, and we hope to make it even better. Today, we want to share a bit of the work that goes into creating and updating this tool.

The calendar was a high priority for the web site launch. The question wasn’t if we would provide Professor Warren’s full calendar, but how. We figured the effort would be smooth sailing from there.

We were wrong. We learned very quickly why interactive leadership calendars are rare: they’re hard. Getting this calendar from Professor Warren’s computer to the web takes a lot of planning, technical work, and ongoing maintenance.

The calendar Professor Warren uses on a day-to-day basis is maintained in a desktop application. Fortunately, that application lets you save a calendar as an .ics file, a standard calendar format that many applications can interpret. (A key component of openness is using open, cross-compatible data formats when possible.) At the end of every month, we save a copy of that month’s events as an .ics file. That lets us work with the calendar without altering the original.

The next step is the redaction process under the Freedom of Information Act. Any given month contains several events with information that may be personal or pre-decisional. For example, if Professor Warren interviews a job candidate or has dinner at someone’s home, we must remove the candidate’s name or the address of the home. Such redactions are noted on the calendar as “REDACTED”. Clicking on the event will give you more information about the nature of the deleted information.

We save the redactions back to the source file, a step that is much harder than it sounds. This way, the modified file can be moved to an internal testing, or “staging,” version of our web site. This test is the most labor-intensive task of the whole process. We triple-check that the information we’re about to put online contains no personal information. We can’t be certain unless we check the raw source file; combing through that metadata is quite a chore. To give you an idea of what we’re looking through, the image below is an example of what that data looks like.

Going through this process just once was enough to give us a new appreciation for open government projects. This is painstaking work, and it took us weeks to figure out the process. Each cycle has taught us lessons that streamline the workflow, cutting the process down and increasing our efficiency.

Yesterday, we added February’s calendar to the December and January calendars we posted earlier. We have also back-filled the calendar with October’s and November’s events. We hope the calendar can serve as a starting point for more open government initiatives as we continue building this consumer bureau.

Last week, Professor Warren testified before Congress on our progress in building the consumer bureau. She talked about the many ways in which the CFPB is accountable to Congress, and to you, the public we’re here to serve.

From her testimony:

“The CFPB was designed to increase accountability by consolidating into a single agency the core consumer financial protection functions that had existed across the federal government. Under the old system, seven different federal agencies were responsible for consumer financial protection. Those agencies had other responsibilities as well and consumer financial protection was not anyone’s top priority. The tangle of seven agencies failed to create effective rules and left gaping holes in oversight. There were also basic problems of accountability. Because it was no one’s primary responsibility, it was more difficult to hold any single agency accountable. The CFPB will be directly responsible to the public for performing those core functions. Accountability was a central policy rationale for the establishment of the CFPB, and it is essential that the CFPB be accountable for its efforts moving forward.”

Read the entire written testimony.

We’re looking for highly motivated individuals who want to make a difference and be part of an important mission: helping consumers. The Consumer Financial Protection Bureau is a brand-new 21st century agency with responsibility for making markets for consumer financial products and services work for Americans. To help carry out that mission, we will supervise the largest and most complex banks, thrifts, and credit unions in the country, along with different types of non-bank consumer financial services companies. CFPB examiners will be responsible for conducting examinations at these organizations to ensure that they comply with Federal consumer financial protection laws and regulations – including laws prohibiting unfair, deceptive, abusive, or discriminatory acts or practices – and that they operate their compliance management programs responsibly.

While we are still in the process of making final determinations about how many examiners we will eventually bring on board, here are some things you should know:

Where will the examiners work?

Examiners will travel to conduct on-site examinations. Since they are frequently on the road, they are generally allowed to live wherever they like. Other work will be conducted from an examiner’s home and at the CFPB’s regional hub locations. We will be particularly interested in candidates from the areas of New York, San Francisco, and Chicago, as these will be our regional hubs. There will also be opportunities at our headquarters office in Washington, D.C.

What are the qualifications?

We are looking for a broad range of skills and experiences. The most important attributes will be strong analytical and communication skills, a strong work ethic, and a commitment to consumer protection. We encourage everyone from seasoned examiners to recent graduates to apply.

Where can someone apply?

Interested candidates should visit our Jobs page to learn more and submit their resume.

Peggy Twohig is Assistant Director for Nonbank Supervision. Steve Antonakes is Assistant Director for Large Bank Supervision.

This week, I’ll be headed to Capitol Hill to testify before the House Financial Services Subcommittee on Financial Institutions and Consumer Credit. I’m looking forward to testifying on our progress in building the CFPB and highlighting our efforts to promote openness and accountability.

The timing couldn’t be better: it’s Sunshine Week, a national effort focused on openness in government. This consumer bureau belongs to the public, and we’re building it right out in the open – there for anyone to see.

When I first joined the CFPB implementation team, I wanted everyone to know what we were up to, so I decided it was important to post my monthly calendar online. Everyone can see who I am meeting with in the course of building the CFPB. My calendar includes meetings with Members of Congress, consumer groups, financial companies, small business advocates, and many others.

In December, we began sharing a draft organizational chart of the new bureau with members of Congress and the media. When we launched our website in February, we included this chart as a feature. We have also added profiles of people who are leading some of the CFPB’s efforts and provided updates on our progress and current priorities in hiring. Last week, we posted online correspondence between the consumer bureau and Congress. In the coming days, we’ll post our first public quarterly spending report.

We know there are plenty of good ideas out there for making the CFPB even more accountable to the American people. That is one reason we have planned a roundtable in April with open government advocates and some of the individuals and groups who have made requests about the CFPB under the Freedom of Information Act (FOIA).

During Sunshine Week and beyond, the CFPB will work to shed light on the markets for consumer financial products and services, as well as the steps we’re taking to build an agency that is fully accountable to American families. It’s always sunny here at the consumer bureau.

Last month, one year after the date that many CARD Act provisions took effect, the CFPB held a conference on the credit card marketplace. Credit card issuers, credit rating agencies, academics, consumer groups, and federal agencies were all represented. Eight attendees delivered presentations providing a time series look at market changes.

The CFPB has summarized what we learned at the conference with these CARD Act Conference Takeaways. Click through for more detail and to see the actual conference presentations, but here are the basics:

1. Prior to the CARD Act, there was a wide gap between the initial stated interest rate for a credit card and the actual cost of the credit over time. The CARD Act curtailed certain practices in the credit card industry that created unanticipated costs for consumers. The result has been more transparent pricing: while front end pricing has increased, the overall cost of credit has not.
2. In 2010, industry income as a percentage of card balances was higher than pre-CARD Act levels. This reflects primarily an improving economy and resulting lower loss rates. That in turn has enabled issuers to release some loss reserves they had set aside to cover expected losses.
3. In 2007, issuers heavily marketed credit cards as a way to acquire new customers, which included marketing to people with lower credit scores. The recession led issuers to pull back on marketing and raise their credit standards. In 2010, they began to relax again, but standards are still tighter and marketing less prevalent than they were in 2007.
4. While the cost of credit has remained constant, the use of it has decreased. Credit card debt has dropped by a total of 15 percent over the last two years. The decrease is attributable largely to bad-debt write-offs by card issuers and a marked reduction in new balance creation.

If you’re looking for more details, take a look at our full write-up of the conference findings.

David Silberman is the Assistant Director for Card Markets.

If you are a student, the last thing that should be on your mind in the classroom is how you are going to make ends meet over an unexpected credit card fee or a looming loan payment.

As the cost of college continues to rise, you may be one of the increasing number of students turning to debt to pay for your education. Many are relying on loans from private lenders that often lack the clear terms, fixed rates, and flexible repayment options of federal student loans. According to the Project on Student Loan Debt, nearly 1.5 million students now graduate with student loan debt each year, leaving school owing an average of $24,000 – a debt increase of about 25 percent since 2004.

In addition, credit card debt among college students has expanded considerably in recent years, with 84 percent of undergraduates owning at least one card. A study by Sallie Mae revealed that the average student now has at least four credit cards and will graduate with $4,100 in credit card debt. Only 17 percent of students say they regularly pay off all cards each month. This means that most students may be adding hundreds – even thousands – of dollars to their credit costs. And, if your credit history is dinged right out of the gate from missed payments or high debt levels, it could mean higher prices for credit down the road.

Here at the Consumer Financial Protection Bureau (CFPB), we aim to be a new voice for students. We are creating an office for students to provide you with tools for you to make the best decisions about credit.

We are already moving in the right direction. The Dodd-Frank Act, which President Obama signed into law in 2010, paved the way for the CFPB to assist students by examining providers of private student loans. In the coming months, we look forward to hearing from you about your experiences with and concerns about paying for your education with private student loans – and about how we can best help you.

Student consumers will also benefit from the CFPB’s enforcement of bans on arbitrary rate hikes on existing credit card balances and other harmful credit card practices. These consumer protections were part of a law signed by President Obama in 2009. The consumer bureau also will enforce that law’s special new protections for college students and young adults, including a requirement that card issuers and universities disclose agreements with respect to the marketing of credit cards to students.

Additionally, the CFPB aims to help make the costs and the risks of credit products clear up front. If the costs and risks are clear, some students may respond by financing less of their education, using different credit products to do so, or decreasing their use of credit cards to pay for personal expenses. Others may go the other way, taking on a student loan or using credit to help with monthly expenses, confident that they understand the terms of the deal and can manage their obligations responsibly. In any case, clear information about prices and risks will help all students better sort through possible credit options.

This week, we are pleased to focus on these and other issues as we join 26 Federal agencies and partner organizations observing National Consumer Protection Week. National Consumer Protection Week gives us a chance to celebrate this important work and to find new ways to empower student consumers across the country.

You can get involved right away by visiting our main National Consumer Protection Week page, or using the #NCPW hashtag on Twitter to talk about what you’re doing this week to become a more informed consumer.

William Sealy is a member of the CFPB outreach team.