300 Million Reasons to Love the CFPB

Another major initiative relates to credit bureaus. The CFPB, recognizing how difficult it is in the modern world where computers zap information back and forth at the speed of light, is undertaking an effort to measure the quality of information provided to and used by the nation's credit bureaus. The stated goal is to establish standards and find tools to help the credit bureaus do a more accurate job of tracking billions of pieces of credit history. The clear result will be a big win for consumers and for the users of all that credit information.

The CFPB has a lot on its plate for the next year. Sometime after the election, the CFPB will rule on what constitutes a "qualified mortgage" and thus inject some standardization into an industry where transparency has been a serious problem and the root of much of the financial calamity that has shaken the nation these past five years.

The debt collection industry will be a major focus of the CFPB in the coming year. The Federal Reserve estimates that 30 million Americans have a debt with a collection agency. The industry certainly has an entirely unsavory reputation and is overripe for scrutiny. Richard Cordray, the CFPB director, said, "Our goal is to help honest debt collectors do their job responsibly and see that the rest are either rehabilitated or run out of business once and for all."

That is tough talk and the fireworks should be entertaining when the CFPB takes a peek at foreign call centers and the controversy surrounding credit robo-signing and robo-suing. To the millions of Americans who are hounded on a daily basis by abusive debt collectors, the cavalry is on the way!

What else is on the horizon for the coming year? Prepaid credit cards, overdraft practices for checking accounts, arbitration clauses in credit card and other financial agreements, reverse mortgages and student loans.

The CFPB has done an extraordinary job this past year. There is no reason to expect anything less in the coming year. Much of the credit goes to the demeanor of Richard Cordray, former Ohio Attorney General and head of the agency.

In today's world of political divisiveness, it is refreshing to see leadership that truly tries to put all that aside and focus on the job at hand -- making sure that consumers get a fair shake from the banks, mortgage companies, credit bureaus, debt collectors and sundry others who deliver financial services.

From one of the 300 million of us -- and one who happens to know a thing or two about debt collection -- it's been a good first year for the CFPB.

--By Bill Bartmann