I, II CFPB (Consumer Financial Protection Bureau) Making Financial Markets Work for America's Consumers

In response to an unprecedented cycle of expansion and contraction in the mortgage market that sparked the most severe U.S. recession since the Great Depression, Congress passed the Dodd-Frank Act, which was signed into law on July 21, 2010. Pub. L. No. 111-203,124 Stat.1376 (2010). In the Dodd-Frank Act, Congress established the CFPB Bureau and under sections 1061 and 1100A, generally consolidated the rulemaking authority for Federal consumer financial laws including “The Equal Credit Opportunity Act (ECOA), Truth in Lending Act (TILA)” and this paper will explain how the Consumer Financial Protection Bureau now accepts complaints related to mortgages, bank accounts, over draft protection and services, private student loans, other consumer loans, credit reporting, and money transfers. Most recently on July 10, 2013, it began handling debt collection complaints. The CFPB continues to work toward expanding its complaint handling capacity to include other products and services, such as payday loans. This paper will explain how Consumers may also contact the CFPB with questions about other products and services. The Bureau answers these questions and refers consumers to other regulators or additional resources as appropriate. The paper will concentrate in performance an accountability of the CFPB.A Brief History of the CFPB, in response to an unprecedented cycle of expansion and contraction in the mortgage market that sparked the most severe U.S. recession since the Great Depression, Congress passed the Dodd-Frank Act, which was signed into law on July 21, 2010. Pub. L. No. 111-203, 124 Stat. 1376 (2010). In the Dodd-Frank Act, Congress established the Bureau and, under sections 1061 and 1100A, generally consolidated the rulemaking authority for Federal consumer financial laws, including the “Equal Credit Opportunity Act (ECOA), Truth in Lending Act (TILA), and Real Estate Settlement Procedures Act (RESPA)” in the Bureau. At the same time, Congress created the Consumer Financial Protection Bureau which was legislated into existence by the Dodd-Frank Bill of 2010 as part of an effort to overhaul financial regulation and make lending, especially mortgages and credit cards, fairer and more transparent for consumers. Its priorities will be mortgages, credit cards, and student loans. Dr. Elizabeth Warren, former Harvard Law professor and current candidate for Massachusetts’ Senate seat, oversaw the CFPB in its early days. The agency launched its website in February of 2011 under Warren’s supervision, but a threatened veto from Senate Republicans kept her from being confirmed as its director. Instead, Obama tapped the (somewhat) less controversial Cordray, who had previously served as Ohio’s attorney general. However, an easy confirmation process wasn’t exactly in the cards. 44 of the 47 Senate Republicans led by Minority Leader Mitch McConnell and Richard Shelby sent a letter to President Obama detailing their concerns, primarily, that the CFPB director would have too much power. They threatened to block not only the director’s confirmation, but all financial services nominees.The one-person directorship was replaced with a five-person board of directors. The CFPB would rely on the Congressional appropriations process for funding. The Financial Stability Oversight Council would have greater veto power. In December of 2011, the Republicans’ filibuster blocked Cordray’s nomination, and Dodd-Frank had specified that the bureau would have no enforcement power while it lacked a director. Obama used his executive power to appoint Cordray as the bureau’s head in a highly controversial recess appointment, during which the Senate was technically in session.Pro Forma Sessions And Recess Appointments Explained President Obama did something slightly unusual when he named Cordray to head the Bureau and not simply a recess appointment. Democrats cried foul when President George W. Bush used the procedure, and Republicans did the same for President Bill Clinton. But Obama used what’s known as a pro forma session.Pro forma sessions are generally used to satisfy the Constitutional requirement that no chamber of Congress adjourn without the other’s consent, and consist of a seconds-long session in which no business is conducted. A solitary member can gavel the Senate into session and leave, having fulfilled the requirements for a pro forma session. As long as someone does so every three days, the thinking goes, the Senate does not technically go into recess and the president cannot bypass the confirmation process.In 2007, after the Democrats regained control of the Senate, Majority Leader Harry Reid used pro forma sessions to prevent President Bush from making recess appointments. However, times have changed: most importantly, the Republicans do not control the Senate. Even the legislators themselves aren’t certain that the minority party can call the Senate into session. Holding pro forma sessions also requires that, every three days, one senator flies back to Washington at the expense of constituent meetings, town halls and fundraising dinners.Everyone from the Department of Justice to the President to Senate aides believes that gaveling the chamber into session every three days precludes a recess. According to Victor Williams of the Catholic University of America, though, the Constitution and the courts say otherwise.The adjournment-consent clause of the Constitution requires that each house obtain the others’ permission before going into recess for more than three days. To work around the clause, chambers would regularly call pro forma sessions. However, the Constitution is unclear as to whether the clause applies to recess appointments as well. Over the past century, the Department of Justice has gone back and forth on the issue. The most recent brief came in 1993: President Clinton’s Justice Department implied that because the adjournment-consent clause permitted breaks of three days, a recess had to be three days or longer for the President to bypass the confirmation process. The courts, as well as the Senate’s own research, disagree. According to the Congressional Research Service, the Constitution does not specify the length of the recess required for a recess appointment. In 2004, moreover, the U.S. Court of Appeals ruled that, “The Constitution, on its face, does not establish a minimum time that an authorized break in the Senate must last to give legal force to the President’s appointment power under the Recess Appointments Clause.”It is entirely possible that pro forma sessions are a figment of the federal government’s collective imagination, and that President Obama could confirm the CFPB director, and in fact all of his financial services nominees, as soon as the current Senate session is gaveled to a close. He would hardly be alone in extensive recess appointments: Theodore Roosevelt shoved 160 appointees through in one Senate-free day. However, some GOP senators contend that the Dodd-Frank bill requires a “Senate-confirmed” director, thus disqualifying anyone appointed during recess. John P. Elwood, who worked at the Office of Legal Counsel, though, believes otherwise. “It is unconstitutional to draw distinctions between recess-appointed (and Senate-confirmed) officers, because it burdens the president’s recess authority.” The Congressional Research Service (CRS) works exclusively for the United States Congress, providing policy and legal analysis to committees and Members of both the House and Senate, regardless of party affiliation. As a legislative branch agency within the Library of Congress, CRS has been a valued and respected resource on Capitol Hill for nearly a century. Is well-known for analysis that is authoritative, confidential.