July 28, 2011 - Ever had a complaint about your credit card company but felt no one was listening? Now someone is: The new federal agency geared toward protecting consumers' financial health is ready and waiting to take your complaint.
The Consumer Financial Protection Bureau is now accepting credit card complaints on its website. In the future, the bureau will accept other kinds of complaints as well, but for the moment, it's just for credit card complaints.
They're expected to get plenty of them, since advocates say previously consumers didn't have a federal agency specifically focused on consumers and their financial problems. A report from a wide-ranging coalition of state and federal consumer organizations and others, a group called Americans for Financial Reform, notes that until recently, four different federal agencies that regulate banks were also charged with protecting consumers.
By contrast, the legislation setting up the bureau established one single agency designated to work on behalf of consumers.
"What the law did was transfer all those consumer protection functions to one place," says Carmen Balber, Washington director for Consumer Watchdog, one of the coalition members. "So (now) we have one regulator whose job is to look at the bottom line for consumers' financial health, instead of what all of the other regulators do, which is look at the bottom line for banks."
In its report, the coalition laid out its "Top 10 Reasons" it says consumers need the new bureau:
· Reason 1: Unchecked predatory mortgages
· Reason 2: Unfair credit card practices
· Reason 3: Overpriced overdraft fees
· Reason 4: The growth of triple-digit payday lending
· Reason 5: Lack of consumer legal rights
· Reasons 6-10: Private student loan rip-offs, credit bureau mistakes, debt collector problems, unregulated prepaid debit cards, and auto finance scams
For their part, banks say the new complaint process at the bureau raises some concerns.
"We are concerned the (bureau) website has not been fully tested, and that there may be confusion on the part of users and issuers (with glitches that could cause delays and frustrate consumers)", Jeff Sigmund, senior director of public relations for the American Bankers Association, wrote in an e-mail.
For instance, Sigmund wrote, "The bureau won't be able to change contract terms like the amount of fees (or the) interest rate unless there is a violation of a regulation, which is unlikely."
But for many frustrated consumers, Balber believes, the bureau's approach will come as a refreshing change from bouncing around to any number of agencies and consumer groups looking for help.
She describes the new agency as the "one cop on the beat whose job it is to think about the impact of financial practices on consumers as a whole."
The bureau also wants consumers' feedback on their experiences with all kinds of financial products, such as mortgages and student loans. Head to its website to "tell your story" about your experiences, "good or bad," with those products.
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