Tell Your Story

Many of the low-income and economically vulnerable consumers we serve through the Office of Financial Empowerment face barriers to accessing affordable financial services. And for the many social service and financial-product providers that want to reach them, barriers to scalability – making proven solutions available to a significant number of people — and a lack of data to inform policy and practice can get in the way of building new pathways to financial security.

On November 28-29, more than 100 representatives from banks, credit unions, state and local government, community organizations, researchers, and product developers gathered with our team to explore opportunities to address these barriers at a national convening entitled “Empowering Low-Income and Economically Vulnerable Consumers: Making the Case through Access, Data, and Scale.” We also were joined by our fellow financial regulators and representatives from the departments of Labor and Health and Human Services and the Community Development Financial Institutions (CDFI) Fund.

This was the first event of its kind for us, and it proved to be a great opportunity to gather information for the consumers we serve. The wide range of participants discussed strategies that are improving the financial lives of low-income consumers. Practitioners who work with consumers every day told us about the impact of giving people access to financial coaching and other services, as well as the challenges of taking innovative ideas to scale. Industry providers identified partnerships as key to serving both low-income consumers and offering financially sustainable products. Participants included representatives of organizations serving a variety of consumer groups, including people with disabilities, Native Americans, Asian-Americans, African-Americans, immigrants and others. They spoke of the need for data to inform policymakers as well as the organizations that provide services.

Our mission at the Bureau is to help make sure that the financial marketplace offers safe, affordable products and services to consumers, and that those consumers have access to information and tools that allow them to choose products and services that best fit their needs. In the Office of Financial Empowerment we take this mission seriously because we focus on consumers who are struggling financially and who may not easily be able to access the products and services they need.

Fulfilling this mission requires a range of expertise that that comes from all sectors of the financial marketplace. Attendees heard from Director Richard Cordray, as well as representatives from the CFPB offices that deal with enforcement, supervision, fair lending, and consumer complaints – all of which are vital to our shared mission of financial empowerment.

In the coming months, our team will be developing strategies related to the themes that guided our convening. We want to identify approaches that can serve the tens of millions of consumers who try to make ends meet with low or limited income.

To achieve this, the financial empowerment field needs data to show that financial coaching, counseling, and other methods are effective in helping consumers manage their financial lives. At the same time, we need to understand and expand the ways in which low-income people can access responsible financial services.

We want to hear your experience on ways to provide effective, safe and affordable access to the financial services and products people need, whether that’s persons with disabilities entering the workforce for the first time, foster youth moving to independence or any other vulnerable group that could use some help. You can share your experience with us by telling your story.

We are responsible for ensuring “fair, equitable, and nondiscriminatory access to credit” under the Dodd-Frank Act. Today, we submitted a report to Congress on our efforts to fulfill this fair lending mandate. The CFPB has made great strides on this front over the past year, and the Fair Lending Report of the Consumer Financial Protection Bureau describes our accomplishments.

Credit discrimination can result in some borrowers paying more than they should have to for credit—if they are able to get credit at all. In many cases, borrowers don’t know they are paying more for credit than their friends or neighbors are. Not only is this wrong, it’s against the law. And the CFPB is working to stop it.

Congress gave the CFPB authority over large banks, private student lenders, mortgage companies, and certain other businesses that offer credit. We make sure that these businesses comply with federal consumer financial laws, including the Equal Credit Opportunity Act (ECOA) and the Home Mortgage Disclosure Act (HMDA). ECOA protects consumers from credit discrimination. HMDA requires that some financial institutions collect and disclose certain information about home mortgage loan applications. This helps with identifying discrimination and enforcing the law.

Over the past year, the Office of Fair Lending, together with our colleagues in Supervision, has built a system to supervise lenders. We examine lenders to ensure that they comply with ECOA and HMDA. We’ve carried out fair lending reviews at financial institutions across the country. And together with our colleagues in Enforcement, we’ve worked on several fair lending investigations that may result in further action if we find that violations of the law occurred.

Currently, we are in the process of updating the rules that implement ECOA and HMDA. These new rules will help us carry out our fair lending mandate. We’re also talking with consumers and lenders. We help consumers understand their rights, and we make sure lenders know how to comply with the rules. Finally, Congress asked us to examine fair lending issues in specific areas of consumer finance, such as student lending. We presented our findings in July.

We’ve made a lot of progress, but there’s more to do. Moving forward, we will continue to supervise lenders to ensure fair lending compliance. As part of our continued commitment to transparency, we will share our fair lending expectations with financial institutions. We will work with financial institutions to ensure that our exams are carried out efficiently and effectively.

And we’ll continue to talk to consumers. An informed consumer is the first line of defense against discriminatory practices. We are proud to work for American consumers, and we do our job best when we hear from you directly. Tell us your story, and get answers to your financial questions.

Find out more about the Office of Fair Lending and Equal Opportunity. And if you think you’ve been discriminated against by a lender, submit a complaint.

Last month, we released a report to Congress with the Department of Education on the private student market. This report helped shed light on how the private student loan market works and where there are opportunities for improvement.

When we design a form or develop a regulation, we work to gather continuous feedback. The same goes for our reports. Since releasing the private student loan report, we’ve been talking to researchers, consumer groups, and industry players to share our results and get feedback. Based on this feedback, we developed ways to make better estimates on certain market statistics, particularly in areas where our data set was incomplete.

While there aren’t any changes to the key findings and recommendations, we released an update today to reflect new methodologies our research team used to calculate some statistics in the report: first, the proportion of private student loan borrowers who exhausted their Federal Stafford Loan options; and second, the extent to which schools certified a borrower’s need for a private student loan.

Compared to the original estimates, the update shows that the number of borrowers who exhausted their federal options is lower than our original estimate, and the level of school certification is higher.

Check out the updates.

Do you have more suggestions about future topics for research on student loans? Share your ideas and tag your story with “student loans.”

We took an important step today towards looking out for older American consumers. Director Richard Cordray announced a public inquiry to learn more about the many ways in which older Americans are financially exploited and about the best practices for elder financial management.

Congress gave my Office for Older Americans a broad mandate to look out for the consumer financial interests of older Americans. As part of that work, we are keenly focused on the important issue of financial abuse and exploitation of the elderly. According to a recent study, seniors lost at least $2.9 billion to financial exploitation in 2010. Unfortunately, it is a growing trend. From 2008 to 2010, there was a 12 percent increase in the amount of money scammed from seniors.

The CFPB wants to hear from the public – especially people working directly with seniors – about these issues. In particular, we want input on how seniors can best determine the legitimacy of the credentials of financial planners and advisors. We’re also seeking information on what financial education, counseling or management programs are tailored to the unique needs of older Americans, their families, and their caregivers. We want to know what programs exist and and how effective they are.

We are looking out for our senior veterans, too. The Bureau wants feedback on what specific types of fraudulent, unfair, abusive, or deceptive practices target older veterans or military retirees. We know that Veterans Affairs “Aid and Attendance” benefits exploitation and military pension buyout schemes are being used in ways that can put veterans’ assets and pensions at risk. We want to learn more so we can better help older veterans and military retirees protect themselves.

The information we gather will benefit senior consumers in many ways. As my Office conducts its research on certifications and designations of senior financial advisors, the information we hope to gather here will give us a better picture of what is happening in the marketplace. With that information we can let seniors know where to look for fair and sound advice from reliable resources. Then they can make their own informed choices.

We want our inquiry to be as complete as possible and we need your input. The information gathered from this Request for Information will help guide future work for the Bureau and my office. We want to help seniors avoid fraud and make good, responsible decisions when they make financial choices. So please let us know about your experiences, good and bad.

We look forward to hearing from you.

Last week the Federal Reserve released a video on the Independent Foreclosure Review. The video aims to help borrowers who believe they were financially harmed during foreclosure processes between 2009 and 2010. Because we hear from consumers each day who have questions and concerns regarding their mortgages and foreclosures, we want to pass on good information they may find useful.

Many borrowers across the country have gone through foreclosure in recent years. Sometimes consumers went through the process with unanswered questions and concerns about how their foreclosure was handled. And in some cases, there were major errors made by servicers that led to foreclosures that could have been avoided. Because of these practices, the Independent Foreclosure Review has been established to assist borrowers in getting answers and possibly compensation. The Federal Reserve has set up a website for you to learn more about the Independent Foreclosure Review. The Federal Reserve offers an English language video and a Spanish language video that provide greater details, but here are the basics:

1. Your mortgage must have been serviced by a participating servicer.
2. Your foreclosure must have been initiated, processed, and/or completed between January 1, 2009 and December 31, 2010.
3. The foreclosure had to be for your primary residence.

Please note that there are absolutely no fees attached to this process. Beware of anyone who asks you to give them money.

To submit complaints, inquiries, feedback, or to tell the CFPB about an experience you’ve had with your mortgage, you can call our toll-free phone number at 1-855-411-CFPB (2372) or submit a complaint online. Consumers who are experiencing problems because they are unable to pay their mortgage can also call us at 1-855-411-CFPB and we will connect them with local housing experts who can provide free and professional advice.

Yesterday, Director Cordray kicked off our field hearing on payday lending in Birmingham, Ala., by explaining why he was there and what the Bureau wants to learn from consumers about payday loans. (more…)