U.S. Consumer Financial Protection Bureau

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U.S. Consumer Financial Protection Bureau
Founded 2010
Headquarters Washington, D.C.
Key People Kathy Kraninger, Director
Website www.consumerfinance.gov

The Consumer Financial Protection Bureau (CFPB) is a consumer agency that President Barack Obama proposed in June of 2009 as part of his financial overhaul plan.[1] It was the brainchild of Senator Elizabeth Warren, who initially described the bureau as a “Financial Product Safety Commission.” Warren served as Special Advisor to the Secretary of the Treasury on the CFPB from September 2010 until August 2011.

The bureau was designed to help safeguard consumers against mortgage, credit card and other abuses that contributed to the 2008 credit crisis.[2]

On June 6, 2018 it was reported that Acting Director Mick Mulvaney had disbanded the group, telling the board's 25 members that they were being replaced and the panel overhauled.[3]


The CFPB was controversial from the beginning. It was strongly opposed by the banking industry, partly because Elizabeth Warren was such a strong critic of the big banks. Warren was at first seen as the obvious candidate to lead the agency once it was established, but President Obama named Cordray to the role instead.[4]

In February of 2010, the Obama Administration backed away from creating a stand-alone Consumer Financial Protection Agency in its overhaul of Wall Street regulations, bowing to mounting pressure from lawmakers and industry. A White House official in a statement signaled a willingness to accept less than a separate agency. The statement outlined the powers legislation must provide for a consumer authority and dropped references to a separate agency to police banks for lending abuses.

On March 1, 2010, however, the head of the Federal Deposit Insurance Corp., Sheila Bair, pitched again for a new agency for consumer financial protection, saying that she believed the creation of such an agency would "help community banks, not hurt them."[5]

Former Ohio Attorney General Richard Cordray was confirmed as director of the CFPB on July 16, 2013.[6] He resigned from that position on November 24, 2017, clearing the way for President Trump to remake the agency, which is reviled by Republicans and Wall Street.[7] Republicans were frustrated that the CFPB continued to issue new rules despite the Trump administration’s focus on loosening regulations.

On November 24, 2017, the departing Cordray appointed his chief of staff, Leandra English, as CFPB deputy director, saying a provision of Dodd-Frank that created the bureau would automatically make her his successor. However, President Trump named Mick Mulvaney, a longtime critic of the CFPB, as the bureau's acting director a few hours later, citing authority from the Vacancies Reform Act. The move caused several days of confusion as both English and Mulvaney claimed to be the acting director.[8] Kathy Kraninger, a Trump nominee, became director of the CFPB in December 2018.[9]

In January of 2018 The U.S. Court of Appeals for the District of Columbia Circuit, in a divided ruling, rejected arguments that the then-Democrat-controlled Congress improperly set up the Consumer Financial Protection Bureau by making it difficult for the president to remove the agency’s director. In effect, the ruling said that the CFPB doesn’t violate the Constitution.[10]

CFPB and the Dodd-Frank Act[edit]

One of the goals of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 (Dodd-Frank Act), which was signed into law on July 21, 2010, was to promote financial stability by adding comsumer protections and curtail abusive practices in areas such as consumer lending, mortgages, and credit card issuance.[11] Title X of the Act created the CFPB within the Federal Reserve, and authorized the bureau to write and enforce consumer protection regulations. Its "triple mandate" is educating consumers, supervising financial institutions, and studying the relationship between the two.[12]