July 21, 2011 marked the official launch of the new Consumer Financial Protection Bureau (CFPB). The CFPB was created by the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 after the earlier financial debacles. The Bureau will be responsible for overseeing consumer protection compliance of banks and credit unions with assets over $10 billion – essentially serving as a government watchdog over all things related to lending, including credit cards and mortgages. It will also be able to write rules for a range of existing consumer protection statutes, and enforce those rules against banks and credit unions with $10 billion in assets.
Consumer advocates were thrilled that Obama tasked Professor Elizabeth Warren, a noted consumer protection expert, with setting up the Bureau. However, advocates were less than thrilled when the Republicans threw up road blocks to her nomination as director of the Bureau. Instead, Obama appointed Richard Cordray, a former Ohio attorney general, as director of the new agency. Although he’s no Elizabeth Warren, Cordray does have a good track record for consumer protection and many believe he was a good pick.