Consumer Financial Protection Bureau Targets Non-Bank Industries
Despite the attempts of Republican Senators to stop the Consumer Financial Protection Bureau, it is still set to open next month. Being the result of the Dodd-Frank Act performed last year, the bureau is seeking input as for the financial institutions it needs to control and regulate in addition to banks.
Under the Dodd-Frank Act of 2010, the CFPB is to regulate not only banks with over $10 billion in assets, but also payday loan lenders and non-bank lenders of student and home loans. However, other “larger financial market participants” which need to be covered are not defined by the financial reform act.
Targeted Non-Bank Industries
On Thursday the bureau stated some “larger participants” which are aimed to be targeted, including prepaid cards, debt-relief services, money transmitting, check-cashing, consumer reporting, consumer credit and related activities. The CFPB, however, also requests for input into which businesses and practices it should oversee.
CFPB Met Opposition
The bureau has faced the resistance by Capitol Hill conservatives from the start. It can’t start its work until the appointment of the permanent director. Besides, some Senate Republicans have vowed to block any candidate the president may nominate for the job. Although, the bureau goes on laying its foundation for the opening scheduled on July 21.
The creation of the bureau was also blocked by the bank lobbies. They argue that the bureau practices will lead to fewer financial choices for customers and fewer loans. In addition, they consider that it will affect the economic growth negatively.
