In testifying before the Senate Committee on Banking, Housing, and Urban Affairs earlier this week, Consumer Financial Protection Bureau (CFPB) Director Richard Cordray said the CFPB had made "considerable progress" toward its goal of protecting consumers since the passage of the Dodd-Frank Reform Act in 2010.
"In passing the Dodd-Frank Act, Congress vested in this new Bureau the responsibility to stand on the side of consumers and to help restore their trust in the financial marketplace," Cordray told the committee. "Over the past three years, we have made considerable progress in fulfilling our rulemaking, supervisory, and enforcement responsibilities to protect people all across this country."
Cordray cited as evidence of the progress several mortgage rules passed by the CFPB after many months of consulting with industry professionals and stakeholders. The new mortgage rules, which took effect at the beginning of this year, are aimed at preventing the problems that led to the housing crisis and financial meltdown. The rules regulate loan originators' compensation practices and require lenders to make good faith assessments as to the borrowers' ability to repay loans. The rule implementing the "Know Before You Owe" mortgage forms was issued last fall and ensures that consumers know all their options when pursuing a mortgage loan, and helps them prevent surprises.
The work of the CFPB's enforcement team responsible for investigating violations has led to approximately $4.7 billion in relief to date for about 15 million harmed consumers who were victims of illegal business practices, according to Cordray. He gave as an example the penalty imposed by the CFPB on Ocwen Financial, the nation's largest nonbank mortgage lender, in December 2013, for engaging in "significant and systemic misconduct that occurred at every stage of the mortgage servicing process" that included charging illegal fees and deceiving borrowers regarding foreclosure alternatives. Ocwen was ordered to pay $2 billion in relief through principal reduction to underwater borrowers and an additional $125 million to about 185,000 borrowers who had been victims of foreclosures.
"At the heart of our mission is the premise that consumers deserve to have someone stand on their side and make sure they are treated fairly in the financial marketplace," Cordray said in his testimony. "Since the day we opened our doors and received our first few hundred consumer complaints, we have now handled nearly 440,000 complaints and secured both monetary and non-monetary relief on behalf of tens of thousands of individual consumers, including many people in each of your states."