In its continued efforts of actually including the consumer in consumer regulations, the government is hoping we’ll take to Facebook with our comments, suggestions and input. As one Consumer Financial Protection Bureau spokesperson said, “This is just one prong of our efforts”.
The other “prongs” include an internet chat room, “Regulation Room”, that’s hosted by Cornell University and unlike Facebook postings, those with something to say in the Regulation Room can remain anonymous. The question becomes, Will Americans comment online about banking regulations or will they continue to feel the intimidation many have grown accustomed to when attempting to communicate with finance big businesses?
One hurdle these groups already face is a very hostile media. One blogger wonders how the “kinds of tools associated with texting tweens” can help bridge the gap between regulators and taxpayers.
Founded in 2008 following the disastrous mortgage and banking scandals, CFPB‘s primary goal is to serve as a consumer watchdog for the financial sector. Despite the unwarranted criticisms the agency has received, it’s fair to say it’s made significant process; in fact, it’s done more in its first two years than some agencies, businesses and other government arms have accomplished in decades. With an active database of consumer credit card complaints which have earned praise from consumer watchdog groups, the government and consumers alike, there’s no denying a winning formula. The question is whether it can maintain its momentum.
While there are simultaneous efforts ongoing at CFPB, it’s two biggest to date are efforts to completely overhaul both the credit card industry and the entire mortgage arm of the sector. This is where consumers come in.
The old saying about there being strength in numbers is especially apt in this particular effort. Because new federal regulations are required by law to be “open” for a period of time to invite consumer feedback and suggestions, there’s no denying a shift is occurring. In the past, the wide majority of feedback hasn’t come from consumers, but rather, the actual businesses that have shareholders to consider. “It’s called ‘public,’” says Barry Zigas, director of housing policy at the Consumer Federation of America.
But what’s developed is a class of professionals who specialize in analyzing and commenting on these rules.
CFPB hopes to change those mindsets and approaches so that the consumers have a voice that ensures fairness.
The Facebook model is fine, but it’s not anonymous. On the other hand, the Regulation Room, described as an Internet chat room run by Cornell University, consumers can let their thoughts be known without inviting problems that sometimes happen when anonymity isn’t an option.
For its part, the Regulation Room will break down all the conversations and organize them according to the regulations, comments and other dates. The questions these conversations are focused around are updated with new questions depending on the specifics. Those questions will be invitations for consumers to discuss and comment. There are even buttons that allow a consumer to share comments that they agree with or even those they disagree with.
The site’s live, as of August 18 and on its first day, it received 110 comments. It’s expected those numbers will climb as word gets out. A moderator is always around to keep it friendly and to provide follow up questions.
Already there are stories of consumers who are frustrated with the way their creditors do things, including a comment from one poster,
Hearing someone tell you over the phone that they can’t find a document that you delivered over and over again is about the most frustrating and alienating and helpless shady experience I had while trying to short sale my home.
The bureau says these challenges are common due to “sophisticated mortgage products, partial payments, delinquent borrowers, fees, errors and misunderstandings”. It also says that when consumers can’t make their mortgage payments, servicers are the ones that decide what to do – how quickly they’ll do it and of course, there are the problems with the proverbial left hand not knowing what the right hand is doing. It’s not uncommon for mortgage companies and credit card representatives to not document payment plans, which frustrates the consumer who’s sticking to the agreement, even as the companies say they have no record of that agreement. The agency also says,
As we saw during the recession, not all servicers were prepared to handle these challenges. And that can have very bad consequences for consumers.
This, says CFPB, is why the new rules must be put into place.
For us, rules that work are rules that protect consumers, are consistent with other rules that apply to servicers, recognize the impact on lenders and mortgage investors, and do not cause unnecessary burden on industry. So, in addition to meeting with consumers, consumer advocates, servicers, trade associations, and mortgage investors, we…(want to) develop these proposals.
Its first goal –
Mistakes happen, but they need to get fixed. Servicers must address borrower concerns about possible errors within certain timeframes and provide the information they request.
The CFPB says there are problems that must be ironed out and in the future, it’s hoped small town meetings with residents and meetings with consumers groups can further bridge the gap.
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