"In June 2009, President Obama proposed to address failures of consumer protection by establishing a new financial agency to focus directly on consumers, rather than on bank safety and soundness or on monetary policy. ... This agency would protect families from unfair, deceptive, and abusive financial practices.
"In July 2010, Congress passed and President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act. The Act created the Consumer Financial Protection Bureau (CFPB). The CFPB consolidates most Federal consumer financial protection authority in one place. The consumer bureau is focused on one goal: watching out for American consumers in the market for consumer financial products and services."
So how does this affect the repossession industry? It imposes much stricter compliance regulations on financial institutions to not only manage their own compliance to all federal consumer protection regulations but also to oversee the compliance all of their Service Providers (including those providing repossession and collection services,) Michael J Dougherty, Managing Partner - Weltman, Weinberg and Reis wrote an excellent article detailing this in The American Repossessor: A New Day in the Repossession World. But why is all this so scary?
Since its formation on July 21st, 2011 it already has 750 employees and an annual budget in excess of half a billion dollars! It has virtually unlimited powers to create regulations and enforce them. With TV shows like Operation Repo and Lizard Lick Towing & Recovery and the occasional sensational news story on a repossession gone bad, it was feared that the CFPB would see the whole repossession process as a threat to the public and regulate self-help repossessions completely out of existence. Well, that hasn't happened and it doesn't look likely to happen, at least not for now. But any time you have an agency with that much power, you do have to be watchful.
However, if you want to get a feel for this agency, go to their website, wwwconsumerfinance.gov, and look around. One area I found interesting was Creating the Bureau which gives a little history and the rationale behind the Bureau. Another fascinating area is the Consumer Complaints Database. Here you can see every credit card complaint filed with the CFPB since June 1, 2012, what area it came from, which financial institution it was against and that institution's response. You can also look at pie charts and graphs which break down the complaints into how many of each type of complaint there are, etc. This area is in beta testing right now but it would be smart to keep an eye on it as they start to list other consumer complaints besides just on credit cards. This way, any potential future trouble from the CFPB might be headed off by proactively recognizing and handling any problem areas within our industry.
What I realized after my research is that, like most news media, the articles I had been reading on the CFPB were sensationalized and written to cause an emotional response by painting a picture of "how bad everything is." When I looked into this myself, I found that the CFPB's purposes are actually good and only in one small aspect does it even affect the repossession industry and, really, its focus is on other areas of consumer finance. Now, it is another governmental agency and so by definition will not be efficient and will lead to more hindering governmental regulation, but unless it takes a drastic turn in its focus, I don't see it as a monster that will devour us all.