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Debt Settlement Program News: A New Sheriff In Town

[Aug 9, 2010.]

 

You're considering a program to get out of debt.

Or maybe you've already signed up for a debt settlement program and sadly discovered they don't have your best interests in mind.

In either case, you should be interested to know there's a new government agency ramping up to protect consumers from shady financial services. As part of a recently signed law--The Wall Street Reform And Consumer Protection Act (H.R. 4173)--a new sheriff is being created to protect consumers from crooked financial products and services--including debt settlement programs. The Consumer Financial Protection Bureau (CFPB) could be up and running in possibly as little as six months. Here are a few of the things the new sheriff has been tasked to do.

  • collect complaints from consumers and monitor the progress of solutions
  • create shorter, clearer disclosures on financial products, such as credit card debt agreements
  • boost the consumer's money management knowledge through the Office of Financial Literacy

How to Make Debt Settlement Program Complaints

Within eighteen months you will be able to take complaints to the Consumer Financial Protection Bureau and get real results. Currently, Federal regulators walk a tight rope between safeguarding the health of financial institutions and protecting consumers. Consumers often take a back seat to looking after banks. It is hoped that the CFPB will fix that. If you are trying to get out of debt, such as credit card debt and have a complaint against a debt settlement program, you will be able to complain to the CFPB.

Whereas in the past such sheriffs were ineffective because they'd lose funding, the CFPB's money is safer. Their approximately $500 million budget comes from a percentage of the Fed's income. If powerful special interest groups sway the Congress, the budget isn't as easily affected. This should mean the CFPB is more independent and better able to do what it has been designed to do--protect consumers.

One of the more promising candidates to be the first head of the CFPB may is Elizabeth Warren, a Harvard Law Professor who has been very involved in the bank bailouts of recent years. She has a long, distinguished career in consumer protection issues. She is currently on the Congressional Oversight Panel and serves as the Treasury's assistant secretary for financial institutions. The CFPB was an idea she introduced in 2007. White House Senior Advisor David Axelrod said, "She has helped inform this effort greatly and what has been done here in many ways reflects something she's been advocating for years and years and years."

 

About Author:

Renee Morgan has been a loan officer for over eighteen years. She is also a freelance writer and guest expert for radio and TV.

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