CFPA stands for Consumer Financial Protection Agency.  And here’s why we need it.

Today, the credit and lending industry standards are set by organizations that govern the business of banking.

These organizations are concerned with the banking institutions themselves, safe and sound business practices.  Safe and sound refers to the business of doing business.  It does not refer to what is safe and sound for the consumer.

There is currently no organization protecting or advocating for the consumer.

The existing system allows large banks to create subsidiaries or other businesses that are not subject to the same federal regulations as those large banks.  These “other businesses” are referred to as “non-banks”.  Yet, their businesses still rely on issuing some form of credit, in the way of a card, a loan or a mortgage.  These forms of credit are also called “financial products.”

There is currently no federal organization regulating non-bank financial products, which can include credit cards and mortgages.

Actually, there is currently no federal organization regulating financial products at all.  The seven - yes seven - government bodies that currently regulate the banking industry regulate the institutions.  Not the products they rely on.

The CFPA will consolidate regulations.  This means it will eliminate waste, in time, resources and energy, from the bloated and redundant and loophole-riddled status quo of having seven different government agencies regulate the same sector.

The CFPA will also simplify credit and lending industry regulations, for the consumer.  By simplification, we mean creating standards, drastically reducing the fine print in contracts, and eliminating the possibility for tricks and traps.

Those opposed to protecting the consumer should remember that if there’s no consumer, there’s no business.

The CFPA will exist to ensure consumers are protected, so business can go on - just, not as usual.