Does Consumer Financial Protection Bureau Have Teeth?

The federal Consumer Financial Protection Bureau was established as part of the Dodd-Frank Wallstreet Reform and Consumer Protection Act of 2010.  According to the bureau, part of its mission is to enforce consumer protection laws.  But, does the bureau have any real power to enforce the laws and bring justice to consumers?

A recent Huffington Post article suggests that the bureau does not really have any teeth.  Of the more than 12,000 consumer complaints that have been filed with the bureau in the past six months, 30% have been closed without any relief to the consumer, 55% have been closed with some form of relief, and the remaining 15% are still pending.  Tellingly, of the complaints resulting in some form of relief, only 40% of the consumers involved “did not dispute” the “relief”.

The main allure of the bureau for consumers is that it is free to file a complaint.  However, the above statistics suggest that free legal help usually does not lead to justice.

The best way to enforce consumer protection laws is to hire an experienced private lawyer.  Unlike government workers, a private lawyer has a direct incentive to take a serious interest in a consumer’s case, and aggressively fight for the full extent of justice the law allows.  Fortunately, many consumer protection laws, including the Maryland Consumer Protection Act, allow a prevailing consumer to petition the court to make the defendant reimburse the consumer for up to 100% of their lawyer’s fees. 

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