First Do No Harm: An Analysis of the Broad Powers of the CFPB

In his remarks at the signing ceremony for the Dodd-Frank Wall Street Reform and Consumer Protection Act, President Obama promised that the arsenal of consumer protections included in the new law would be "enforced by a new consumer watchdog with just one job: looking out for people — not big banks, not lenders, not investment houses — looking out for people as they interact with the financial system."

The establishment of the Bureau of Consumer Financial Protection (more commonly known as the Consumer Financial Protection Bureau — or CFPB) has been a central and fiercely debated pillar of the administration's financial reform strategy. Although political compromise, practicality and even in-court challenges to the scope of the CFPB's authority could diminish its influence, the CFPB's current structure and powers point to an agency likely to profoundly impact the financial services industry. This article discusses that impact and the aspects of the CFPB likely to produce it.

Reprinted with permission from the Mortgage Bankers Association (MBA) and Mortgage Banking Magazine.