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Dodd-Frank: financial regulation in neutral

The Consumer Financial Protection Bureau opens
The Consumer Financial Protection Bureau opens

It's not a rule per se, but one of the biggest provisions of Dodd-Frank consolidates consumer protection functions at a slew of government agencies under the Consumer Finance Protection Bureau, or CFPB. Those functions include rule making, enforcing consumer protection laws and investigating consumer complaints.

In addition, the CFPB received a big portion of Dodd-Frank's rule-making chores, including creating new, simplified standards for mortgages and reverse mortgage disclosure forms, says Ken Benton, senior consumer regulations specialist at the Federal Reserve Bank of Philadelphia.

The transfer of consumer protection power and responsibility to the CFPB was supposed to occur July 21. While the CFPB has started taking credit card complaints from the public and conducting studies on the treatment of consumers, it won't start taking complaints about other types of financial products until later this year, the agency's website says.

Furthermore, a lack of a confirmed CFPB head is handicapping the agency, Jackson says.

"The Dodd-Frank Act establishes this bureau and gives it enormous, unprecedented power to stand between issuers of financial instruments and consumers to protect consumers from abuses. But some of these powers are contingent on the confirmation of a director of the agency," Jackson says.

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