Ever been burned by a financial product you thought was safe? If you're still feeling the sting of hundreds of dollars' worth of unexpected interest, fees or penalties, you may finally get the comfort of knowing it won't happen again. The Dodd-Frank Wall Street Reform and Consumer Protection Act calls for a new agency within the Federal Reserve to crack down on lenders that don't play by the rules.
"Creation of the consumer protection bureau is a big deal because it will be the first time that we've had a regulatory body solely focused on protecting the consumers of financial transactions," says Doug Elliott, a fellow with the Brookings Institution, a nonprofit public policy organization based in Washington, D.C.
The new legislation concentrates the consumer-protection powers of several agencies within the new bureau and gives it money, independent leadership and a mission of protecting consumers from bad practices in the financial industry.
In that mission, the consumer protection bureau will cast a wide net, covering everything from consumer credit cards and mortgages to payday lenders, student loans and bank accounts.
While a lot of what the bureau does will be determined by its as-yet-named leadership, here are a few of its tasks.