Consumer Protection

Your monthly mortgage bill soon could get easier to understand, and it wouldn't change each time your loan is sold to a new servicer. The Consumer Financial Protection Bureau has developed a proposed standardized mortgage servicer statement designed to provide clear information about the loan on a single page. The prototype released Monday included a breakdown of how much of the monthly payment went to principal, interest and escrow. The form also detailed the outstanding principal, maturity date, prepayment penalty and, for adjustable-rate mortgages, the time when the interest rate could change.

Richard Cordray, head of the Consumer Financial Protection Bureau, told lawmakers that he would not abuse his power and promised that the agency would take action only against companies that break the law. "It … is not our intention to start going off and acting like we're some sort of mini-Congress, just doing anything we think is good and right," Cordray told members of a House Oversight and Government Reform subcommittee Tuesday. The agency would follow existing interpretation of consumer laws covering financial products and "should not be going off in some wild, new unexpected direction" that would cause confusion among banks and other firms, he said.

The new head of the Consumer Financial Protection Bureau is looking into the practices of Buy Here Pay Here auto dealers and the rapid growth of the industry. "We are looking at that space," Richard Cordray said Thursday at his first news conference since being appointed as director last week. "We're concerned about it. " Buy Here Pay Here dealers often target poor people and those with bad credit. Unlike conventional auto dealers, who act as middlemen in arranging financing, Buy Here Pay Here dealers lend the money themselves — at interest rates that can top 30%. That direct lending makes them subject to consumer bureau oversight.

  The new head of the Consumer Financial Protection Bureau wasted little time getting to work, using the agency's new powers to start supervising payday lenders and other firms outside the conventional banking system. The bureau's main goal will be ensuring that consumer loans, mortgages and other financial products are easier to understand, but the new director, Richard Cordray, warned companies that "transparency alone is not enough. " "The consumer bureau will make clear that there are real consequences to breaking the law," Cordray said in a speech Thursday at the Brookings Institution, a Washington think tank.

President Obama kicked off the election year aggressively, picking a fight with congressional Republicans by sidestepping the Senate to fill the top job at the government's newly created consumer protection bureau. He also filled three vacancies on the National Labor Relations Board, which referees labor-management controversies — a priority of his allies in labor unions. The appointments Wednesday, which had been stalled in the Senate, came as Obama moved to make confronting Congress a central part of his strategy for reelection.

The last year was a remarkable one for consumer protection. Among the wins: A new watchdog agency opened for business, regulators cracked down on a controversial merger and a major bank retreated from a dubious fee. But there's still plenty of heavy lifting to be done as the economy trudges back to higher ground. Consumers and corporations will continue to tussle for the upper hand amid a shifting regulatory and political landscape. "There are definitely a number of hurdles for us to get over," said Sally Greenberg, executive director of the National Consumers League in Washington.

Most cellphone and tablet users can purchase digital goods and charge them to their monthly bill or prepaid phone account, but buyers may not get the protections they need if something goes wrong with the transaction, a new report says. According to an analysis by Consumers Union, the protections that consumers receive vary depending on their wireless carrier's policies and what's in their cellphone contract. "We found that consumer rights can vary widely between wireless carriers, and the protections carriers claim to provide are often nowhere to be found in consumer contracts," said Michelle Jun, senior attorney for Consumers Union, the nonprofit advocacy branch of Consumer Reports.

Got a beef with your mortgage lender? Is your bank unresponsive when you complain that your escrow account is fouled up and making your monthly payments needlessly high? Did your loan officer switch you into a more costly home loan than you were promised? Or worse yet, did your home loan servicer ignore you when you told him you've had an unexpected drop in income and needed a modification to avoid missing payments? If any of these situations sound familiar, here's a heads-up about the newest and least-publicized source of federal help: the Consumer Financial Protection Bureau's home mortgage complaint and dispute resolution hotline.

The Consumer Financial Protection Bureau unveiled its proposal for a simplified credit card agreement form designed to make it easier for consumers to understand interest rate terms and comparison shop. "Credit cards can be complicated, with many moving parts that impact the cost to consumers," Raj Date, the agency's acting director, said at a Cleveland news conference Wednesday. "When a consumer has to read through pages of legal fine print in their credit card agreement to figure out how their card works, it's easy to get confused," he said.

In its first three months of operation, the Consumer Financial Protection Bureau got more than 5,000 complaints about credit cards, the federal agency said in a report. "When consumers contact us, we get a snapshot of how the consumer finance markets are working," said Raj Date, the special Treasury Department advisor who is running the bureau until the Senate confirms a director. The agency, which launched on July 21, has made handling complaints a priority. The report covered complaints received through Oct. 21. "Many complaints show consumers struggling to understand the terms of credit cards and associated products like debt protection services," the report said.