The CFPB and an End to 'Unwarranted Regulatory Burdens'?

On July 21 the Consumer Financial Protection Bureau officially became the regulator of record for a majority of institutions in the consumer financial services industry.

Much has been made of the CFPB’s sweeping, unprecedented powers to protect consumers from “unfair, deceptive or abusive” acts and practices.

Many in the industry fear that, under the CFPB, the pendulum may swing too far in the direction of consumer protection, thus depriving banks and other financial institutions of the ability to remain competitive.

But the CFPB has another important task that can serve to aid financial institutions by counterbalancing consumer-protection activity. According to the Dodd-Frank Act, the CFPB is charged with reducing “unwarranted regulatory burdens” by identifying and addressing “outdated, unnecessary, or unduly burdensome regulations.”

Originally published by Westlaw 2011. Reprinted with permission.