Consumer Group Applauds CFPB's Efforts to Date, Including Its IT
A consumer advocacy group called Americans for Financial Reform has given the fledgling Consumer Financial Protection Bureau a mostly favorable six-month report card, praising its IT and hiring efforts in particular.
The group believes the CFPB Implementation Team, which is headed by Harvard professor Elizabeth Warren, is making "significant progress" in its efforts to build an effective agency by its starting date, July 21, 2011.
On the technology front, "the CFPB has taken major steps to build key systems," the report found, noting that the Web and Online Engagement team, headed by David Forrest, chief engagement and information technology officer, and Dan Munz, citizen engagement lead, is expected to roll out the bureau's protoweb site within the month.
The group cautions the implementation team, however, to make sure that the complaint database it's building provides broad access to consumers, has the capability to handle all consumer complaints and inquiries -- including the ability to take followup steps (e.g., provide advice or mediation to consumers, track patterns, refer to enforcement, etc.), and limits the collection of personal information such as Social Security numbers.
The report points out that it will be challenging for the bureau to build complaint handling, consumer communication, industry communication and monitoring and other technology systems in one year. "Many similar agencies have taken several years merely to upgrade or modify such systems," the report notes. "On the other hand, the bureau has an opportunity to build these systems at a stateoftheart level, whereas existing agencies that undertake such projects are often burdened with replacing or upgrading archaic legacy systems."
On the hiring front, the AFR praised the CFPB's recent key hires: Massachusetts Banking Commissioner Steve Antonakes as director of bank supervision, Ohio Attorney General Richard Cordray as director of enforcement and Holly Petraeus as head of Servicemember Affairs.
The AFR expresses approval of the Bureau's early projects, including the Advanced Notices of Proposed Rulemaking and simplified mortgage closing documents and credit card contracts it's drafting, all of which are expected soon, and the Memorandum of Understanding the CFPB implementation team negotiated recently with state bank supervisors.
The report also notes challenges that lie ahead for the CFPB, such as the effort required to transfer 1,000 staff from other agencies. It will also be the first federal agency that has ever been required to supervise nonbanks, including mortgage companies, payday lenders and credit bureaus; Peggy Twohig, formerly with the Federal Trade Commission, is leading this area.
The group strongly urged President Obama to nominate (and the Senate confirm) a director of the Bureau as soon as possible, and gives a vote of confidence to acting head Elizabeth Warren.