Consumer Financial Protection Bureau Overview

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Questions and Answers

What is the primary role of the Consumer Financial Protection Bureau (CFPB)?

To regulate state financial institutions

To provide loans to consumers directly

To enforce federal consumer financial laws (correct)

To guarantee mortgages for consumers

Which of the following is NOT a function of the CFPB?

Managing the Federal Reserve's monetary policy (correct)

Monitoring financial markets for consumer risks

Supervising non-depository residential mortgage lenders

Accepting and analyzing consumer complaints

Under the Dodd-Frank Act, which of the following is a core function of the CFPB?

Stopping discrimination in consumer finance (correct)

Issuing government-backed loans to consumers

Regulating the stock market

Overseeing commercial banks only

What type of financial institutions does the CFPB primarily regulate?

Non-depository residential mortgage lenders Signup and view all the answers

The Department of Housing and Urban Development (HUD) was created to address issues mainly related to:

Substandard and deteriorating urban housing Signup and view all the answers

Which function is associated with the CFPB that involves consumer interactions?

Presenting reports on consumer complaints to Congress Signup and view all the answers

Which group retains authority over licensees in the financial sector while the CFPB supervises them?

States Signup and view all the answers

What does the CFPB maintain to monitor and resolve consumer complaints?

An online consumer complaints reporting system Signup and view all the answers

What was the primary purpose of the Federal Housing Administration (FHA) when it was established?

To make homeownership possible for first-time homebuyers Signup and view all the answers

What is the key function of the Government National Mortgage Association (Ginnie Mae)?

To create a secondary market for government-insured loans Signup and view all the answers

Which organization primarily protects lenders from borrower defaults on FHA-insured mortgages?

Federal Housing Administration Signup and view all the answers

What requirement must be met for federally related purchase transactions according to HUD?

Borrowers must receive notice of available counseling organizations Signup and view all the answers

Under the Fair Housing Act, which of the following is NOT considered a discriminatory practice?

Offering better rates based on financial status Signup and view all the answers

What financial protection does FHA mortgage insurance provide to lenders?

Protection against borrower defaults Signup and view all the answers

Which program is the most common reverse mortgage program offered by FHA?

Home Equity Conversion Mortgage (HECM) Signup and view all the answers

What aspect does the Office of Fair Housing and Equal Opportunity address?

Discriminatory practices against protected classes Signup and view all the answers

Which agency oversees public housing within HUD?

Office of Public and Indian Housing Signup and view all the answers

What is one method HUD uses to support homebuyers?

Offering educational workshops and counseling Signup and view all the answers

Study Notes

Consumer Financial Protection Bureau (CFPB)

Created to enforce federal consumer financial laws and protect consumers
Consolidates responsibility from multiple agencies
Independent bureau within the Federal Reserve System, accountable to President, Congress, and judiciary
Primary regulator of non-depository residential mortgage lenders, brokers, and servicers
Supervises large banks, thrifts, credit unions, and their affiliates (assets over $10 billion) and larger companies in consumer reporting, debt collection, student loan servicing, international money transfer, automobile financing, payday lenders, and private student loan lenders (all sizes)
Functions under the Dodd-Frank Act to:
- Stop unfair, deceptive, or abusive acts in consumer finance
- Enforce laws preventing discrimination
- Accept and address consumer complaints (online reporting system, searchable database)
- Forward complaints to companies and monitor resolution
- Share complaint data with other agencies
- Report complaint data to Congress
- Analyze data for supervision, law enforcement, and rulemaking
- Provide financial education
- Research consumer experiences with financial products
- Monitor financial markets for new consumer risks
States retain authority over licensees and state law enforcement

Department of Housing and Urban Development (HUD)

Created in 1965 to coordinate federal efforts addressing urban housing problems
Consolidates five existing independent agencies:
- Federal Housing Administration (FHA) (1934): Insures mortgages for single-family, multifamily, residential care facilities, and hospitals
- Public Housing Administration (1937): Oversees public housing
- Federal National Mortgage Association (Fannie Mae) (1934): Created a secondary mortgage market
- Urban Renewal Administration (1949): Led slum clearance projects
- Community Facilities Administration (1965): Oversees various community development programs
Current HUD role in residential mortgage lending:
- Houses the FHA, which insures mortgages, protecting lenders against borrower default
- Works through the Government National Mortgage Association (Ginnie Mae), guaranteeing mortgage-backed securities for FHA, VA, and USDA-insured mortgages
- Provides foreclosure avoidance and loss mitigation programs
- Offers homeownership counseling programs, requiring notice of available counseling services to all federally related purchase transactions
- Sets requirements for higher-cost mortgages (written counseling notice)
- Has a Reverse Mortgage (HECM) counseling requirement
HUD's Office of Fair Housing and Equal Opportunity enforces the Fair Housing Act; addressing discrimination in:
- Mortgage loans (making, refinancing, loan information)
- Loan terms
- Property appraisals
- Loan purchasing
- Maternity leave
- Disability
- Other financial assistance related to residential real estate
Maintains the Office of Public and Indian Housing (PIH)
Conducts research on housing and market trends

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Description

This quiz covers the key functions and responsibilities of the Consumer Financial Protection Bureau (CFPB), including its role in enforcing consumer financial laws and supervising financial institutions. Learn about the CFPB's mandates under the Dodd-Frank Act and its impact on consumers and the financial market.