Mortgage Financing Frauds in the US: An Analysis of CFPB Complaint Database

Cfpb And The United States Financial Ecosystem

CFPB has the authority to implement and enforce federal financial consumer law as per the US Consumer Financial Protection Act of 2010. The main functions of the CFPB are (1) taking actions to reduce abusive and predatory behavior of lending companies that violate the law and (2) getting the consumers reimbursed for their damages incurred due to deceptive and unfair practices of the lending companies. CFPB also has a statutory mandate to identify and remove the structural barriers to entry of new financial institutions, strengthen competition, and encourage innovation to reduce market inefficiencies that are harmful to the consumers of these financial services. CFPB achieves this by coordinating with the federal and state governments and partnering with the American Consumer Financial Innovation Network¹, the Securities and Exchange Commission and the National Association of Attorney Generals.

CFPB also works on increasing financial inclusion and consumers' financial knowledge by disseminating information to help consumers make rational decisions. Thereby, CFPB, through monitoring, ensures that the financial transactions are fair, leading to depth in the market and thus boosting the overall economy. By monitoring, researching, educating, and empowering consumers of the financial practices, tools, and strategies, as well as their rights, CFPB can promptly disseminate information about hot scams to the public. Some common scams include the student loan relief scam, unemployment benefits scams, social security benefit scams, and advanced child tax scams, amongst others. The informed consumers and the financial institutions then can take actions to reduce exposure risk to such scams.

Figure 1.

CFPB Complaint handling procedure