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Posts from June 2012

Understanding reverse mortgages


Today, we released a Report to Congress on reverse mortgages.

The Dodd-Frank Act, which created the CFPB, specifically recognized the unique financial needs of older Americans. Our Office of Older Americans is dedicated to protecting this population. In that effort we have taken a special look at one financial product only sold to them: reverse mortgages. Today’s report presents the findings of that study.

A reverse mortgage is a special type of home loan that allows older homeowners to access the equity they have built up in their homes now, and defer payment of the loan until they pass away, sell, or move out of the home. Reverse mortgages require no monthly mortgage payments, but borrowers are still responsible for property taxes and homeowner’s insurance.

Our study finds that reverse mortgages are complex products that are difficult for consumers to understand. Borrowers are also increasingly using reverse mortgages in ways that are different from what was intended. Nearly half of recent borrowers were in their 60s, and nearly 3 out of 4 borrowers took all of their money upfront in a lump sum. The Bureau is concerned that these borrowers will have fewer resources to pay for everyday and major expenses later in life.

Deceptive marketing is a long-standing problem in this market, with many older Americans receiving solicitations implying that a reverse mortgage is a government benefit rather than a loan. Prospective borrowers are required to attend counseling, but these deceptive advertisements and an increased array of product options make the counselor’s job very difficult.

We have submitted a Notice and Request for Information to gather public input on follow-up questions about reverse mortgages. We are seeking feedback on the factors most important to consumers when they are considering a reverse mortgage, the way consumers use reverse mortgage proceeds, the longer-term outcomes of reverse mortgage borrowers, and certain practices that may differ depending on the type of business that is offering the reverse mortgage . Sign up for our email list and we’ll notify you when the comment period opens. You can view the Request for Information here

Additionally, our Office of Older Americans released a 4-page consumer guide to reverse mortgages and a new and improved set of answers to common reverse mortgages questions on Ask CFPB. We’re also taking complaints on reverse mortgages through our complaint system.

Notice about possible debt consolidation scam


Earlier this month we told you about sweepstakes scams. We now have learned of another scam that we are looking into.

Consumers are now reporting that callers are claiming to be from the CFPB and offering debt consolidation services. These callers are asking for credit card information from consumers.

The CFPB does not offer debt consolidation services. Consumers trust the CFPB to help them and we take that trust very seriously. Unfortunately, scammers are trying to abuse that trust but we will work diligently to address the problem.

If you receive suspicious calls related to the CFPB, please call us directly at (855) 411-CFPB and let us know. Your tips, like the one that led to this update, help us stay on top of how consumers are being targeted.

Chris Willey is the CFPB’s Chief Information Officer.

Design+Technology Fellows: Changing the way government works


Technology and innovation are fundamental to the ability of this 21st-century agency to achieve our consumer protection mission. That’s why we’re launching an outside-the-box technology hiring initiative – the Design+Technology Fellows program.

What is it? We’re asking the brightest, diverse, most amazing minds in graphic design, development and user experience (UX) to join us for two years, linking up with our divisions to create innovative products that will redefine how work gets done in consumer financial protection.

What it’s not? A program with dusty cubicles, stale ideas, tired ways of thinking, or roadblocks to creativity. We want designers and developers who are looking for the promise and exhilaration of a start-up with the ability to influence and directly impact consumers’ lives.

Here’s how it works:

  • First, Fellows will IMMERSE themselves in all things CFPB at our DC headquarters to be introduced to the Bureau’s mission and the Technology & Innovation Team’s process. Fellows will then partner with a division to learn its particular priorities and technology needs.
  • Next, Fellows will HUNKER DOWN in DC or remotely and let the creativity flow. From the location of their choosing, each Fellow will be in constant contact with their partners in the agency to create mission-specific technology solutions.
  • Occasionally, the Fellows will REGROUP with partners in DC to broaden networks and collaborate in person.

During their time with the CFPB, Fellows will work on any number of projects on their own and with divisions throughout the Bureau:

  • Produce visualization and analysis instruments with our Research, Markets, and Regulations team that distill complex data and impact decision-making, or create tools for our public website that translate complex issues into everyday language.
  • Create new tools for our Supervision team with the hundreds of examiners across the country who monitor the practices of the nation’s largest consumer financial institutions.
  • Develop solutions to consumers’ real problems through technology that enables our Consumer Response team to reach people in difficult financial situations.
  • Design tools that enable millions of people to make informed financial choices with our Office of Consumer Education and Engagement.
  • Construct a path to a more efficient and transparent government with our Chief Operating Officer by creating tools that streamline the work of the Bureau.

At CFPB, there is no such thing as business as usual. Our new cohort of Design+Technology Fellows will give us their top-notch skills and two years of their time; we’ll give them the chance to change the lives of consumers and affect how government uses technology. CFPB is an equal opportunity employer.

Want to help us build something awesome? Sign up here.

Save the date, Tampa, FL! (UPDATE: Cancellation)

UPDATE (June 25, 2012):

We have cancelled this field hearing on reverse mortgages due to Tropical Storm Debby. For more information on the storm please visit the website for the Florida Division of Emergency Management.

We invite you to participate in a field hearing in Tampa, Florida on reverse mortgages.

The field hearing will take place on Wednesday, June 27, 2012, at 11:00 am in the Ballroom of the Tampa Convention Center, 333 South Franklin Street, Tampa, Florida.

The field hearing will feature remarks from Richard Cordray, CFPB Director as well as testimony from consumer and civil rights groups, industry representatives, and members of the public.

This event is open to the public and requires an RSVP. To RSVP, email your full name and your organizational affiliation (if any) to

Making consumer complaints available to the public


Today marks a major step forward in our work to protect consumers. In a first by a federal financial regulator, the Consumer Financial Protection Bureau (CFPB) will share with the public individual-level consumer complaint data received by the CFPB.

Check out the Bureau’s policy statement for more details.

What does this mean for consumers?

No longer will consumer complaints only be known to the individual complainant, bank, regulator, and those in the public willing to pursue this information through the Freedom of Information Act. Instead this data-rich window into consumer financial issues will be widely available to everyone: developers, policymakers, journalists, academics, industry, and you. Our goal is to improve the transparency and efficiency of the credit card market to further empower American consumers.

And just to be clear, no personally-identifiable information, such as a consumer’s name, credit card number, or mailing address will be made available via the Consumer Complaint Database.

The Bureau’s Consumer Response function receives consumer complaints on a wide variety of products including credit cards, mortgages, student and other consumer loans, and other bank products (such as checking and savings accounts). And while the Consumer Complaint Database initially will contain only credit card complaints, the Bureau is proposing to extend the Database to all other consumer financial products and services covered by the CFPB.

What happens when a consumer files a complaint?

When a consumer files a complaint, Consumer Response intake specialists review each one for completeness, jurisdiction, and non-duplication. Complaints that meet these criteria are then forwarded to the appropriate company (bank or nonbank) for review and resolution. Companies are given 15 days to provide a substantive response to each consumer complaint, and are expected to resolve and close all but the most complicated complaints within 60 days.

Consumer Response prioritizes for investigation certain complaints based on a handful of risk-based criteria including the failure of a company to respond in a timely manner and those in which the consumer disputes the company-provided resolution. When potential legal violations are detected, Consumer Response works closely with other parts of the Bureau including the offices of Supervision, Enforcement, and Fair Lending to ensure potential violations are dealt with appropriately.

Throughout this process, consumers have the ability to log into the CFPB’s website to check the status of their complaint (and, when appropriate, dispute the resolution provided by the financial institution).

Why beta?

Today, we’re releasing the beta version of the Consumer Complaint Database. Why beta? While the complaint information in the database is actual data, the functionality, data fields, and “look and feel” of the database are all in the beta stage of development. In other words, this version of the Consumer Complaint Database is only the beginning. In addition to potentially enlarging the Database to include all other consumer financial products and services covered by the Bureau, we are looking into potentially expanding it in a number of other ways. These include the possible addition of narrative fields (to the extent we can do so while protecting personally-identifiable information), more sub-product and sub-issue data fields, regular and normalized data visualizations, and expanded data tools.

Lastly, you will note that initially the Database only contains complaints received by the CFPB on and after June 1st. Additional retroactive data will be added when we remove the “beta” tag later this summer.

What do you think?

We encourage you to tell us what you think about the Consumer Complaint Database by telling your story. All comments and suggestions are welcome.

Scott Pluta is the Chief of Staff and Acting Assistant Director for Consumer Response at the Consumer Financial Protection Bureau.

CFPB Ombudsman’s Office — A resource available to you


Did you know that the CFPB Ombudsman’s Office is a resource that is available to you? We are an independent, impartial, and confidential resource to help you resolve process issues arising from CFPB activities.

You may have encountered an ombudsman in other areas of your life – maybe you’ve read a newspaper ombudsman’s column, used the ombudsman at an office of a state or local government agency, or perhaps your school has one.

The word ombudsman originated over two hundred years ago in Sweden. Nowadays there are two main types of ombudsmen. Some – like the CFPB Ombudsman’s Office – work to resolve issues between the public and the government; others address internal workforce concerns. Regardless of focus, all ombudsmen look at individual and systemic issues and may make recommendations to address concerns.

The CFPB Ombudsman’s Office follows the essential ombudsman tenets of independence, impartiality, and confidentiality, as described further on our webpage, which together allow us to advocate for a fair process.

Wondering when you should use the CFPB Ombudsman’s Office?

First, we ask you to try the Bureau’s regular processes to get help on your financial product, such as a mortgage or credit card, by filing a complaint with the CFPB. If during the complaint’s lifecycle, you have an issue with the CFPB’s complaint process that cannot be resolved by the CFPB hotline staff (1-855-411-2372), please contact us. You also may contact us if you would like to keep your concerns confidential.

My team and I look forward to hearing from you!

Wendy Kamenshine is the CFPB Ombudsman