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A Strong Foundation


One year ago, Congress passed and President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act, which created this new Consumer Financial Protection Bureau (the CFPB). This law establishes a single point of accountability to assure that markets for consumer financial products work for American consumers and for responsible providers of those products. On July 21, the CFPB starts this work, and it will be a cop on the beat to enforce the laws on credit cards, mortgages, student loans, prepaid cards, and other kinds of financial products and services. The purpose of this report is to summarize in one place what we’ve been up to.

Building the CFPB: A Progress Report. Click the image to read the full report.

This letter also appears in a CFPB report entitled Building the CFPB: A Progress Report. Click to read the full report.

The consumer bureau’s statutory obligations are designed to make markets for consumer financial products and services work in a fair, transparent, and competitive manner. This means, in part, creating a level playing field where all providers of consumer financial products and services are subject to meaningful oversight to ensure that they play by the rules. It also means creating a level playing field where both parties to the transaction – the customer and the lender – can understand the terms of the deal, where the price and the risk of products are made clear, and where direct comparisons can be made from one product to another.

Americans aren’t looking for a free ride. They expect to be held responsible for their debts and purchases. And they understand that there are consequences to not keeping up with payments. When consumers are presented with a choice between two financial products, and they know the true costs, the actual benefits, and the real risks of those products, they will be better able to make good decisions for themselves and their families. A level playing field encourages personal responsibility and smart decision-making.

Americans are looking for an honest marketplace. They want to know the costs up-front, so that they’re not blindsided by hidden fees, interest rate changes, or payment shocks. A properly functioning market relies on consumers’ getting the information necessary to make the best decision for themselves and their families. Consumers have the power to drive markets, but only if they’re provided with the basic information that lets them choose products that meet their needs and reject those that do not.

Across the country, there are responsible financial institutions offering products and services that provide real value to their customers. But finding those products in a sea of fine print and complex terms can overwhelm even the most diligent consumers.

If there is a lesson from the past five years, it’s this: We all lose when consumers cannot readily determine whether they can afford to pay back their loans. We all lose when lenders routinely sell credit in ways that hide the risks and costs. We all lose when a broken consumer credit system magnifies risks throughout the economy. We can do better.

At the consumer bureau, we will do better. Over the past year, we have built a strong foundation, and, in the years ahead, the CFPB will work hard for consumers across the country.

Elizabeth Warren
Special Advisor to the Secretary of the Treasury on the CFPB

This letter also appears on page 5 of a CFPB report entitled Building the CFPB, which was originally published on July 18, 2011

  • Aellis7

    Congratulations Ms Warren! This is the beginning of something special for American consumers.  I saw your article in Time Magazine a couple years ago and said to myself, “this is someone to watch.”   It is really a jungle out here and we need to be confident consumers when making our purchasing decisions; not motivated by fear -induced by the media, overzealous realtors or mortgage brokers. America is now realizing that every consumer needs to be a healthy consumer, we cannot afford to have it otherwise. We are truly only as strong as our weakest financial link. Thanks for your passion and dedication to the American consumer. 

  • Mrritte038

    we cant afford our bills in congress now so let’s ad more to the expence account and let the american debt get larger.
    the people of this country are not as stuppid as the government is saying we are. you know if you make $500 per week then you don’t spend $600 per week lke the government does. so you only buy a house that is in your budget it’s not that hard.
    most people learned this in high school. we would be better off spending the money on schools. this is just more government waste.

    • Pogue

      We, Americans can not afford another wall street debacle as we were given in 2007 by Bush. I has ruined may lives and good taxpayers off the rolls. If the Bush tax breaks for the rich worked so well, then tel me where are the jobs.
      We can not afford lack or no regulation. GC Pogue

  • 1Consumer

    Today is July 21, birth of the Consumer Financial Protection Bureau.  Welcome to the world.  I hope you are given an opportunity to do what you were created to do. 

    If as the previous poster said, consumers are so smart and don’t need help understanding consumer finance, then why did hundreds of thousands of them get mortgages they could not afford?  They were duped into believing that house prices would rise and they would be able to afford the mortgages.  My husband works for a nonprofit that provides assistance to low income people with disabilities so that they can obtain homes of their own.  His agency has had no foreclousres because they actually underwrote the mortgages and made sure buyers could afford them.  Education can work but the recent past has proved that you don’t get it from for porfit companies. What you get from them is misinformation. 

    There are too many people in this country with opinions on how the economy should be managed who know nothing about the economy or history.  I’m no expert, but I read what people who are have to say.  Consumers drive the economy. If they aren’t working and spending, any many are not, the economy tanks.  The priority when large numbers of people are not working is getting people to work so they have income to spend to get the economy moving. That’s not going to happen if the govenment cuts too much spending. When people have jobs again they will be paying taxes and the debt will go down.  I’m not saying we should ignore the debt, but it’s not the only concern and right now it should not be the biggest concern. Unemployment was low wihen Clinton was president and we had a surplus.  That will happen again only when people are working. And people won’t be working if the government isn’t spending.  The private sector certainly isn’t creating jobs dispite all the tax cuts they have been getting from the states.

  • Anonymous

    Since the Reagan administration, we have seen a systematic, relentless and rapid dismantling of government regulation of private industry.   It would be foolish to say that the results were all negative; equally foolish, however, is the denial (largely for ideological reasons, one observes) that the public interest has suffered in serious ways.  It isn’t just the financial sector that has capitalized on its legalized opportunities for exploitative gain — other fundamental industries such as energy, transportation and communication have also been frequently destabilized to the detriment of consumers.

    The United States is unique among nations for demanding that its citizens — not corporations, not banks, not any private interest — have the first and last voice in running the country.  Without personal economic freedom and fair opportunity, that voice is hoarse at best, silent at worst.  No one wants to see government overreaching its regulatory role; as long as we are true to our Constitution, however, only strong and independent individuals in maximum control of their own destinies can assure the fairness that effective regulation engenders.

    Ms. Warren and CFPD, thanks for your service, leadership and dedication to the strength and prosperity of our nation.

  • Massey

    I am extremely excited about the CFPB!  I see many people have negative thoughts about the program and feel that they have everything figured out and this company is pointless.  That they can read contracts and feel that by the creation of this program it makes the consumer look uneducated.  To them that is fine if they have everything figured out but most people do need help in understanding certain financial products.  For those people that do need the help this is a great resource for them to be able to utilize.  Many people feel alone and that there is no one to explain the process or help make things earier for them and to be honest when you are actually looking at documents with a financial provider they are very vague at explaining and dont tell you the full information and almost give people a false sense of security.  I see this program really helping people understand and become more educated about financial products.  I myself feel very alone and lost and this will be a great resource to take advantage of.  Thanks CFPB for thinking of the consumer and there needs!

  • Dave

    A level playing field is all anybody wants.  For too long, providers of financial products have used confusion as a tool to befuddle buyers from understanding how to compare products. Simple, clear rules don’t deny any business the right to operate. They just make it easier for consumers to understand what they are buying. Congratulations on your conception and birth. This is how America should operate.

  • Boomer

    I  love, love this agency! Financial products have become so complex that people with financial degrees cannot interpret what they are getting into.  You can read the disclosure and think you understand it, and then reread it and one word will change the entire meaning of what you have just read.  If you don’t catch it you are sunk and have to live with it. The people who write these financial instruments count on you to be to busy, ill informed, distracted and so forth.  Please do not let this agency fall by the wayside.  I would love to see some real teeth in the enforcement and a real cop on the beat.  Thank you for all your hard work in getting this agency up and running it was long overdue!

  • Rainshells

    Buying a house, getting a mortgage, and finding decent insurance was a process that I found to be similar to taking several challenging college courses.    I am a person who scored high on tests and earned a master’s degree — and my conclusion was that the mortgage and insurance industries were setting out to be deliberately confusing.  Now it’s clear that even the financial hotshots really had very little idea where the complex systems they set up were leading!   Thank you Elizabeth Warren for all the work you put in to make this new organization a reality.  I hope it will continue and prove to be the help we need to keep a rein on these large, complex confidence games.

  • innerSpiritRattles

    Whew! Help is on the way. Thank goodness. I’m exhausted.

  • Guest

    Novus ordo seclorum

  • Anonymous

    Novus ordo seclorum

  • Jon the CPA

    Being someone who actually works on compliance consulting for community banks, I think it is not an understatement to say that there is a great deal concern about the Bureau’s rulemaking authority.  Any rules to be made have to take into consideration how the processes actually work and what will create a safe environment for consumers, that is not burdensome to the banks who are actually here to serve the needs of the consumers.  I know for a fact that the increased regulation is causing banks not to be able to offer credit to the neediest of consumers.  Consumer centric regulation tends to hurt the consumers who they are most trying to protect.  That said, I am going to wait and see what the Bureau actually does.  Those who do not have experience in the industry have no business regulating it.

  • Chris Kwalik

    I will push my elected officials to endorse and support this new agency.  If not, they are on notice that they can be voted out.

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