Jeremy Hobson: Well tomorrow is the official launch of the new Consumer Financial Protection Bureau, the CFPB. And for more on what that means for us consumers.
Let’s bring in L.A. Times Consumer Columnist David Lazarus. Good morning.
David Lazarus: Good morning.
Hobson: So what is this CFPB going to be able to do?
Lazarus: Right out of the gate, it’s going to be looking after credit cards, it’s going to be looking after mortgages, it’s going to be looking after a number of products like that that for many consumers can be very troublesome.
Hobson: How would that be felt for me? If I go sign up for a new credit card, is there going to be something different that happens as a result of this agency?
Lazarus: Well you won’t have a CFPB person standing over your shoulder, making sure that it all goes well, but you will have some recourse. For example, a lot of people are always contacting me, saying, ‘where should I turn if I have some problem?’ Here’s the place now.
Hobson: And they’ll actually be able to do something about it?
Lazarus: Well they say they will. But it’s going to be a mixed bag at first. Some of their new powers — for example, payday loans, which have been largely unregulated in the past — that’s a new critter. Well they’re not going to be able to regulate those until they have a director in place, and as we’ve been seeing on the political front, that’s still kind of a coin toss.
Hobson: OK, well let’s zoom out a little bit. If this thing had been in place a few years ago, could it have really prevented the kind of crisis that we saw in housing or in lending or in any of the parts of the economy that went bad?
Lazarus: I would say yes. And the key reason here is that the other agencies that are out there, that look after this industry, they’re concerned first and foremost with the stability of the banking industry — not with the consumer. Here’s an agency that looks at it completely from the other side and says, we’re going to look at it from the consumer’s point of view and make sure the consumer isn’t hurt. So I would think that if anyone could have raised a red flag early on, these are the guys who could have done it.
Hobson: But don’t people have some personal responsibility for their decisions as a consumer?
Lazarus: Absolutely they do. And there’s no question that the onus should be on all consumers to make sure that they’re informed consumers and smart consumers. But that said, it’s not a level playing field. There are businesses out there that will, at times, tilt things in their direction, and you know, maybe take advantage of people. When that happens, you want to make sure that there’s a teacher in the room to split the kids apart.
Hobson: L.A. Times consumer columnist David Lazarus, thanks so much.
Lazarus: Thank you.
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