Federal Financial Agencies Sign Pact To Work Together

The Director of the Consumer Financial Protection Bureau has signed a pact with his counterpart from the Federal Trade Commission, to ensure that duplication of roles and responsibilities will not take place in the execution of their legal mandates. The memorandum of understanding provides an outline and framework for sharing information on active cases, investigations and enforcement actions.  It also contains guidelines for writing of rules between the two bodies. The purpose of the agreement is to streamline the scope and mode of operations between the two government agencies.

Earlier on, some republicans and business lobby groups had expressed concern that the new office would pose further risk to the US economy, already beleaguered with rules and regulations on credit. Some quarters were also not satisfied with the manner in which the CFPB Director was appointed to office.  However, the Director gave an assurance that both government agencies would work hand in hand, to ensure effective federal monitoring of financial products on behalf of consumers. His FTC counterpart acquiesced with the statement, declaring that the agreement would streamline the operations of the two government agencies.

CFPB arose from the Dodd-Frank financial reform Act 2010. According to the bill, its mandate is to oversee and monitor such financial products as credit cards, mortgages and loans, in conjunction with the FTC. The US Chamber of Commerce considered the signing of the agreement as an effort in good faith, despite the serious concerns that businesses have towards government regulations.

CFPB began operating in July 2011. It has federal authority to supervise the operation of traditional banks and private financial entities such as payday lenders, mortgage service providers and lending companies. However, things have not been so rosy for the new Director at the helm. Republican representatives and some lobby groups oppose the manner of his appointment as Director. The US president appointed the heads to the CFPB and National Labor Relations Board through a recess decision, although the senate was not technically in recess. This led to outcry from republican senators who had already blocked a vote for nominee candidates.