Help readers understand the new Consumer Financial Protection Bureau

With news breaking that President Obama is ready to appoint a chief for the new Consumer Financial Protection Bureau , it’s not a bad time for a consumer-oriented package taking a look at the implications of the new bureau along with existing consumer resources in your state.

First, the new bureau itself; if you haven’t had time to familiarize yourself with this new creation that was part of last year’s financial regulatory overhaul, here’s a direct link to the Consumer Financial Protection Bureau’s website — whose slogan is “Know before you owe.”  It opens for business this week; in addition to the explainers on the website, here’s a hot off the press essay about its aims by Elizabeth Warren, the champion of the new agency and one-time candidate to lead it. | From Time: Richard Cordray in 10 Quotes.

In addition to a “what will it do” explainer, other angles off the national news could include a Q&A or panel discussion with local lenders about the qualms many banks feel regarding the bureau’s mission.  Also, what will compliance entail?  Will forms, files, procedures, personnel, etc. have to change in accordance with transparency and ease-of-use goals the bureau has set for financial transactions?  How will the costs ripple through the lending system?

On the flip side, get some input from reputable debt/credit counseling services and other consumer advocates about how the new agency might help, or for case studies of people who got tangled up through uninformed borrowing.  Try your state’s branch of the Jump$tart Coalition for Personal Financial Literacy (keeping in mind some of its members include representatives of the for-profit financial services industry.)

And because the name of the agency might lead the casual reader to think it’s an overarching “consumer protection” agency, I think it’s important to explain what it won’t do and what other resources are available.  This CBS Moneywatch column by Marlys Harris, “Consumer Protection Bureau: Please ban these four products!” for example, expresses some understandable frustration about the relative toothlessness of the bureau.

You might want to do a round-up of other consumer help agencies in your state, from the attorney general’s office to the financial services regulator to building and remodeling regulators to postal inspectors who investigate scams and mail fraud.   Readers will appreciate a clip-and-save on where to go with what problems, along with a realistic portrayal of potential outcomes:  Few regulators actually get cash or other losses back for consumers who have been defrauded or victims of shoddy services.  It just doesn’t happen.  Federal, state and local governments simply don’t have the staff or money to pursue complaints on a case-by-case basis and many won’t deploy investigators until a critical mass of complaints are received.  Even in that sort of case, restitution is rare.

Consumer Credit Counseling of Kennewick merges with Ohio company ...

Consumer Credit Counseling Service of Kennewick merged with the multi-state network of Apprisen Financial  Advocates in July.

The merger will allow Consumer Credit Counseling Service to expand its counseling and financial education efforts in the region, while keeping its expenses in check, said Laurie Tufford, CEO of Consumer Credit Counseling Service.

Tufford said the 42-year-old nonprofit organization experienced a 36 percent increase in its medical insurance costs this year alone.

At the same time, donations from the financial institutions that contribute to CCCS in return for its services have dwindled, although the organization is still providing its services.

Apprisen, which is located in Columbus, Ohio, is a national nonprofit credit counseling agency that has been around since 1955. In 2009, its certified financial counselors provided nearly 70,000 counseling sessions to individuals and families on money management, debt counseling, bankruptcy counseling and education, and HUD-approved housing counseling.

Tufford said Apprisen’s business model is very like that of Consumer Credit Counseling Services, making the business a perfect fit. The CCCS name will not change and clients will see little difference in the services they receive.

“Our core services haven’t changed. We’ll be consolidating back office support and accounts receivable and accounts payable,” she said. “That will allow us to do more education.”

Tufford said CCCS was started in 1969 by a group of local creditors who realized that some clients were getting into financial trouble.

“It was designed to be a referral source for people who needed everyday financial literacy,” she said.

Tufford said Apprisen has also merged with several other Consumer Credit Counseling Services throughout the Northwest, including one in Yakima and one in Tacoma.

The company has a 24-hour call center, a good, interactive website and a research and development team to keep ahead of consumer spending and financial trends.

That will allow Consumer Credit Counseling Services to focus on its face-to-face service, Tufford said.

“We can go back and do what we do best — counseling people in the community,” she said.

Tufford said the nonprofit had already downsized, closing its branches in Walla Walla, Hermiston, Ore. and Pendleton, Ore. this spring.

All but two of the Kennewick offices employees will be retained, and Tufford will remain at the office, she said.

The economics of consumer credit

Consumer credit counseling service, plans and working suggestions

The impact of waiving finance charges on debt plans at consumer credit counseling services, a report prepared for the National Foundation for Consumer Credit

Scam-Proof Your Life, 377 Smart Ways to Protect You & Your Family from Ripoffs, Bogus Deals & Other Consumer Headaches

Consumer credit counseling service study