Three years ago, as our economic system unraveled, some of the most commonly heard questions were: Why wasn't anyone paying attention? How could lenders give thousands of loans to people who couldn't possibly afford to pay them?
How could appraisals be so wildly inflated? How could investment companies place bets that a security would fall in value and still sell it to their customers?
Was there no one in the alphabet soup of regulatory agencies looking out for consumers as finance and investment professionals ran circles around them in a blaze of incomprehensible transactions?
The answer was no, there was no agency charged solely or primarily with protecting consumers.
This is why a key element of the Dodd-Frank Wall Street Reform and Consumer Protection Act passed last July was creating an independent agency to stop "unfair, deceptive, or abusive" lending practices. It's known as the Consumer Financial Protection Bureau.
The CFPB officially came to life Thursday but has not wasted any time during the gear-up phase. A high, early priority was to simplify the forms borrowers sign when they close on a loan to buy a house. The agency-in-waiting met with institutions and consumers then drafted two versions, put them up on its Web site and asked for comments. Some 14,000 people have responded.
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