Treasury Secretary Timothy Geithner told Congress last week that the new consumer financial protection agency that was formed by the Dodd-Frank financial reform legislation this past summer will not begin issuing new rules governing banks and other consumer financial entities until at least July 2011.
In light of President Obama's recent appointment of Harvard Law School Professor Elizabeth Warren as an interim adviser for the new agency, it was unclear how soon authority would be transferred from existing regulatory agencies to the new Consumer Financial Protection Bureau (CFPB).
Geithner said, "It is fair to say that until that authority is transferred, which will not happen before July of 2011, and before there is a confirmed director in place this agency by statute has very limited authority to actually write new rules."
Once the new agency is up and running, the CFPB will have broad rulemaking, examination and enforcement powers over numerous entities that offer consumer financial products and services to consumers, including banks, credit unions, mortgage loan originators, debt settlement companies, credit counselors, some attorneys and many others.
A more detailed discussion of the new legislation and the CFPB is available at www.loeb.com/newconsumerfinancialprotectionggency.
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