The new pup watching our money

In 2008, my wife and I were forced to close our gift shop. We were left with $100,000 in debt. We saw an ad for a company that said it helps people get out of debt. So we tried it. We paid an ungodly amount upfront. Then they told us not to file for bankruptcy and not to pay our credit cards. Months went by without anything being done to settle our debt. Our credit rating was ruined and we were getting calls from debt collectors. We ended up filing for bankruptcy anyway -- and this company still has $10,000 of our money.

Suddenly, I started seeing fees show up here and there in my checking account. I couldn't understand what they were for. After this happened for awhile, I got a letter in the mail from my bank saying it charges a fee for transferring money between checking and savings accounts too often. I had never been told that before. I had always put my paycheck into my savings account -- where I can't see it -- and then I would transfer some to my checking account when I need to pay a bill. Don't I have the right to put my cash where I want?

I got a letter in the mail from a company I had never heard of saying my wages were about to be garnished. I called the company, and they said they had already filed legal action. After going to the courthouse, I found out my identity had been stolen. I went to court to fight it, and the judge had the made-up debt erased from my credit report. The company didn't show up to court, but I kept getting harassing calls from them -- still threatening to sue me and garnish my wages even though I told them they had the wrong person.

The bureau will crack down on debt-relief companies that telemarket their services, by enforcing an FTC rule that bans them from charging upfront fees before results are delivered and from misrepresenting their services - like swearing to cut your debt in half if they can't. Consumer groups, like the National Consumer Law Center, hope the bureau will expand the regulation beyond just firms that telemarket their services. While the bureau will immediately have the power to regulate debt settlement companies affiliated with large banks, it will not have any power over non-bank debt-fixers until a director is confirmed to run the bureau.

The CFPB will oversee financial institutions with $10 billion or more in assets and make sure they comply with existing rules. It will also identify specific risks to consumers like hidden fees or unfair interest rate hikes and send examiners to inspect their books. One step the bureau may consider: Issuing a checking account disclosure form that will clearly lay out fees and account requirements in the same manner across all financial institutions so that consumers can easily comparison shop. The form, which was proposed by The Pew Charitable Trusts, would also clarify a consumer's right to opt-out of overdraft protection.

The CFPB will be able to take legal action against debt collection companies that make illegal threats, harass consumers for debts they don't owe and for collecting debts after they have expired. But the bureau won't be able to craft any new rules until a director is confirmed. The agency will also collect complaints from consumers to identify systemic areas of abuse. Nominated director, Richard Cordray, has a record of cracking down on debt collectors. He took legal action against abusive collectors during his former role as Ohio Attorney General, and warned in 2009 that "a line must be drawn to keep debt collection from crossing into harassment."

I was four hours late making a payment and my bank raised the interest rate on my credit card from 3.99% to 15% -- after slapping on a late fee. Then, I was late a second time. I sent in a payment four days after it was due. My credit card company upped my rate to 29.99% and my minimum payment was raised from $200 per month to $500 per month. After being a client with unblemished credit for 20 years, the $8,000 balance on my card jumped by $2,500 in one year. It's hard to believe that this really happened -- they are such crooks.

Starting immediately, the CFPB will serve as the muscle behind the CARD Act, which limits the interest rate increases and fees credit card issuers impose and requires better disclosures. It will also have the power to craft new regulations aimed at preventing banks from getting around the credit card laws. For consumers, it plans to simplify and streamline credit card paperwork to make the risks and costs associated with credit cards more clear (there is no timeline in place for doing this yet). The bureau will also handle consumer's credit card complaints and take legal action if necessary.

The brainchild of Harvard professor Elizabeth Warren, the Consumer Financial Protection Bureau was introduced in the Dodd-Frank Act to protect consumers from predatory financial products. The agency is just a pup now, but critics want to keep it on a tight leash. The Senate must confirm a director before the bureau can issue new rules and regulate non-bank financial service providers, such as payday lenders. So it remains to be seen if this new watchdog will stay docile or start showing its teeth.

• President Obama nominated Richard Cordray, former Ohio Attorney General and five-time "Jeopardy" champ, to lead the CFPB.
• Number of employees: 400-plus and growing
• Fiscal 2011 budget: approximately $142.8 million

The bureau will enforce laws governing private student loans -- including the requirement that private lenders disclose alternative federal loan programs that may be cheaper. The CFPB will also regularly check up on non-bank private student lenders and lenders affiliated with banks and credit unions with more than $10 billion in assets to make sure they are complying with regulations. The bureau won't be able to create new rules or expand existing rules for non-banks, however, until a director is in place. The CFPB will also appoint an ombudsman who will help respond to consumer complaints and help mediate in disputes with borrowers.

I took out an $8,000 student loan to put my son through college. When my son got sick during his first year and had to withdraw, I called the college and asked for that loan to be returned. They said I wouldn't be able to get my money back. I didn't know what to do, so I wrote to my Congressman. Somehow, he got them to return the money. But my loan provider says I now owe $1,000 in interest - which I don't think I should have to pay. I wish someone would explain to me what's going on here.

The bureau now requires lenders and creditors who deny a consumer's application for a loan or credit card -- or who give less favorable terms for one of these products -- to disclose the credit score and other factors that they used to make their decision. The CFPB will also enforce rules that require bureaus to provide accurate credit reports and to have an effective process in which consumers can get mistakes fixed. The CFPB recently released the results of a study that found that the credit score consumers receive is often different from the score lenders receive.

Payday lenders typically sell short-term loans - often targeting financially-desperate, low-income consumers. Interest rates can run as high as 500% and fees are steep -- causing many consumers to spiral into debt. The Dodd-Frank financial reform bill gives the CFPB power to regulate payday lenders, but the bureau has yet to specify any regulations it is considering -- and it won't be able to propose any rules until a director is confirmed. One thing the bureau won't be able to do for now is put a cap on the exorbitant rates payday lenders charge - the Dodd-Frank regulations will prevent it from doing so.

The agency can't crack down on non-bank mortgage companies yet, but it will be able to oversee mortgage operations of banks with more than $10 billion in assets, which account for 65% of all mortgages. The CFPB will also finish crafting rules that will require brokers to verify a consumer's income before extending a loan -- to ensure the borrower can repay it. As part of its Know Before You Owe initiative, a new mortgage disclosure form - which will list all costs and risks on the front page - will be proposed in July 2012 for final comments from consumers and implemented at some point after that.

A credit card debt was showing up on my credit report after I paid it off. I submitted documentation that I had settled the debt to the three credit bureaus last September. One took it off my report immediately. Another credit bureau took it off a couple months ago - only after the Ohio Attorney General got involved. But I'm still fighting with the third credit bureau. They keep saying it will be 45 days. Come September 2011, it will be eight sets of 45 days. This is the only bad debt on my report. I can't believe there wasn't a government agency that oversaw and controlled these inefficiencies before.

Right around the time I turned 18, I started to qualify for credit offers and payday lenders started viciously spamming my email. I wanted money that seemed free and I didn't understand the repercussions, so I responded to an email saying I could get a $300 payday loan if I applied in the next 10 minutes. I ended up paying $650 for that loan. I had no idea what I was getting myself into. On top of that, after I paid off the loan, they sold my information to some company in India that wouldn't stop harassing me.

My wife and I were offered a sack of money so that we could buy our house. I was extra careful and looked at the details of the loan, and noticed that the payments ballooned after two years - from $300 every two weeks to $1,000 every two weeks. The broker assured us that we'd be able to refinance by the time the two years were up. But those two years passed, and we still weren't able to refinance. The thousand dollar payments then kicked in, and we just couldn't afford them. So we went into a downward spiral and lost our house.