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New finance watchdog: how much bite?

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The CFPB's power will be limited unless Congress approves a director. Powers transferred from other agencies are already vested with the CFPB, but any new rulemaking authority from the 2010 statute won't take effect until a director is in place. The Senate Banking Committee has held a confirmation hearing on President Obama's choice for the post, former Ohio Attorney General Richard Cordray. But GOP senators have vowed to block any nominee until the bureau is led by a board instead of a single director, Congress has the power to approve its budget, and other regulators have more say in bank oversight.

When should consumers contact the bureau with a complaint? Advocates disagree. In Susswein's view, the best approach is to work first with one's company to see if a fair and efficient solution can be found. Ms. Feddis agrees that consumers should go first to their card issuer before getting regulators involved.

Others, however, see value in putting the CFPB's muscle to work as soon as problems arise.

"I would [go first to the CFPB] because I would know that somebody would be watching the company," says Pamela Banks, senior policy counsel for Consumers Union, the nonprofit group based in Yonkers, N.Y., that publishes Consumer Reports. "Then you know the complaint won't be with the company for months and months without hearing anything."

Although mortgage-related issues rank as a priority for the CFPB, consumers for now need to use other channels to get concerns resolved while the agency ramps up. People facing foreclosure, for instance, are being referred to counselors in the Department of Housing and Urban Development's HOPE hot line.

Within the coming year, mortgage applicants can expect to use simplified forms that CFPB is now developing. Also in the works are resources to educate certain groups about their special rights as borrowers, such as military families and senior citizens.

"I would encourage people to reach out to the CFPB, though not with the expectation that it will solve their individual problems," Ms. Schloemer says. "By reaching out, they might keep someone else from falling [into financial trouble]."

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