The Government Accountability Office found that the agency responsible for consumer protection in the financial sector has failed to implement a systematic process for prioritizing financial risks. The lack of an agency-wide process at the Consumer Financial Protection Bureau may allow companies that offer financial products and services, such as credit cards and loans, to engage in practices that pose financial risks to consumers, GAO said in a Dec. 21 report.
GAO cited that “companies may obscure the costs of products or use lending practices to trap consumers in a cycle of debt.”
“Implementing a bureau-wide prioritization process could help to ensure that CFPB effectively focuses its resources on the most significant financial risks to consumers and enhances its ability to meet its statutory consumer protection objectives,” the agency said.
GAO also found that CFPB is failing to utilize its existing policy tools, such as rulemaking, supervision, enforcement and consumer education, to address the risks.