Certified Financial Management Specialist Practice Exam

What is the main focus of the Consumer Financial Protection Bureau?

1. Ensuring bank profitability

2. Consumer protection in financial services

3. Regulating capital requirements

4. Managing public debt

The correct answer is: Consumer protection in financial services

The main focus of the Consumer Financial Protection Bureau (CFPB) is consumer protection in financial services. Established in response to the financial crisis of 2007-2008, the CFPB was created to help consumers understand their financial options and to protect them from unfair, deceptive, or abusive practices in the financial sector. This includes overseeing various products such as mortgages, credit cards, loans, and other financial products. The CFPB takes a proactive approach to ensure transparency in financial transactions, providing consumers with the necessary information to make informed decisions. It also has the authority to enforce federal consumer financial laws and address consumer complaints, thus safeguarding the interests of consumers in an industry that can often be complex and confusing. In contrast, the other options focus on aspects that fall outside the CFPB's primary mandate. For example, ensuring bank profitability is typically the concern of financial institutions themselves, not a consumer protection agency. Regulating capital requirements is a function usually managed by banking regulators and is aimed at ensuring the stability of financial institutions, rather than directly addressing consumer concerns. Managing public debt is the responsibility of the treasury or financial departments tasked with fiscal policy rather than an agency focused on consumer financial protection.