We have a lot of “watchdogs” in our government. Watchdogs, in short, do exactly what they sound like they do. Like your watchdog at home, they watch to make sure that things happen fairly and that no one gets ripped off.

In 2010, another watchdog was added to the ranks: The Consumer Financial Protection Bureau, as a part of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010. The bureau was created in response to the increasing credit problem in the United States, where consumers were making unwise decisions based on mere ignorance. Basically, people weren’t doing their research before getting into binding contracts and getting in a lot of trouble.

According to their website, the CFPB has three major purposes:

Educate: Education is power and prevention; if people are educated instead of shielded, they’re more likely to make good decisions in the future. The bureau’s goal is to inform the public of their rights as consumers.

Enforce: There are various laws in place to protect consumers from credit companies. A lot of these laws involve how companies are to deal with unpaid balances, limits on late fees, rules on how to keep interest from going out of control, and a bunch of other things. This bureau is meant to enforce those laws.

Study: Research is vital to understanding the best way to go forward with the economy. The CFPB monitors and researches risks to consumers from both consumer habits and new events within the economy. Researching these risks helps to protect consumers from repeating foolish and uneducated mistakes.

The bureau is fairly new, and there is a bit of debate about its usefulness. It’s only been around for a few years at this point, and it seems to be effective. What have you read about this company? Do you think it was necessary to make?