Consumer bureau, Chicago join forces in hunt for predatory lending

The city of Chicago and the Consumer Financial Protection Bureau (CFPB) are joining forces in a first-of-its-kind collaboration aimed at protecting consumers.

CFPB Director Richard Cordray and Mayor Rahm Emanuel jointly announced Wednesday that they would be sharing information in efforts to crack down on predatory lenders and financial scams.

"Partnerships like this one are at the heart of our efforts to improve how consumer financial markets work for people," said Cordray in Chicago. "You are on the frontlines, and we are glad to join you there and partner with you as a new federal agency focused exclusively on in consumer financial protection."

Under the agreement, Chicago will provide the CFPB with information about lending activity within its borders. In turn, the CFPB will bring to bear the analytical tools it has developed as well as its "broad mandate to protect consumers against illegal practices," according to Cordray.

The agreement comes as Emanuel, President Obama's former chief of staff, is making fraud protection a top priority.

On the city's end, Chicago is introducing a new ordinance to regulate and license debt collectors, aimed at making sure they adhere to proper fair collection guidelines and steer clear of illegal tactics. Furthermore, new zoning regulations will limit the ability of payday lenders and other "predatory financial services" to spread across the city, which is also gathering information on unfair ads tied to collections on small loans and mortgages.

“We must use every tool available to us to protect responsible working families from businesses that make their profits through financial fraud and scams,” said Emanuel. “These tools will enhance Chicago’s efforts to stop the scams and fraud before they can claim a victim.”

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