Banking Practice Exam 2025 – 400 Free Practice Questions to Pass the Exam

The Consumer Financial Protection Bureau (CFPB) was established under the Dodd-Frank Wall Street Reform and Consumer Protection Act, which was enacted in response to the financial crisis of 2007-2008. The purpose of the CFPB is to oversee and enforce consumer protection laws in the financial sector, aiming to ensure that consumer interests are prioritized, particularly in areas such as mortgages, credit cards, and other financial products.

The creation of the CFPB also reflects a broader movement towards increasing accountability and transparency in financial markets, addressing issues that contributed to the economic downturn. This focus on consumer protection is one of the key pillars of the Dodd-Frank Act, which seeks to prevent predatory lending and establish fair practices for all consumers in financial transactions.

In contrast, the other acts mentioned do not pertain to the establishment of the CFPB. The Hope for Homeowners Act primarily addresses issues related to mortgage assistance for struggling homeowners. The Fair and Accurate Credit Transactions Act focuses on enhancing consumer protections in how credit information is reported and utilized. The Sarbanes-Oxley Act deals with corporate governance and financial practices, particularly for publicly traded companies, rather than directly addressing consumer financial protections.