Which federal act created the Consumer Financial Protection Bureau?

Prepare for the MLO Federal Laws Exam with comprehensive questions and hints. Master federal mortgage loan laws and ensure your success with detailed explanations and flashcards.

The Dodd-Frank Act is the federal law that established the Consumer Financial Protection Bureau (CFPB). Passed in response to the 2008 financial crisis, the Dodd-Frank Act aimed to promote financial stability and protect consumers from predatory lending practices and other financial malpractices. It includes provisions for stricter regulations on the financial industry, ensuring transparency and accountability, and creating the CFPB specifically to oversee consumer financial products and services.

The formation of the CFPB was a significant step towards enhancing consumer protections in the financial sector, providing resources for consumers to submit complaints, obtain information on financial products, and hold financial institutions accountable for their actions. This aligns with the Dodd-Frank Act's overarching goal of preventing another financial crisis and protecting consumers from unfair practices.

The other acts listed—such as the Gramm-Leach-Bliley Act, Sarbanes-Oxley Act, and Equal Credit Opportunity Act—focus on different aspects of financial legislation, such as financial institution regulations, corporate governance, and prohibiting discrimination in lending, but none specifically established the CFPB. Therefore, the Dodd-Frank Act is the only correct answer regarding the creation of the Consumer Financial Protection Bureau.

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