By Katalina M. Bianco, J.D.
The Consumer Financial Protection Bureau has published its first wave of consumer complaint narratives via the bureau’s new initiative to reveal consumer complaints stemming from its consumer complaint database. More than 7,700 consumer stories about problems they’ve encountered concerning mortgages, bank accounts, credit cards, debt collection, and more now are live and available to the public. The bureau simultaneously issued a request for comments on whether there are ways to enable the public to more easily understand and make comparisons of the complaint information.
"Publishing these consumer stories today is a historic milestone that we believe will lead to better outcomes for everyone," CFPB Director Richard Cordray said. He added that the CFPB’s work is improved by hearing from consumers.
Collection of complaints. The CFPB began accepting complaints as soon as it opened its doors for business in July 2011. The bureau currently accepts complaints on consumer financial products, including: credit cards; mortgages; bank accounts; private student loans; vehicle and other consumer loans; credit reporting; money transfers; debt collection; and payday loans. As of June 1 of this year, the CFPB has handled more than 627,000 complaints, with mortgages and debt collection being the most frequent subjects of the complaints.
Consumer Complaint Database. The CFPB’s Consumer Complaint Database was unveiled in June 2012. According to the bureau, it is the largest public collection of consumer financial complaints in the U.S. The bureau describes the database as including "basic, anonymous, individual-level information about the complaints received, including the date of submission, the consumer’s zip code, the relevant company, the product type, the issue the consumer is complaining about, and how the company handled the complaint."
Bureau policy. The CFPB finalized a policy in March 2015 that is intended to empower consumers to share their stories to the public when they submit complaints to the bureau. According to the CFPB, since the launch of this added feature to its database, more than half the consumers who submitted complaints to the bureau have "opted in" to share their stories with the public. Starting immediately, consumer narratives that have been "scrubbed of personal information," will be added to the complaint database on a daily basis.
The policy outlines the specific procedures and safeguards the bureau has put in place to publish narratives in the database and includes safeguards for removing a consumer’s personal information and ensuring the informed consent of any consumer who participates, the CFPB said. Under the policy, companies have 180 days to select an optional public-facing response to be included in the public database. These company responses now are included in the database.
Comment request. The CFPB simultaneously issued a notice requesting comments from the public on ways to make the data gathered in its complaint database more useful to the public. Specifically, the bureau is requesting feedback on best practices for "normalizing" the raw complaint data it makes available via the database so they are easier for the public to use and understand. According to the notice, to normalize data is to transform "raw" data so that they may be compared in meaningful ways.
Reviews. The Americans for Financial Reform called the publishing of the narratives "a breakthrough for consumers" and said that the bureau’s action will "vastly expand the value of its complaint system." AFR noted that banks and lenders have opposed publishing the narratives, but AFR believes that "financial companies also stand to benefit from the ability to hear about consumer experiences at other firms as well as their own, spot opportunities for improvement, and correct problems before they get out of control, the way bad mortgage lending did in the runup to the financial crisis."
The Consumer Bankers Association, on the other hand, disagreed with the CFPB’s publishing of “unverified complaint narratives.” The CBA said that the association agrees with the need to “normalize the complaint data” and is pleased that the bureau is requesting comments on the best way to go about doing that. However, the CBA stated that it is “profoundly disappointed the Bureau is releasing the public narratives.” CBA President and CEO Richard Hunt said that he believes that the majority of banks will not respond publicly “but will continue the long held tradition of speaking with their customers in confidence.”
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