By Andrew A. Turner, J.D.
Multiple trade associations have taken the opportunity to caution the Consumer Financial Protection Bureau on the need to publish only accurate and reliable information that will not mislead consumers in its consumer complaint database. The CFPB had sought input on ways to enable the public to more easily understand company-level information and make comparisons by "normalizing" the raw complaint data it makes available via its Complaint Database. The comment period closed Aug. 31, 2015.
American Bankers Association. The CFPB should refrain from efforts to “normalize information derived from consumer complaints unless and until it has adopted measures to promote the accuracy and integrity of the complaint information posted on its website,” according to the ABA. It recommends that the CFPB work with financial institutions to identify metrics by which complaint information could be normalized. Because normalization may require new, confidential, and proprietary information from financial institutions, the ABA cautioned that the CFPB should demonstrate the utility of the normalized data before subjecting institutions to a new mandate.
Consumer Bankers Association. The CFPB has a duty to improve the accuracy of the complaint data, according to the CBA. The trade association urges the CFPB to shift their focus and verify the data before they work to normalize it. “While industry has long advocated for normalization, we continue to be concerned consumers are being misinformed by unverified data; stress the importance of cautiously assessing how to properly normalize data; and urge the Bureau to adopt informed disclosures to promote transparency in the marketplace.”
The CBA recommended that the bureau establish an appeals process similar to that of the Consumer Product Safety Commission. Specifically, the CBA urges the CFPB to authenticate the substance of the database by establishing a mechanism in the private company Portal for companies to flag communications that do not amount to complaints, and thus should be eliminated from the database.
Independent Community Bankers of America. While ICBA has expressed its understanding of the CFPB’s intent to provide consumers meaningful metrics for comparing data regarding the providers of financial services and products, it believes that the bureau must address important data integrity and information security concerns before undertaking any normalization of complaint data. The trade association also urges the bureau to open any proposed data normalization metrics to public comment. Finally, ICBA recommends that if the CFPB moves forward with this normalization initiative, it should use overall market share by product type as the metric for data normalization.
ACA International. In its comments, ACA International, the Association of Credit and Collection Professionals, stressed that to the extent the complaint database remains publicly available and held out as a source for informed decision making, it is critical that the CFPB develops and implements a transparent normalization process to make the presentation of complaint data fairer, less confusing, and more meaningful.
Center for Capital Markets Competitiveness. The CCMC also emphasized the normalization of the data in the bureau's complaint database in a way that makes the database and the reports derived from it less misleading. The bureau should then build from this initial step and finally put its complaints database on a sound footing, said the trade association.
Consumer Relations Consortium. In response to the bureau’s request for feedback, CRC members have expressed their belief that two elements are most important for any attempted normalization: type of accounts worked and size of the organization. However, using just those two elements is insufficient, said the comment letter. At least two additional elements, balance range and age of debt, are best utilized as initial sub-categories. Thereafter there are numerous other types of sub-categories to the sub-categories, recommended CRC.
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