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Trade group urges CFPB to change consumer complaint database

Mortgage and banking industry groups have renewed calls on a federal regulator to make substantial changes to a consumer database that publishes unverified narrative complaints against mortgage companies and servicers.

In a letter to the Consumer Financial Protection Bureau (CFPB) this week, the Mortgage Bankers Association said it strongly objects to the federal government publishing “unsubstantiated” narratives and called on the Bureau to revamp the database with industry input. Among several recommendations, the trade group urged the Bureau to take down complaints that do not require action from the companies.

In June, the Bureau began publishing narrative comments over the objections of MBA and other trade groups. Initially, it published nearly 8,000 comments.

MBA's letter was prompted by a request from the Bureau for input on its goal of "normalizing" the raw data so that the database will be easier to use for consumers. Other industry groups have also expressed concern about its value. 

In late August, the National Association of Federal Credit Unions (NAFCU) expressed "serious concerns" about privacy. It said it discovered several narratives that hadn't been properly scrubbed of personal information prior to be published online. These were later corrected by the Bureau.  

"NAFCU remains skeptical that any potential benefits of the Database justify the reputational and privacy risks," NAFCU said. 

The Consumer Bankers Association also said that it opposed moves to normalize the data until the Bureau takes steps to verify the accuracy of the complaints. That organization wants the Bureau to establish a way for companies to flag and remove misleading comments. 

"Publishing out of context, unverified data will only mislead consumers," said CBA President Richard Hunt in a news release. "They must verify the data before they work to normalize it because only then will consumers truly benefit from the ‘complaints.’ ”

MBA noted that several private web sites, such as Google and Yelp, provide a platform where consumers can share their experiences.

"Many of these sites invite consumers' to rank their experiences in a nonbiased manner, rather than in the context of a 'Consumer Complaint Database,'" the letter said. "As such, their rankings are likely to be more valuable as a consumer decision tool than rankings based almost exclusively on complaints. Considering the reach of these sites, it is unnecessary as well as unwise to also employ the imprimatur of the United States government in this work."  


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