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Consumer complaint database could soon go


Public access to a controversial complaint database run by the Consumer Financial Protection Bureau (CFPB) could be next on the Trump Administration’s chopping block.

The CFPB, under the guidance of President Donald Trump’s budget director, Mick Mulvaney, is investigating how it handles consumer complaints against financial-services companies. Last week, the CFPB announced a 90-day comment period seeking input on how it collects and resolves complaints across all its platforms. In March, the CFPB called for comments on the effectiveness of the complaint database specifically. 

consumerbureau(1)The CFPB’s handling of consumer complaints under former Director Richard Cordray raised the ire of the industry.

In 2011, the CFPB started taking complaints from consumers. Initially, however, only basic information was made available to the public. In 2015, the CFPB rolled out an update that allowed consumers to include a narrative description of the events surrounding a complaint. The database is available to the public on the CFPB’s website.

 The CFPB says each complaint provides insight into a consumer’s problems, and helps the bureau and individual companies stamp out bad practices. The mortgage industry, however, strongly opposed publishing detailed information about complaints when the 2015 update was released, arguing that the CFPB was publishing mere allegations on an official website.

“Congress never intended for the Bureau to publish complaint information, and public disclosure of unverified consumer complaints does nothing to help people make informed and responsible financial decisions," said Virginia O’Neill, senior vice president of American Bankers Association Center for Regulatory Compliance. 

"There have historically been significant problems in the accuracy, integrity and usefulness of the information reported in the Bureau’s public database,” O'Neill added. 

 The Independent Community Bankers of America (ICBA) and the Community Home Lenders Association, a nonbank trade group, also indicated Monday that they plan to comment. The Mortgage Bankers Association is also expected to weigh in soon.

 “ICBA and its member community banks take consumer complaints very seriously; however, many consumer complaints in the database are not fully verified and could misrepresent companies and the products and services they offer,” said Michael Emancipator, ICBA’s assistant vice president and regulatory counsel.

Emancipator said publishing narratives also potentially reveals private information about consumers. The consumer’s name and other personal information is scrubbed prior to the complaint’s publication, but the narratives often contain highly specific information about an individual’s problems.

“ICBA has advocated that only objective and quantitative information be disclosed to the public to prevent abuse of the system,” he said.

As of Monday, 43,264 published complaints with narratives were posted against mortgage companies. In total, more than 1 million complaints against a variety of financial-services companies are available for viewing.

During testimony last week before the Senate Banking Committee, Mulvaney said that it was within his authority to make the consumer database entirely private, should he deem it appropriate.

This story was updated from the original version. 


 

Questions? Contact at (425) 984-6017 or victorw@scotsmanguide.com.

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