Over Banker Objections, CFPB Invites More Detailed Complaints

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WASHINGTON — The Consumer Financial Protection Bureau finalized a contentious policy Thursday allowing customers to describe their banking experiences more fully on the agency's complaint portal.

The industry strongly pushed back on the CFPB's July proposal to expand its online complaint system. Initially, the portal only included the name of an institution and the product targeted in the complaint, but under the new policy customers can choose to publicize the "narrative" of happened.

While banks have argued the expansion will allow unverified details to be posted to the public, the final policy was largely unchanged from the proposal. However, a consumer will have to affirmatively "opt in" to providing a narrative before it is included in the portal, and companies will have time to respond to the complaint before it is published.

The agency says publishing the longer narratives will help provide context around complaints and assist the CFPB in monitoring trends in the financial marketplace.

"Consumer narratives shed light on the full consumer perspective behind a complaint," said CFPB Director Richard Cordray in a press release. "Narratives humanize the problems consumers face in the marketplace. Today's policy will serve to empower consumers by helping them make informed decisions and helping track trends in the consumer financial market."

The CFPB did try to address bankers' uneasiness by seeking public comments on how it could also highlight customers' positive experiences, whether through the complaint portal or a separate system. The agency also said it will not publish any of the narratives for at least 90 days from when the final policy is included in the Federal Register "in order for companies to learn about this new system." Customers could begin opting in to provide narratives as early as Thursday.

Yet those steps are unlikely to satisfy the industry's overarching concerns about the publicized narratives.

"While we support the bureau's collection of complaint data to identify trends and understand consumer concerns, we are disappointed by today's decision," said Richard Hunt, president and chief executive of the Consumer Bankers Association.

He suggested the agency could substantiate complaints before posting them, but is not choosing to do so.

"The CFPB has the ability to demonstrate trends, allow for an appeals process, and normalize data — much like other regulators," he said. "Puzzlingly, they choose not to use any of these illuminating mechanisms. Today's action does not reflect the principles of accountability, transparency, and data-driven decision making which the bureau professes guides its work.  This agency can do better."

The CFPB said as part of the new policy it will not publicize the consumer narrative until companies have had 60 calendar days to offer a complaint response. Also, the consumer complaint narrative must meet certain criteria to be published such as the consumer must have a confirmed relationship with the named company, the complaint is not a duplicate and it must be submitted through the CFPB's website.

The current system follows similar criteria, with companies given 15 days to respond to the brief complaint before it is published in the database online. Consumers can already submit a narrative to the CFPB privately but the main difference in the new policy is that they can now "opt in" to have that narrative publicized. Consumers can also opt out if they want to remove the narrative at any time afterward. And the CFPB emphasized that the policy does not undermine safeguards to protect a consumer's identity, which was another concern raised by the industry.

"The bureau will take reasonable steps to remove personal information from the complaint to minimize the risk of re-identification," the CFPB said in its press release. "This means the CFPB will use a thorough process to ensure complaints are scrubbed of information such as names, telephone numbers, account numbers, Social Security numbers, and other direct identifiers."

The policy also includes a list of formatted public responses that the company can chose from when answering a complaint.

"Companies will be under no obligation to offer a public response, and they have 180 days after the consumer complaint is routed to them to select the optional, public response," the CFPB said. "Companies will have the option to address all consumer complaints submitted after this policy announcement, not just those where a consumer consented to publication."

The CFPB currently accepts complaints about mortgages, credit cards, consumer loans, debt collection, credit reporting and payday loans. The agency has received about 558,800 complaints as of March 1. Mortgages and debt collection are the most common complaints, the agency said. 

As for steps on how to publish positive consumer feedback, the CFPB said it is considering two options: either to provide more information on how companies handled complaints — including when a bank's response was seen as satisfactory — or provide consumer compliments independent of the complaint process.

"Today's RFI [Request for Information] seeks input on these options and welcomes other ideas," the CFPB said.

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