Would Trump’s CFPB pick silence consumers?
Many Americans have felt the frustration of getting the runaround from a customer service agent or finding an unhelpful recording at the end of a financial company’s complaint line.
When someone has been cheated out of money and their family’s well-being is at stake, this experience is more than an annoyance — it’s an injustice that for too long left people with little recourse. That is, until 2011 when the Consumer Financial Protection Bureau launched the consumer complaint database, which documents and helps people resolve disputes with financial companies.
However, the temporary head of the CFPB, Mick Mulvaney, has threatened to shut off public access to the database. If he or Kathy Kraninger, President Trump’s pick for permanent CFPB director, carries out this threat, they would be taking away one of the most effective weapons Americans have to prevent businesses from fleecing them: transparency.
To see the database in action, look at the case of David Perry. After a thief opened fraudulent credit card accounts in David and his wife’s names and went on a spending spree at Best Buy, their credit scores were ruined. They couldn’t get a mortgage to buy a house. A debt collection firm told David to pay thousands of dollars for the fraudulent charges to resolve the matter. Then, David filed a complaint with the CFPB. Within two weeks, the firm stopped collections, apologized and got the credit bureaus to remove the hit to his credit score. David and his wife could then buy a house.
Their complaint is one of more than 1.5 million lodged with the CFPB. After the CFPB verifies the customer-business relationship and gives the company an opportunity to respond, the complaint narrative and relevant data are published online with personal information removed. Ninety-seven percent of consumers get a timely reply when the CFPB sends their complaints to companies. Many receive compensation.
The searchable and public nature of the database encourages accountability and responsiveness from powerful financial institutions. It’s worth noting that the Consumer Product Safety Commission, the Department of Transportation and the National Highway Safety Administration also have searchable public complaint databases.
The CFPB database is heavily used by service members and their families who are targeted by debt collectors with illegal threats to contact commanding officers, seniors who are the victims of scams and students who tell of loan servicers not providing legally required information on repayment options.
Journalists, academics, consumer watchdogs and federal regulators use the database to uncover patterns of consumer abuse. The surge of complaints against Wells Fargo for opening unauthorized accounts contributed to the decision, by the previous head of the CFPB, to investigate and take action. The public nature of the complaints also quietly nudges regulators to address emerging problems.
Some financial players have deployed their lobbyists to attack the database. Even more concerning is that Mulvaney is repeating their talking points. Speaking before the American Bankers Association, he threatened to shield the database from public view and unabashedly stated that lobbyists could buy access to him when he was a member of Congress. Turns out that eight of the ten most complained about financial institutions, including Wells Fargo and Equifax, contributed to Mulvaney’s congressional campaigns.
As a congressman, Mulvaney supported legislation to completely abolish the agency he now leads. Since his takeover, the CFPB has dropped cases against predatory lenders and is undermining its own rule to stop payday loan debt traps.
These actions are part of an anti-consumer crusade by President Trump that flies in the face of his campaign promises to protect the little guy from Wall Street abuses. His administration has weakened access to the courts, protections for student borrowers and enforcement of fair lending laws.
At her confirmation hearing Thursday, Ms. Kraninger dodged simple questions and delivered vague statements that provided little to no insight into how she might run our nation’s top consumer watchdog.
I hope she will see that the complaint database — and the CFPB itself — exist to give Americans a voice when financial companies take advantage of them. They should not be silenced.