The CFPB’s Consumer Complaint Database Is Evolving. Again.
The CFPB has always collected consumer complaints. Initially, the Consumer Complaint Database was a tool for the Bureau to identify trends in consumer-creditor problems, and the Database initially focused on complaints about credit cards. The Database has expanded over the past three years to cover mortgages, bank accounts, private student loans, vehicle loans, credit reporting, money transfers, debt collection and payday loans.
On July 21, 2014, the CFPB announced
it also will be collecting consumer complaints regarding prepaid cards, debt settlement services, credit repair services, and pawn and title loans.
But the bigger news happened a week earlier, when the Bureau announced a major change in the mechanics and, some would say, purpose of the Complaint Database. Initially, the Database was not public at all; it was only used for the Bureau’s purposes to identify trends in consumer complaints. In 2012, the Database became partially public. At that time, a consumer could search the Database for type of product, the consumer’s zip code, the name of the financial institution, and how the institution responded to the complaint.
Now, the CFPB proposes to add another field of publicly-available information: the consumer’s narrative of the complaint. See CFPB’s Proposal
and Director Cordray’s Prepared Remarks Announcing the Proposal.
The narrative is a consumer’s unedited, unverified explanation of the consumer’s experience with a given financial institution.
The proposal immediately conjures threats of harm to a financial institution’s goodwill in an instance where a consumer might misrepresent an experience, or speak in unfairly (or even potentially untrue) derogatory terms about an institution. To mitigate that risk, the CFPB’s proposal would give the financial institution an opportunity to prepare a response to the narrative and would publish the response simultaneously with the complaint. But a reasonable person could wonder whether the public would view the institution’s public response as merely defensive or a continuation of the dispute with the consumer, rather than a good faith answer to the issue raised in the complaint.
The CFPB has invited comments on its proposal. We recommend that financial services institutions give comment to the proposal. We also recommend that institutions begin planning for the likelihood that the proposal will be adopted as written, and begin dedicating the resources necessary to develop an appropriate method of publicly responding to the consumer narratives.
This publication is intended for general information purposes only and does not and is not intended to constitute legal advice. The reader should consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.