If you were alarmed by the reputational headaches and compliance challenges inherent in the Consumer Financial Protection Bureau’s complaint database, there is now even more to worry about. This week, the CFPB cleared the way for the narratives behind those complaints to be made public.
When consumers submit a complaint to the CFPB, they now have the option to share their account of what happened in the public database. The policy change, first proposed in July 2014, was accompanied by a Request for Information seeking public input on ways to highlight positive consumer experiences, such as by receiving consumer compliments.
The CFPB began accepting complaints in July 2011. It currently accepts complaints on many consumer financial products, including credit cards, mortgages, bank accounts, private student loans, vehicle and other consumer loans, credit reporting, money transfers, debt collection, and payday loans. The database also includes information about the actions taken on a complaint by a company, whether the response was timely, and whether the consumer disputed the company's response. A consumer's identity and other personal information is not included among the data.
Complaints are listed in the database only after the company responds to the complaint or after they have had the complaint for 15 days, whichever comes first. While the allegations in the complaint are not verified, a commercial relationship between the consumer and the company is substantiated before a complaint is added to the database. In March 2013, database data was made public, allowing users to track, sort, search, and download information. To date, the database has amassed more than 550,000 complaints.
There are restrictions the CFPB will place on the public release of narratives. It will not publish a complaint narrative unless the consumer provides informed consent by affirmatively check a consent box. At least initially, only narratives submitted online would be available for the opt-in. Complaints will be scrubbed of information such as names, telephone numbers, account numbers, Social Security numbers, and other direct identifiers. Companies will have the opportunity to post a written response that appears next to the consumer's story. Personal information will also be redacted from the response.
If a consumer decides at any time that he or she would like to withdraw consent to publish their narrative in the database, they will have the ability to do so, and the filing would be removed within three business days.
The National Association of Federal Credit Unions was among those concerned by the initial proposal. “[We have] serious concerns about the potential for undue reputation risks to financial institutions relative to unsubstantiated claims,” NAFCU Director of Regulatory Affairs Mike Coleman said. “At first blush, the risks of unwarranted reputational harm to good actors far outweigh any benefits this proposal would create to assist the CFPB to resolve legitimate complaints.”