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Consumers interested in voicing their opinions about the CFPB complaint process have a June 4 deadline. In an effort to assist the Consumer Financial Protection Bureau (CFPB), the agency is asking for comments and information from “interested parties” to help them assess possible changes to its public reporting practices of consumer complaints, according to the Federal Register.
This development comes after the month of April saw comments by the CFPB’s acting director, Mick Mulvaney, on shuttering public access to the agency’s popular online Consumer Complaint Database – a platform for consumers to submit and review complaints about various financial companies (including banks, check out our bank complaint study to see some of those).
Despite its popularity, having access to this wealth of information might be ending soon. It’s another potential move that has consumer advocates even more worried than before. Earlier this month, the bureau announced it would scale down its Office of Students and Younger Consumers division, which provided oversight of the student loan industry.
Concerns from Both Sides
The news of the database’s potential public-facing demise has its supporters and opponents, naturally. The financial industry has long criticized the database for not screening complaints well enough and the potential for consumers to post untrue or inaccurate complaints, resulting in “unreliable and misleading information into the market,” noted the American Bankers Association (ABA).
Meanwhile, some consumer groups are concerned the agency will assist the companies that it’s meant to police and might feel less obliged to respond to complaints.
After sharing his desire to hide the database’s complaints from public view, Mulvaney said via NPR, “I don’t see anything [that says] I have to run a Yelp for financial services sponsored by the federal government. I am thinking I could make the case that having a database that is publicly facing, but is not completely vetted, is probably not consistent with our overall mission.”
Since the database’s 2011 launch, it has captured more than one million complaints. And 97 percent of complaints sent to companies get “timely responses” to the cited issues, reported FCW.com, since the agency asks companies for a 15-day turnaround.
Professional Regulators Could Miss Out
The database has been used by regulators to determine if a financial firm needs further investigation after viewing bad behavior patterns. It is also accessed by journalists, researchers, and interested parties who might either spot trends or new and possibly suspicious products negatively affecting the market, subsequently enabling them to respond.
“Daylight is a great disinfectant, and the American people have a right to know when tens of thousands of their fellow citizens are complaining about a financial institution,” says Karl Frisch, the executive director of the consumer advocacy group Allied Progress, said via NPR. “The CFPB received tens of thousands of complaints about Wells Fargo and that issue is now being resolved.”
With the deadline looming for comments, the CFPB by law has to keep the database. However, it is not legally required to provide it online publicly, experts say.
Author: Mike Brown
In his role at LendEDU, Mike uses data, usually from surveys and publicly-available resources, to identify emerging personal finance trends and tell unique stories. Mike’s work, featured in major outlets like The Wall Street Journal and The Washington Post, provides consumers with a personal finance measuring stick and can help them make informed finance decisions.