14 AGs push back to keep CFPB complaint database publicly available


As the Consumer Financial Protection Bureau continues to modify how it operates, more than a dozen state attorneys general are pushing the CFPB not to change its practices regarding consumer complaints.

New York attorney general Barbara Underwood recently led a coalition of 14 attorneys general in urging the CFPB to retain its public database of consumer complaints. Underwood explained the joint letter emphasizes the numerous benefits of a public database to state law enforcement, honest businesses and the public at large. 

Underwood noted the letter was in response to a March 1 request for information (RFI) issued by the CFPB, seeking comments from the public “to assist the bureau in assessing potential changes that can be implemented to the Bureau’s public reporting practices of consumer complaint information.” 

Underwood said, “The CFPB public database represents an admirable commitment to transparency.  By moving to eliminate public access to the database, the Trump administration is yet again putting corporate interests over those of consumers, shielding corporate wrongdoing from public view.”

The letter was led by Underwood and also signed by the attorneys general of:

— California
— Delaware
— Hawaii
— Illinois
— Iowa
— Maryland
— Massachusetts
— Minnesota
— North Carolina
— Oregon
— Pennsylvania
— Vermont
— Washington

The letter also was signed by the Hawaii Office of Consumer Protection.

The attorney general actions arrived on the heels of the CFPB disbanding its Consumer Advisory Board; a move that members called a “firing.”

Along with the RFI Underwood referenced, the bureau also issued another Request for Information on its handling of consumer complaints and inquiries in April. The bureau is seeking comments and information from interested parties to assist the CFPB in assessing its handling of consumer complaints and consumer inquiries and, consistent with law, considering whether changes to its processes would be appropriate.

As of April, the bureau said it has received 1.5 million consumer complaints.

“Though the bureau is required to establish reasonable procedures to provide timely responses to consumer complaints and consumer inquiries, certain aspects of the complaint and inquiry handling processes were developed in furtherance of those statutory requirements but are not directly mandated by statute,” officials said in the April RFI.

“Mindful of the bureau’s statutory objective to provide consumers with timely and understandable information about consumer financial products and services so they can make responsible decisions, as well as its statutory obligations to establish reasonable procedures to provide consumers with timely responses and centralize the collection of consumer complaints about consumer financial products or services, the bureau has used back from a variety of stakeholders to establish and refine its processes over time to improve stakeholders’ experience, handle large volumes of complaints and inquiries and increase overall efficiency,” officials went on to say.

Since the complaint database went live on June 19, 2012, Underwood’s office reiterated that more than a million consumers have filed complaints, and 97 percent of these consumers received a response from the company that was the subject of their complaint. 

In the joint letter, the attorneys general underscore that:

• The large number of complaints and functionality of the database — which can allow users to narrow searches by company, state, product, etc. — have enabled their offices to identify patterns of widespread misconduct that have led to investigations into debt collection companies, student loan servicers, for-profit universities, and other companies whose misconduct was initially brought to our attention through a critical mass of complaints filed with the CFPB. 

• The database arms consumers with information so they can make informed decisions and avoid bad actors in the marketplace. 

• The database benefits responsible companies because it allows them to better understand their customers, and provides them the opportunity to identify problems and take corrective action. 

While auto financing wasn’t specifically mentioned, the bureau is still sharing some details about the complaints it’s receiving. The latest complaint snapshot offered by the CFPB just after Memorial Day focused primarily on debt collection.

Since July 2011, the bureau said it has received approximately 400,500 debt collection complaints, which is 27 percent of the total complaints the agency has received.

“Some common themes emerged in our analysis of these complaints,” the CFPB said. “For example, some people reported that there were debts on their consumer credit reports, but that they did not have prior written notice of the existence of the debt.

“Some people stated in their complaints that they felt uncomfortable disclosing personal information to people who called asking for it because they were not sure whether the person calling was a legitimate debt collector,” the bureau continued. “People also complained about the communication tactics companies used when attempting to collect a debt.”

The CFPB added that credit or consumer reporting was the most-complained-about financial product or service category in March as 37 percent of the approximately 30,300 complaints received during that month revolved around credit or consumer reporting.

Debt collection was the second most-complained-about consumer product, accounting for 27 percent of the monthly total.

The third most-complained-about financial product or service was mortgages, representing about 10 percent of complaints.

The CFPB’s public complaint database was created as part of a lengthy, thorough, and thoughtful process in which the CFPB solicited and considered the views of all stakeholders, including industry groups.  Moreover, as set forth in the letter, a public database of consumer complaints is consistent with the CFPB’s statutory mandate contained in the Dodd-Frank Wall Street Reform and Consumer Protection Act, which charged the CFPB with, among other things, collecting consumer complaints, publishing information relevant to consumer financial products and services, providing consumers with information needed to make informed financial decisions, and ensuring transparency in the consumer financial products and services market. 

Getting back to the action led by Underwood, her office pointed out that the 14 attorneys general who submitted the letter collectively represent more than 131 million Americans, or 40 percent of the U.S. population. 

According to a news release distributed by Underwood’s office, “The attorneys general expressed concern that the CFPB carefully consider facts and arguments in favor of continuing the public database, particularly in light of press reports indicating that acting director (Mick) Mulvaney may have already made up his mind to eliminate the database. In a recent speech to the American Bankers Association, acting director Mulvaney suggested that the decision to shut down the database was a foregone conclusion.”