Compliance Blog

Written by Ricardo Piñeres, Regulatory Compliance Counsel

CFPB Proposes Allowing Public Complaints on Financial Products and Services.  On Wednesday, the CFPB issued a proposed policy statement that, if enacted, would bring substantive changes to the Bureau’s Consumer Complaint Database.  Currently, the Database has anonymous information about the complaint received, including the date of submission, the consumer’s zip code, the relevant company, the product type, the issue the consumer is complaining about, and the company’s response.  Wednesday’s proposal would allow the consumer’s narrative description of what happened to be included in the database, if the consumer chooses.

In a press release announcing the proposal, the CFPB states:

“In many ways, the narratives are the most insightful part of a complaint. They provide a first-hand account of the consumer’s experience and the problem they would like resolved. By giving consumers an option to publicly share their stories, the CFPB would greatly enhance the utility of the database, a platform designed to provide consumers with valuable information needed to make better financial choices for themselves and their families.”

According to the Bureau, adding the narratives to the Database will:

• Provide context to the complaint;
• Spotlight specific trends;
• Help consumers make informed decisions; and
• Spur competition amongst financial institutions based on consumer satisfaction.

The CFPB’s proposal will allow financial institutions to respond to the narrative and have the response published alongside the consumer’s narrative.  The narratives will follow the same publishing procedures that currently in place with the Bureau first confirming the commercial relationship between the consumer and company.  The narrative and the rest of the complaint information would be listed in the database only after the company responds to the complaint or after it has had the complaint for 15 days, whichever comes first.

According to CFPB Director Richard Cordray, “[t]he consumer experience shared in the narrative is the heart and soul of the complaint.  By publicly voicing their complaint, consumers can stand up for themselves and others who have experienced the same problem. There is power in their stories, and that power can be put in service to strengthen the foundation for consumers, responsible providers, and our economy as a whole.”

NAFCU has concerns with this proposal because it exposes financial institutions to undue reputational risks.  In a statement responding to the proposal, NAFCU Director of Regulatory Affairs Mike Coleman stated:

“Credit unions take great care to address their members’ complaints directly and foster ongoing relationships with their members.  NAFCU has serious concerns about the potential for undue reputation risks to financial institutions relative to unsubstantiated claims. NAFCU will closely examine the proposal and its impact on credit unions, however, 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.”

Credit unions interested in submitting comments regarding the proposal may submit their comments at http://www.regulations.gov.  The docket number is CFPB-2014-0016.

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Free Kick.  With an amazing World Cup behind us, it’s now time to turn our focus to the delightful world of club football.  Players are starting to rejoin their clubs after the World Cup and vacation, but as always, this time of the year is dominated by speculation regarding who is changing clubs.  It can be a bit overwhelming to keep track of the rumors that swirl around during the transfer window, so here is a recap of the big moves that have occurred thus far (through Friday night).