Compliance Blog

Written by Michael Coleman, Regulatory Compliance Counsel

We have blogged several times on the CFPB's Consumer Complaint Database (and we even created a member complaints category for the blog) and its implications for credit unions, most recently, here. Initially, it is important to keep in mind that credit unions under $10 billion are not included in the Consumer Complaint Database.  The CFPB will forward any complaints from these credit unions to NCUA, and credit unions will need to follow NCUA's procedures for responding to member complaints, which we've outlined a couple of times on the blog.  Most recently here and here.

Well, the CFPB is at it again. On March 28^th, 2013 the CFPB announced in a press release and on its blog that they have expanded the consumer complaint database. The database now includes more than 90,000 complaints on mortgages, student loans, bank accounts and services, other consumer loans, and credit cards.

We have expressed our concern numerous times over the fact that the consumer complaint database contains unverified complaint information, and the danger that this poses to a credit union's reputation risk in this age of viral media. Once that information is out there, you can't un-ring that bell.

The CFPB acknowledges the fact that this data is unverified in a disclosure on the compliant database, but it doesn't really jump off the page. Nor does their rationale for listing unverified data in their policy statement really resonate (see page 9), or the "significant controls" for verification in this policy statement on the release of credit card compliant data.  

Instead of beating that drum again, I'd like to focus on what I considered a particularly troubling excerpt from the CFPB announcement:

Call to Action

The CFPB is encouraging the public, including consumers, analysts, developers, data scientists, civic hackers, and companies that serve consumers, to analyze, augment, and build on the public database to develop ways for consumers to access the complaint data or mash it up with other public data sets.

The CFPB would like the public to highlight innovative uses of the data, from visualizations to new tools, by tweeting @CFPB using the hashtag #CFPBdata.

Admittedly, I am what you might call technologically challenged (just ask any of my colleagues, if the printer is broken, its most likely my fault), and I have no idea how Twitter actually works. Still, I don't know about you, but this makes my eyes start twitching and I want to employ Steve's stress reduction kit. There is a great recap of "the new cycle" of regulation in this blog post, highlighting the fact that the solicitation of complaints can ultimately result in the passage of laws or the issuance of regulations that will apply to all credit unions, not just those over $10 billion in assets.

But the CFPB has taken it a step further. They are now asking the public, including "civic hackers," to analyze and augment the data, or to "mash it up" with other public data sets. And then tweet it at "#CFPBdata" To me, this just exacerbates the reputation risk issues associated with the consumer complaint database.

But wait, there's more. On Thursday April 4^th, the CFPB announced in a blog post that they are now accepting complaints regarding remittance transfers:  

Every complaint we receive helps us understand the challenges facing consumers, and they inform and shape our priorities.

Reading your complaints about money transfers will complement work we have already started in this area, including issuing a rule on international money transfers, which will include a new set of protections for consumers who send money internationally.

As if the rulemaking process for the final rule on remittance transfers hasn't been difficult enough already, the CFPB is now soliciting complaint data on remittances, and who knows where that will lead. To me, this feels like throwing gasoline on a wild fire. But I digress.

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Iceland Photos, Part 2. On a more cheerful (less rant-filled) note, I thought I'd share a couple more photos from my trip to Iceland. Have a great weekend!

My brother and I at Gullfoss.

Skógafoss!