Despite strong objections from leaders in the mortgage and other banking industries, the Consumer Financial Protection Bureau is moving forward with a policy that allows consumers to publicly voice their complaints about consumer financial products and services — including real estate financial services.
The bureau announced March 19 that it is finalizing a policy proposed in July 2014 that gives consumers the option to share accounts of their complaints in the CFPB’s public-facing Consumer Complaint Database. Currently, consumers may only opt in to publish narratives submitted online. When consumers submit a complaint, they fill in their identification information and describe who their complaint is against and why. The CFPB then forwards it on to the company for a response, gives the consumer a tracking number and keeps the consumer updated on the complaint’s status.
Under the new policy, consumers must check a box to opt in and give the CFPB permission to publish their narrative. Personal information will be redacted. Although companies are not obligated to offer a public response, they may choose to do so. Complaints will be listed in the database only after the company responds or after it has had the complaint for 15 days, whichever comes first. The CFPB will disclose the consumer narrative when the company provides its public-facing response, or after the company has had the complaint for 60 calendar days, whichever comes first.
The CFPB said it will not publish any narratives for at least 90 days after the policy’s publication in the Federal Register, to give companies time to learn about the new system. But many of the companies that will be affected by the change already raised strong objections to the policy last year during the initial comment period.
The Mortgage Bankers Association, speaking on behalf of nearly all 300,000 members who work in the real estate financial services industry, asked the CFPB to reconsider the policy because the bureau’s own data “and industry data show that very few consumer complaints warrant any action beyond an explanation. Consequently, the MBA believes the CFPB’s posting unsubstantiated and frequently emotional narratives with accompanying complaints could mislead consumers and undermine the stated goal of improving consumer decision-making.”
CFPB Director Richard Cordray has countered that “consumer narratives shed light on the full consumer perspective behind a complaint.”
“Narratives humanize the problems consumers face in the marketplace,” Cordray said, adding that the policy “will serve to empower consumers by helping them make informed decisions and helping track trends in the consumer financial market.”
According to the CFPB, as of March 1, it has handled 558,000 complaints since it opened its doors in 2011, with mortgages being one of the most frequent topics. The bureau handles consumer complaints on a range of financial topics, including credit cards, bank accounts, private student loans, car loans, credit reporting, money transfers, debt collection and payday loans.