September 22, 2014
The Honorable Richard Cordray
Director, Consumer Financial Protection Bureau
1700 G Street N.W.
Washington, DC 20552
Re: CFPB Complaint Narrative Comments, Docket Number: CFPB-2014-0016
Dear Director Cordray,
The California Reinvestment Coalition represents about 300 community based non-profit and social service agencies across California that serve low and moderate income communities, including communities of color, immigrants, women, and rural communities. While our members work directly with households and small businesses to protect against financial losses such as foreclosure and to build financial capabilities and assets, CRC advocates for reforms among financial services providers and their regulators that will lead to better access to affordable, high quality financial products and practices.
We write today in strong support of the bureau’s proposal in this docket to expand the highly successful Public Consumer Complaint Database to include narrative fields.
Currently, consumers that submit complaints know only that their complaint will be seen by the company about which they are complaining. There is no assurance that anyone at the CFPB will read it, follow up to ensure a meaningful response, or use the consumer’s experience to pursue a regulatory of enforcement action. As a result, companies can freely provide pro forma responses that do not actually address the consumer’s concerns. After all, no one but the complainant is likely to see or respond to the company’s action. An inadequate response to a complaint can leave a consumer completely out to dry, left to pursue the issue outside of the CFPB or any regulatory arena, in favor of other forums where the court of public opinion reigns such as Facebook or Twitter, or, if they have the resources to do so, pursuing private legal action. While that consumer may achieve her goals, all information about that interaction is lost to other consumers and regulators.
We encourage the CFPB to add more detailed information to the database, including complaint narratives, detailed complaint categories and subcategories, complaint resolution details, consumer dispute details, and data regarding membership in classes protected from discrimination by law. We support using technology to both give consumers the right not to provide details, using technology to scrub identifying information, and taking steps to prevent the release of personally-identifiable information or the re-identification of consumers. It is critical that the bureau achieve the disclosure of more individual complaint details while simultaneously making every reasonable effort to protect personal data. Finally, we also support allowing financial institutions to provide a reply narrative and making this available to consumers, researchers and other firms.
By allowing consumers to publish the content of their complaints, and institutions to publish response narratives, the CFPB will dramatically help level the playing field on which consumers engage with financial institutions in several ways:
- With access to greater detail about others’ experiences with a financial service provider, consumers can make more informed decisions about which companies to work with.
- Consumers that submit complaints will know that they are helping others by publishing their experience, not merely submitting a complaint in hopes of solitary relief or potential enforcement or regulatory action by the CFPB that they may never know about.
- The CFPB, consumers, researchers and financial institutions alike will be able to better identify bad practices in need of reform as well as effective responses to complaints and other good practices.
- Researchers and regulators will be able to more quickly and accurately identify practices that can lead to system wide crises.
- Knowing that complaint information and resolution can be made public, providers are more inclined to provide better responses to complaints submitted rather than pro forma responses that may never be seen by anyone other than the complainant.
- More consumers will use the database before, during and after their engagement with a services provider, yielding more data that can help the industry improve products and services.
We also urge the CFPB to expand their proposal to allow consumers to update their complaint narratives. This will ensure that important information is not lost, such as whether the complaint was adequately addressed or if new related issues have come up. Such new information can be identified as dated “updates” to the original complaint.
Andrea Luquetta, Policy Advocate