On June 28, 2016, the CFPB released its monthly consumer complaints snapshot, which focused on consumer loans and complaints coming out of Arkansas. Each month the CFPB releases a report focused on particular products and geographic areas to direct the public's attention to different segments of the industries the CFPB oversees and to note how these industries affect different parts of the country.
In June the snapshot turned its attention to consumer loans, which include vehicle loans and leases, installment loans, title loans, and pawn loans. Over half of all complaints about consumer loans relate to vehicle loans. The second most commonly complained-about product was installment loans, at 31% of complaints. Furthermore, just under half of all complaints involved a consumer's difficulty managing her loan, lease, or line of credit.
The key complaints included:
- Consumer complaints about trouble managing their loans: The Bureau reports that consumers often complained about managing their loans, leases, or lines of credit. Payment processing issues often led to consumers not having payments applied to their accounts in a timely manner.
- Unclear loan disclosures to consumers: The Bureau reports that consumers complained of unclear explanations of fees and interest rates, so that consumers did not understand the cause of their account balances.
- Payment problems leading to repossessed vehicles: The Bureau reports that consumers complained about vehicle repossession with no notification. In some cases consumers stated that the repossession occurred while the consumer believed a resolution agreement was in place.
National Complaint Overview
The CFPB also provided a breakdown of complaints nationwide. The top complained-about products remain unchanged from prior months, with debt collection, credit reporting, and mortgages topping the list. In a year-to-year comparison, student loan complaints increased a whopping 61%. Certain states also experienced large increases in complaints, with New Mexico up 38%, Iowa up 33%, and Minnesota up 27%.
The June focus on Arkansas did not lead to any particularly noteworthy information related to complaints. As in the rest of the country, debt collection topped the list for complaint volume. Mortgage complaints were lower than those in the rest of the country, but the CFPB's analysis does not provide specific insight into the reason.
Consumer complaints help direct the Bureau's attention and can result in inquiries, investigations, and, potentially, enforcement actions. Industry participants are advised to monitor trends in complaints, to be able to anticipate and respond to key areas of the Bureau's focus.