UPDATE: The deadline for submitting comments on the proposal has been extended to September 22, 2014, 60 days from the date the proposed policy was published in the Federal Register.
Upon opening its doors three years ago, the Consumer Financial Protection Bureau (CFPB) began accepting complaints from consumers about consumer financial products. Consumers can review those complaints via a public portal available here.
The CFPB is now proposing a new policy related to the disclosure of complaint information, which would permit consumers to opt-in to allowing the Bureau to publish a narrative description of the complaint. This narrative would not contain any personally identifiable information, and companies would have an opportunity to provide a narrative response.
Comments are due 30 days from publication in the Federal Register.
What Information Is Available via the Complaint Database?
At present, the CFPB publishes the following information related to the complaint:
- Complaint ID. The unique identification number for the complaint.
- Product. The type of product the consumer identified in the complaint (i.e., consumer loan, debt collection, mortgage, etc.).
- Sub-Product. The type of sub-product the consumer identified in the complaint (i.e., FHA, vehicle loan, etc.).
- Issue. The issue the consumer identified in the complaint (i.e., continued attempts to collect debt not owed, loan modification, foreclosure, etc.).
- Sub-Issue. The sub-issue the consumer identified in the complaint (i.e., debt is not mine, etc.).
- State. The consumer's reported mailing state for the complaint.
- Zip Code. The consumer's reported zip code for the complaint.
- Method of Transmission. How the consumer transmitted the complaint to the CFPB (i.e., telephone, database, etc.).
- Date Received. The date the CFPB received the complaint.
- Date Sent to Company. The date the CFPB sent the complaint to the company.
- Company Name. The company receiving the complaint.
- Company Response. How the company responded to the complaint. These choices are from a set list: (i) In progress; (ii) Closed; (iii) Closed with explanation; or (iv) Closed with non-monetary relief.
- Timely? Whether the company responded in a timely manner (15 days).
- Consumer Disputed? Whether the consumer disputed the response (yes or no).
Note that the data available at present does not include a full narrative description of the complaint.
What Is the CFPB Proposing?
The CFPB will only disclose narratives: (i) for which informed consumer consent has been obtained; and (ii) that have been scrubbed of personal information. To provide consent, the consumer will check a box to opt-in. The opt-in consent will state that: (i) whether or not consent is given will have no impact on how the CFPB handles the complaint; (ii) if given, the consumer may thereafter inform the CFPB that she withdraws her consent at any time, and the narrative will be removed; and (iii) the CFPB will take reasonable steps to remove personal information from the complaint to minimize the risk of re-identification (putting together separate data sets to identify individuals).
Consumer, civil rights, and open government groups are largely in support of this disclosure, based on the belief that the narratives will provide consumers with more useful information on which to base financial decisions and will allow reviewers to assess the validity of the complaints.
Trade groups and industry, however, almost universally oppose the publication of narrative data.
For those consumers who opt-in to the narrative sharing, the company will have the opportunity to provide a narrative response. Companies will be directed to omit any personally-identifying information, and the CFPB will scrub the response for any information that risks re-identification.
What Is the Risk of Reporting Narratives?
The CFPB identifies two primary risks in reporting the narratives. First, consumers could be identified via re-identification strategies.
Second, and arguably more important, is the risk that the narrative is factually inaccurate. Consumers often misremember or misunderstand the facts of the situation. This kind of misinformation being publicly disseminated via a government agency could result in significant reputation damage to an institution. To mitigate this risk, the CFPB is also proposing to permit companies to provide a response to the narrative. Thus, to the extent there are factual disputes, both sides will be displayed.
Please contact a member of Venable's CFPB Task Force if you would like to respond to this request for comment, or if you would like more information.