The Consumer Financial Protection Bureau, nearly a year old now, has from the start cited transparency as one of its goals for the financial services industry. Tuesday, amid much protest from the finance industry, it launched a tell-all site where consumers can post their complaints.
Credit cards targeted first
At first, the Consumer Complaint Database will only post consumer gripes about credit card companies. The federal watchdog says it will add sections in the future for complaints about student loans and home loans.
CFPB director Richard Cordray told the press Monday:
“By making our data publicly available, initially in the area of credit cards, we hope to improve the transparency and efficiency of this essential consumer market. We believe it’s the first time for the public to see such individual complaint data on consumer credit cards.”
According to the CFPB, it has received more than 16,000 grievances about credit cards, but it will only post those received after June 1, when it finalized its procedure for the new site. Companies targeted in complaints have 15 days to respond and 60 days to address a specific issue.
The bureau also stresses that consumer complaints can be made with complete anonymity, even though it will post how the targeted credit card company responds to the grievance.
Financial industry protests
Finance industry trade groups have been very vocal in protesting the move, saying naming names can only stir the pot and lead to needless lawsuits. A letter, posted on the websites of the American Financial Services Association, the Consumer Mortgage Coalition and the Mortgage Bankers Association, said:
“There is no public policy purpose served by the release of data by issuer. Disclosing the names of individual card issuers serves only as fodder for plaintiff attorneys.”
By posting all grievances, others argue, there is no way to know if the complaint is valid or even accurate. President of the National Association of Federal Credit Unions, Fred R. Becker Jr., said:
“Disclosing every complaint, without any indication of the veracity of the complaint, is inherently misleading.”
Erring on side of the consumer
In order to dissuade outright slander, the CFPB counters that it will not post a complaint until it has verified that the consumer actually has done business with the company he or she has the grievance with. How it intends to protect the consumer’s anonymity during this verification process was not discussed.
Ultimately, the CFPB says it is erring on the side of the consumer, giving them as much information as it can to make informed decisions. Cordray said:
“Anyone with access to the web will be able to review and analyze the information, and draw their own conclusions. … Do your own digging. Find your own information.”
The beta version of the Consumer Complaint Database can be accessed at http://www.consumerfinance.gov/complaintdatabase/.