Cordray Says Consumer Complaint Data Can Aid Financial CompaniesCarter Dougherty
Financial services companies should use the Consumer Financial Protection Bureau’s complaint database to head off potential lawsuits instead of objecting to its public release, the director of the agency said today.
“If they want to do so, they can use this information to improve their customer service and their general practices,” Richard Cordray said in a speech in Des Moines, Iowa. “Data can help them detect regulatory risks and address problems before they are faced with potential enforcement action or private litigation.”
The agency is holding a hearing in Des Moines today on its consumer complaint system, which has been criticized by the industry for tarnishing respectable brands by publicizing data on complaints that may not be valid.
The bureau was created by the 2010 Dodd-Frank law to protect consumers from abusive financial practices. It supervises major banks such as JPMorgan Chase & Co. and US Bancorp, and non-bank firms like payday lenders, credit bureaus and debt collectors.
Today, the CFPB expanded the body of published data on consumer complaints from about 19,000 entries to more than 90,000 on mortgages, student loans, checking accounts and other consumer products. It had previously only published data on credit card complaints.
Cordray explicitly rejected the industry’s criticism of the data’s impact on their reputations.
“The database is good for consumers and it is also good for honest businesses,” Cordray said in an e-mailed statement prior to his speech. “We believe the marketplace of ideas can do great things with this data.”
From July 21, 2011 through February 28, 2013, the CFPB received about 131,300 complaints, according to a report published today. Of those, 49 percent concerned mortgages, and 23 percent dealt with credit cards. Another 15 percent were about bank accounts, while 5 percent covered credit reports and 4 percent student loans.
Geographically, a zip code in Broward County, in southern Florida, generated the most complaints, with 545. It was followed by a zip in Oakland County, Michigan, with 286. Third was a zip code in San Bernardino County, in southern California, with 85.