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July 19, 2012 – The Consumer Financial Protection Bureau's latest iteration of plans for its consumer complaint database – expanding it to cover complaints about all types of financial products and services – will only worsen risk to financial institutions' safety and soundness, NAFCU President and CEO Fred Becker said Wednesday.

The bureau last month launched its public consumer complaint database with the release of data from complaints regarding credit cards. The CFPB hasn't given much public emphasis to its stated disclaimer that not all the data released is verified, and the fact the CFPB is now planning to place complaint data regarding all types of financial products on the public database only worsens potential problems.

"Certainly, if the Bureau itself does not include the disclosure in its own release announcing the creation of the database, it cannot reasonably expect news outlets and other sources of information to include the disclaimer," the NAFCU president said.

NAFCU has been urging the CFPB to refrain from disclosing unverified complaint data since it has the potential of harming an institution's reputation and, in turn, its business. Becker added Wednesday that if the CFPB goes even farther, by publishing some of the narrative data in the complaints its receives, financial institutions will face "a significant new burden."

The CFPB says it has received 45,000 complaints since it began operating. "Financial service providers are undoubtedly already paying careful attention to the narrative fields through the complaint process," Becker said. "Nonetheless, the possibility that every single narrative field may be publicly disclosed will require significantly heightened controls."

Regardless of the legitimacy of the complaints lodged, their public disclosure "creates safety and soundness concerns and will unduly place a financial institution's reputation at risk," Becker wrote. These concerns are compounded if the disclosure is expanded to include all complaints regarding all financial products and services, and they are made worse by the disclosure of narrative fields.

"The CFPB's disclaimer regarding the veracity of the complaints is simply inadequate and does nothing to address these concerns," he said.