March 19, 2015

CFPB will allow narratives in consumer complaint database

CFPB on Thursday announced consumers can now publicly voice their complaints about financial companies and their services – a move NAFCU believes has the potential to increase reputational risk to credit unions.

CFPB said Thursday that it will not publish any "consented-to narratives" for at least 90 days after this new policy is published in the Federal Register so financial companies have time to learn about the new system.

When this proposal was announced last year, NAFCU expressed concerns about the harm it could cause credit unions. "Credit unions already take great care in resolving their members' complaints directly," said NAFCU Director of Regulatory Affairs Alicia Nealon. "NAFCU believes this new policy will not only present system-wide reputational risks to credit unions, but will also provide an incomplete picture of the actual circumstances of the complaint. NAFCU is concerned these effects will make the complaint process more complicated and confusing for consumers and institutions."

When consumers file a complaint via the CFPB database, they enter information such as who they are, who the complaint is against and when it occurred. They can also describe the complaint in more detail if they choose. The bureau then forwards this information to the company for a response and keeps the consumer updated.

As of yesterday, consumers who submit a complaint can now opt in to share their narratives. CFPB has put in place certain safeguards for both financial companies and consumers regarding this new system, including:

  • consumers must opt in to share their stories;
  • consumers' personal information will be removed from narratives;
  • companies receiving complaints can choose from a list of responses to publish and have 180 days to do so;
  • consumers can opt out anytime; and
  • complaints must follow certain criteria to qualify for publication, including a confirmed relationship between the consumer and financial company.

The bureau is also seeking input from the public on how it can collect and share consumers' positive interactions with financial companies.