On December 31, the CFPB issued a report to the Senate and House Committees on Appropriations to fulfill its statutory responsibility under Section 1017(e)(4) of the Dodd-Frank Act. The report covers the CFPB’s 2015 fiscal year (FY), spanning from October 1, 2014 through September 30, 2015, and provides an overview of the Bureau’s operations and finances. In its report, the Bureau highlights that, during FY 2015, among other things, the CFPB (i) began to publish consumer complaint narratives in the Consumer Complaint Database and launched monthly reports to highlight trends in the complaints submitted to the Bureau; (ii) brought supervisory actions and announced orders through enforcement efforts for $209 million and $5.819 billion in consumer redress, respectively; (iii) released three editions of Supervisory Highlights Report; (iv) published new examination procedures, supervisory guidance documents and studies; and (v) published several proposed rules, final rules, and requests for information, as well as plain-language compliance guides and video presentations summarizing certain Bureau rules. During FY 2015, the Bureau collected more than $183 million in civil money penalties, and more than $108 million in Bureau Administered Redress funds. Looking ahead, the report identifies potential rulemaking initiatives, as reflected in its Fall 2014 and Spring 2015 regulatory agendas.
On January 28, the CFPB released its monthly complaint report focusing on a number of financial services markets, including debt settlement, check cashing, tax refund anticipation checks, money order providers, and credit repair. The report states that, since July 19, 2014, the CFPB has handled approximately 2,700 complaints relating to these other types of financial services. According to the report, debt settlement and credit repair complaints are among the more common complaints, and over a quarter of these complaints mention student loans, with borrowers selecting fraud or scam as their primary issue. Additional findings highlighted in the snapshot include: (i) consumers being charged excessive fees, including upfront fees that are generally prohibited by law, for debt settlement and credit repair services; (ii) consumers encountering problems redeeming money orders, taking issue with the amount of time it took to resolve errors with customer service representatives; and (iii) consumers complaining they were victims of fraud when using money orders and travelers checks. The CFPB identified New York State and the New York metro area as its geographic spotlight in this issue, noting that, as of January 1, 2016, the CFPB has received 50,400 complaints from New York State consumers alone. Similar to past reports, mortgages remain the most complained-about product.
On December 22, the CFPB released its monthly complaint report, which focuses on money transfer complaints. According to the report, as of December 1, the CFPB has handled approximately 5,100 money transfer complaints, domestically and internationally. The most complained-about issues include difficulties with the safe and efficient transfer of money, as well as fraud allegations. Additional complaints include inadequate customer service and issues resolving refund errors. Similar to previous complaint snapshots, the report identifies the most-complained-about companies. The CFPB identified the District of Columbia and Delaware as having the highest complaint volume per capita in the country, and placed Georgia as its geographic spotlight, noting that as of December 1, consumers submitted more than 31,000 complaints, with mortgage-related complaints taking the lead.
On November 24, the CFPB released its monthly complaint report, which focuses on bank account and service complaints. According to the report, the most commonly reported bank account or service complaints include (i) problems opening and managing an account; (ii) difficulties disputing transactions; and (iii) issues with depositing and withdrawing funds. Nationwide, the CFPB identified debt collection as the most-complained-about financial product or service, representing about 28% of complaints submitted. According to the report, complaints about prepaid products rose 193%, while payday loan complaints showed the greatest decrease. The report also identifies the most-complained-about companies. The CFPB acknowledged that Idaho showed the greatest increase in complaint volume and placed Connecticut in its geographic spotlight, noting that as of November 1, 2015, Connecticut consumers submitted more than 8,000 complaints, with mortgage-related complaints taking the lead.
On October 27, the CFPB released its Monthly Complaint Report focusing on credit card complaints. The CFPB has received over 79,000 credit card-related complaints since it began receiving those complaints in July 2011. According to the report, consumer complaint issues specific to credit cards include: (i) confusion over how late fees are assessed; (ii) confusion about how to dispute inaccuracies in billing statements; (iii) accounts being closed without consent; and (iv) inability to allocate payments as consumers desire. The report also notes that, as of October 1, the CFPB has handled about 726,000 complaints across all product lines since it started receiving complaints.
On October 13, the FTC, as part of the International Consumer Protection and Enforcement Network (ICPEN), announced an updated version of ICPEN’s econsumer.gov, a website containing cross border consumer complaints and designed to assist law enforcement authorities investigate and take action against international scams. Originally launched in 2001, the website’s update includes (i) additional language availability; (ii) an improved complaint form, providing consumers with complaint trend data and guidance on how to resolve complaints; and (iii) an interface that is reader-friendly on tablets and smart phones. The FTC enters complaints received via the website into its complaint database, Consumer Sentinel, which is available to enforcers and regulators participating in ICPEN.
BuckleySandler Webinar Recap: Strategies for Meeting the CFPB’s Expectations for Consumer Complaint Management
On September 29, BuckleySandler hosted a webinar, “Meeting the CFPB’s Expectations for Consumer Complaint Management,” presented by partner Jonice Gray Tucker, counsel Lori Sommerfield, and counsel Kari Hall. This recap covers highlights from their discussion, which included a discussion of the CFPB’s expectations and practical advice for managing consumer complaints in the evolving regulatory environment.
The webinar began with a brief background on the CFPB’s approach to consumer complaints. In particular, the presenters touched upon how the CFPB has used complaints as a driving force in determining priorities in guiding supervisory work, identifying leads for enforcement, and in informing rulemaking efforts. The presenters also discussed how the Bureau may deal with deficiencies in consumer complaint management in examinations and ways in which the outgrowth of such deficiencies may lead to enforcement actions. In addition, the presenters highlighted key elements of effective complaint management programs. Read more…
On September 22, the CFPB published the third volume of its monthly consumer complaints report, examining mortgage complaints received through its complaint database. In its latest snapshot report, the CFPB revealed that it has received more than 190,000 mortgage complaints as of September 1, 2015, making mortgage the most-complained-about financial product. Specifically, the report finds that ongoing questions persist with respect to (i) how consumers can prevent foreclosure; (ii) how and when to make payments when mortgage loans are transferred to a different servicer; and (iii) how to ensure accurate payment on mortgage loans. According to the CFPB, as of September 1, 2015, over 700,000 complaints have been handled since the consumer complaint database’s inception.
On August 25, the CFPB released the second of its monthly complaint reports, highlighting complaints received from consumers regarding the credit reporting industry. In its latest snapshot report, the CFPB revealed a 56 percent increase in the number of credit reporting complaints submitted by consumers between June 2015 and July 2015, and a 45 percent increase in credit reporting complaints from last year. The report also stated that 77 percent of credit reporting complaints involved inaccurate information on consumers’ credit reports. Despite the large volume of data used to prepare the report, the Bureau cautioned that the data is not normalized and that company-specific information should be considered in context of a company’s size.
On July 16, 2015, the Consumer Financial Protection Bureau (“CFPB” or “Bureau”) launched the first in a new series of monthly complaint reports highlighting key trends from consumer complaints submitted to the CFPB. Importantly, its monthly report provides significant detail on the complaints the CFPB has received, including the names of the companies that received the largest number of complaints.
Currently, the most-complained-about companies are also the largest bank and nonbank financial institutions in the country. Since these institutions have the highest numbers of customers, it is only natural that they have received the highest number of complaints. On the same day as the monthly report’s release, CFPB Director Richard Cordray provided remarks at an Americans for Financial Reform event in Washington, D.C. Director Cordray noted that in future monthly reports, the CFPB hopes to “normalize” its consumer complaint data by accounting for financial institutions’ respective size and volume. To that end, the CFPB issued a Request for Information seeking input on ways to enable the public to more easily understand company-level complaint information and make comparisons. The comment period closes August 31, 2015. Read more…
Today, the CFPB expanded its consumer complaint database, publishing for the first time over 7,700 consumer narratives which provide descriptive details of issues consumers face with respect to mortgages, bank accounts, credit cards, and debt collection, among other topics. As previously covered in InfoBytes, the Bureau finalized its Policy earlier this year requiring consumers who file complaints to “opt-in” to have the actual narrative of the complaint disclosed in the CFPB consumer complaint database. In addition, the Bureau issued a Request For Information seeking feedback on how complaint information contained within the database can be more easily identified and “normalized.” The Bureau also announced that it had received more than 627,000 complaints as of June 1, with mortgages and debt collection among the most frequent sources of complaints.
On April 27, the CFPB published a report regarding the trend of recent complaints submitted to the Bureau by Servicemembers entitled, A Snapshot of Complaints Received from Servicemembers, Veterans, and their Families. According to the report, between July 21, 2011 and December 31, 2014, the areas servicemembers reported to have the most problems with were debt collection, mortgage, and credit reporting. With debt collection making up 39% of the complaints, it is the most common type of complaint the Bureau receives from servicemembers: “[S]ervicemembers assert that the calculation of debt is inaccurate or unfair… [They] complain about telephone collections that are too frequent and that come at inconvenient times. They also complain about debt collectors calling their place of employment or third parties.” In addition to debt collection, mortgage, and credit reporting complaints, the report reveals the following products as problem areas for servicemembers: credit cards, bank accounts, consumer loans, and student loans. The Bureau’s report is an overview of the approximated 29,500 complaints the Bureau received from servicemembers since July 2011.
On March 19, the CFPB announced the publication of its Final Policy Statement on disclosure of complaint narratives. The Final Policy allows consumers who file complaints with the CFPB to “opt-in” to have the actual narrative of the complaint disclosed in the CFPB’s consumer complaint database, with private information scrubbed out of the narrative. Until now, the database contained only general information. The company identified in the complaint will have the option, for a 180 day period, to select from a pre-set list of structured responses to accompany the consumer complaint narrative. Further, the CFPB will disclose the consumer narrative when the company provides its public-facing response or after the company has been in receipt of the complaint for 60 calendar days, whichever occurs first. On the same day, the CFPB issued a Request For Information regarding the potential collection, identification, and sharing of consumer feedback specific to positive interactions with banks and non-banks in conjunction with the complaint handling process.
On February 9, the CFPB released a report detailing complaints associated with reverse mortgages. According to the report, a high volume of complaints concern requests for changes to loan terms, issues related to loan servicing, and foreclosure activities. The report covers approximately 1,200 complaints received from December 1, 2011 through December 31, 2014. The report also notes that “[s]ince the CFPB began accepting reverse mortgage complaints in December, 2011, HUD has issued more than 10 policy changes to the HECM [Home Equity Conversion Mortgage] program.” One of these policy changes, effective after March 2, 2015, will require lenders to conduct financial assessments of prospective borrowers prior to approving the loan. The change is expected to decrease defaults due to non-payment of real estate taxes and insurance for loans originated after March 2.
On November 5, the CFPB announced the release of a report highlighting debt collection issues among older Americans. The report analyzed nearly 8,700 complaints made by older consumers from July 2013 to September 2014. The most common debt collection complaints noted in the report relate to medical debt, debts of deceased family members, and threats to garnish older American’s federal benefits. Notably, of the complaints submitted, 17 percent were related to credit cards and 5 percent to payday loans.