CFPB’s Monthly Complaint Report Focuses on Mortgages

On February 8, the CFPB released its monthly complaint report for December 2016. The report focused on complaints about mortgages. Along with debt collection and credit reporting, the report stated that mortgages are consistently among the three products and services generating the most complaints to the CFPB, and that since July 21, 2011, mortgages have been the second-most-complained-about product, representing 24 percent of all complaints. The most common issues raised by consumers are problems that arise when they are unable to pay their mortgage, such as issues related to loan modifications, collection, and foreclosure. Such issues were raised in 49 percent of complaints about mortgages. Other common issues raised in consumer complaints relating to mortgages include making payments (such as the misapplication of payments (33 percent)), applying for a mortgage (9 percent), signing the agreement (5 percent), and getting an offer of credit (3 percent).

The Report also noted that student loans showed the greatest increase in complaints year-over-year of any product or service—a 109 percent jump. The CFPB believes the increase may be due, at least in part, to the result of a February 2016 update to its student loan intake form allowing the submission of complaints about Federal student loan servicing. During the same period, complaints about prepaid products, payday loans, and mortgages declined by 59 percent, 23 percent, and 5 percent respectively—continuing a trend also observed in the Bureau’s last complaint report.

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CFPB Monthly Complaint Report Spotlights Prepaid Complaints

On October 25, the CFPB released its latest monthly report of consumer complaint trends. This month’s report highlights prepaid complaints, noting that since July 21, 2011, the CFPB has received approximately 6,000 prepaid complaints. According to the report, the “most common issues identified by consumers are problems with managing, opening or closing an account (32 percent) and unauthorized transactions or other transaction issues (30 percent).” Additional prepaid complaints highlighted in the report include: (i) consumers experiencing delays in receiving a replacement card after having notified a company of fraudulent or unauthorized charges to their prepaid cards; (ii) difficulty using a prepaid card after having purchased one; (iii) assessing dormancy fees that depleted the card’s balance; and (iv) balance discrepancies. Consistent with past reports, this month’s issue lists the top ten most-complained-about companies across all financial products, as well as the top seven most-complained about companies for prepaid-related issues. Finally, the report identifies North Carolina as its geographical spotlight, observing that, as of October 1, 2016, the CFPB has received about 27,600 complaints from North Carolina consumers.

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CFSA Releases Positive Payday Loan Testimonials Submitted to the CFPB

On September 6, the Community Financial Services Association of America (CFSA) released a 2,000-plus page document containing testimonials submitted to the CFPB regarding consumers’ positive experiences with the payday loan industry. A CFSA representative uncovered the allegedly “buried” stories through a Freedom of Information Act (FOIA) request filed December 31, 2015. According to the CFSA, of the newly discovered 12,546 consumer comments regarding to the payday loan industry, 12,308 “praised the industry and its products and services, or otherwise indicated positive experiences.” Among other things, the CFSA further noted that (i) since the CFPB implemented its consumer complaint portal in 2011, approximately 1.5% of all complaints received related to the payday loan industry; (ii) in an FTC 2015 summary of consumer complaints, the “FTC found that just 0.003% of more than three million complaints related to payday lending”; and (iii) at least two customer surveys reveal that payday loan borrowers are overwhelmingly satisfied with the product. Regarding the CFPB’s proposed rules to address the short-term lending industry, CFSA CEO Dennis Shaul commented, “[i]t is clear that millions of consumers are satisfied with the payday loan product and services, and do not want the federal government to take this valued credit option away from them.”

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CFPB Monthly Complaint Report Highlights Bank Account and Service Complaints

The CFPB recently issued its monthly report of consumer complaint trends for August. The report spotlights complaints regarding bank accounts and account services, noting that issues related to checking accounts are among the most common complaint (64%). Specifically, the report highlights consumer complaints about the increasing use of credit reporting data to screen customers prior to account opening, with consumers often complaining that they learn of negative reporting information for the first time when trying to open an account and that they have difficulty addressing potential reporting errors. The report also describes consumer frustration with overdraft fees, including when such fees are incurred for small-dollar purchases. Consumers also expressed confusion over eligibility requirements for promotional offers when opening new accounts, and submitted complaints involving “disputes over whether the consumer had met the required terms for a promotional offer.” In addition, the report noted concerns about financial institutions’ error resolution processes, including concerns with drawn-out response times for disputed transactions.  Read more…

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CFPB Publishes Report on Student Loan Complaints, Issues Income-Driven Repayment “Fix It” Form

On August 18, the CFPB published a report to provide a midyear update on student loan complaints, focusing on “problems for borrowers who submit an application to enroll in or recertify income and family size under an income-driven-repayment (IDR) plan.” The report analyzes student borrower complaints related to IDR plans and offers recommendations to “address the challenges identified in [those] complaints.” The report analyzes complaints submitted from October 1, 2015 through May 31, 2016 and finds that “borrowers encounter obstacles when submitting applications for IDR plans, including poor customer service, unexpected delays, lost paperwork, and inconsistent or inaccurate application processing.” The CFPB recommends that student loan servicers take “immediate action” to address challenges with IDR processing, highlighting the policy guidance recently issued by the Department of Education as a “roadmap to strengthen practices related to the handling of IDR applications” and releasing an IDR Application Fix It Form (Fix It Form). Developed by the CFPB, the Fix It Form is a prototype that can be adopted by servicers seeking to adopt the recommendations in the report and is designed to “document[] any deficiencies with borrowers’ IDR applications and communicates to borrowers about how to address the deficiencies and get their applications back on track.”

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