MBA Letter: CFPB Complaint Database ‘Misleads Consumers’

The Mortgage Bankers Association, in a letter to the Consumer Financial Protection Bureau, reiterated its strong objections to the current structure of the Bureau’s Consumer Complaint Database and offered several recommendations to improve the Database.  

The letter, in response to a CFPB request for information regarding “possible normalization” of data contained in the Database, urged the Bureau “at minimum” to issue a new Request for Information regarding the Database.  

“While we strongly object to the public display of unsubstantiated complaint narratives in the database, MBA believes taking the several steps we recommend, including seeking further comment, could improve the Database,” wrote MBA Senior Vice President Public Policy & Industry Relations Steve O’Connor. “Should the CFPB develop specific options to normalize this data, we urge at minimum the issuance of a new RFI.”  

The letter noted MBA’s support of the CFPB’s efforts to assist consumers in making responsible financial choices and its establishment of a portal or gateway so companies can give prompt attention to complaints from consumers filed with the CFPB. MBA reiterated the industry’s efforts and financial resources into receiving, understanding and responding to consumer feedback.  

“Companies are in constant communication with their customers, through multiple channels, to improve the customer experience,” the letter said. “Additionally, they have built reporting, analytics, and other platforms that enable them to enhance customer engagement and expeditiously address any complaints.”  

MBA emphasized its letter “should not be regarded as in any way endorsing the public display of unsubstantiated narratives in CFPB’s Database. In MBA’s view, because more than 80 percent of complaints do not require action beyond an explanation, posting these unsubstantiated complaint narratives will only mislead the consumers the CFPB is charged with protecting. We therefore urge that complaints be verified before narratives are posted. At the very least, the CFPB should establish procedures to take down complaints not requiring action.”  

MBA also reiterated that “it is not clear that posting unsubstantiated complaints is an effective use of the CFPB’s time or resources.” It noted, as in previous comment letters, that the internet already provides consumers ample opportunity to comment and rank through numerous channels virtually any company, product and service through widely known websites such as Google, Yelp, Facebook, Angie’s List and the Better Business Bureau, which aggregate and publish consumers’ reviews and ratings of financial service providers, both positive and negative.  

“Many of these sites invite consumers’ to rank their experiences in a nonbiased manner, rather than in the context of a ‘Consumer Complaint Database,'” the letter said. “As such, their rankings are likely to be more valuable as a consumer decision tool than rankings based almost exclusively on complaints. Considering the reach of these sites, it is unnecessary as well as unwise to also employ the imprimatur of the United States government in this work.”  

Should the CFPB continues to post unverified complaints, MBA urged normalization and changes to the database to make the information more accessible to consumers. It made the following recommendations:  

  • Better clarifying that the narratives themselves are not reviewed and that experience indicates most do not require action;
  • Establishing take down procedures for complaints that have not required action;
  • Separating servicing and origination complaints;
  • Including simpler subcategories;
  • Including ratios of complaints and resolutions requiring action for all lenders;
  • Including lending and servicing volume to normalize complaints for larger and midsize lenders and servicers; 
  • Including some information about the context for a complaints, for example a time frame describing the borrower’s last payment date; and
  • Removing old complaints and unresolved complaints from the public database. 

“Nevertheless, since no specific proposals were provided, we urge the CFPB to issue at least another request for information if not a full rulemaking process to implement changes to normalize the Database,” MBA said.