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NAFCU calls on CFPB to stop publishing unverified complaints

WASHINGTON, DC (June 5, 2018) — National Association of Federally-Insured Credit Unions (NAFCU) Regulatory Affairs Counsel Kaley Schafer today sent a letter to the Consumer Financial Protection Bureau (CFPB) urging the bureau to stop publishing unconfirmed information on its website and allow financial institutions to provide their own perspective in complaint reports.

“NAFCU believes that the Bureau should not publish consumer complaint narratives on its website, or in any other format. There is no shortage of alternative channels through which consumers can comment on or critique the conduct of financial institutions,” Schafer wrote. “The recent comment made by Director Mick Mulvaney analogizing the Database as ‘Yelp for financial services sponsored by the federal government’ emphasizes this fact and highlights the degree of subjectivity which permeates the Database.”

Schafer also highlighted that credit unions take their member-owners’ issues seriously and work to resolve them efficiently and effectively, but that “current public reporting practices skew transparency and do not work as intended.” When unverified complaints are published on the CFPB’s consumer complaint database, it “can pose serious reputational risks to targeted institutions.”

To improve consumer reporting practices, Schafer recommends:

not publishing complaint narratives, especially unverified ones, on the CFPB’s website;
implementing additional safeguards to verify narratives if the CFPB continues to publish consumer complaints;
stopping the publication of monthly complaint reports as they do not accurately depict the financial services industry;
allowing companies to supplement complaint reports, if the bureau continues to issue them, with their own perspective and data to provide consumers with more context about complaints;
allowing consumers to differentiate complaints by company, institution type or market size to give more context for complaint information; and
forwarding consumer complaints to agencies, such as the NCUA, faster for resolution, as many complaints are resolved by the time a notification is received from the respective agency.

The letter was in response to the bureau’s request for information (RFI) on its processes related to collecting and responding to consumer complaints and inquiries.

About NAFCU

The National Association of Federally-Insured Credit Unions is the only national trade association focusing exclusively on federal issues affecting the nation’s federally-insured credit unions. NAFCU membership is direct and provides credit unions with the best in federal advocacy, education and compliance assistance. For more information on NAFCU, go to www.nafcu.org or @NAFCU on Twitter.