CFPB could hide consumer complaints from public, advocates fear

CFPB could hide consumer complaints from public, advocates fear

The federal watchdog that’s supposed to look out for consumers wants feedback on how it handles complaints about companies, and that has some consumer advocates worried.


The Consumer Financial Protection Bureau put out a Request for Information this week asking for public input on its consumer inquiry and complaint database.


As it stands now, consumers can submit complaints and questions to the CFPB on its website, through a referral from a federal or state agency, by telephone, mail, fax or email. The CFPB then publishes those complaints in a public database, where other consumers can read them, as well as see if they have been resolved.


In the RFI, the Bureau asked whether it should remove any of the six ways of taking complaints or add more, and whether third parties, such as lawyers or advocates, should continue to be allowed to submit complaints on a consumer’s behalf.


To consumer advocates, the Request for Information is just the latest evidence that the CFPB’s Director Mick Mulvaney will change the way the Bureau treats complaints, possibly making the CFPB’s database of complaints private and not visible to the public.

During Mulvaney’s testimony to lawmakers this week, Senator Catherine Cortez Masto, a Democrat from Nevada, asked whether the Request for Information is an indication the complaints could be private in the future.


If it were, “How are we to gather information and see patterns and practices?” she asked.


Mulvaney said the Bureau would continue to collect data, as the ability to do that is mandated by the laws that created the CFPB. But making the complaints private “is one option available to me,” he said.


The CFPB did not immediately return MarketWatch’s request for comment.


The CFPB has fielded more than 1 million complaints since it started accepting them in July 2011, and all of them are available for the public to see online. Consumers turn to the agency for help with financial issues ranging from debt collection to mortgage payments.


Making the complaint database private would be another effort to “defang” the Bureau, said Pamela Banks, senior policy counsel for Consumers Union, a nonprofit based in Yonkers, New York.


The fact that the database is public “is vital in helping consumers make better and more informed decisions about their financial products and services,” she said. “It’s a place you can go to find out about a vendor, a product, who’s treating consumers fairly and who’s not.”


The database also helps identify and address harmful practices “before they become a widespread concern,” said Tom Feltner, the director of research at the Center for Responsible Lending, a nonprofit based in Durham, N.C.


Others say the public complaints harm companies.


“Is the purpose of the database just to name and shame companies? Or should they have a disclaimer on there that says it’s a fact-free zone, or this is fake news?,” said Barry Loudermilk, a Republican congressman from Georgia, at a congressional hearing in 2017.


“Once the damage is done to a company, it’s hard to get your reputation back,” said Bill Himpler, the executive vice president of the American Financial Services Association, a trade group, the Associated Press reported.


Advocates have already raised alarm about Mulvaney’s intentions at the Bureau. The CFPB will no longer “push the envelope” with its enforcement, Mulvaney has said. In January, he requested zero dollars in his second-quarter budget request and said the agency had enough money already.


Mulvaney was appointed by President Donald Trump’s administration, to take over for former director Richard Cordray, who was appointed by former president Barack Obama. In one of Trump’s first actions related to the CFPB, he signed a resolution killing a proposal that would have prevented companies from putting “mandatory arbitration clauses” in their contracts. Those clauses require consumers to settle with companies in arbitration rather than in court. Many consumer advocates did not consider that a consumer-friendly policy.


The CFPB will accept comments on its Request for Information for 90 days after the Request is published in the Federal Register. At the time this story has been published, it has not yet appeared in the Register.