Banking Association Urges Further Scrutiny of CFPB's Complaints Database by Federal Inspectors

The American Bankers Association this week sent a letter to the Federal Reserve’s Office of the Inspector General (OIG) offering support for two ongoing audits of the CFPB’s complaints database and urging the OIG to expand the scope of the audits to address, among other things, the CFPB’s proposed plan to publish consumer narratives alongside complaints.

The Fed’s OIG currently has 11 ongoing audit and evaluation projects within the CFPB. Another three are in the “planned” stage. Two of those projects are focused on the CFPB’s complaints databases. Both are expected to close in the first quarter.

The OIG is auditing certain controls within the CFPB’s Public Consumer Complaint Database, the portal anyone can access and run reports against. Specifically, the audit objective is to “assess the effectiveness of the CFPB’s controls over the accuracy and completeness of the public complaint database.”

The ABA’s letter noted that this audit is very important to the financial services industry. The group wants to make sure the CFPB is not becoming “an official purveyor of unsubstantiated, and potentially false, information.” The ABA said the OIG’s audit should “examine the degree to which complaint data that are published relate to a legal or regulatory violation or a practice or failure, as opposed to a more generalized expression of consumer frustration or anger.”

ABA also wants the OIG to investigate the status of an initiative to update certain complaint categories offered to consumers. Noting that the CFPB has “long promised” this update, the group said that it would impact help not only industry, but consumers.

insideARM has noted in the past that within Debt Collection complaints, the “Sub-Product” field does not have sufficient selections. This field is used by consumers to identify what kind of debt caused the complaint. In 2014, 49.6 percent of all debt collection complaints were tagged as either “Other” or simply unclassified.

In addition to the support offered for the ongoing public complaints database audit, the ABA wants the OIG to expand the scope of the audit to include the proposed controls for the publishing of consumer narratives in the public database.

The CFPB currently provides to consumers a text box to describe what happened and consumers can attach documents to the complaint. When the Bureau forwards the complaint to the company named, the narrative text and documents (if any) are provided. But the information is not published in the public database. Last summer, the CFPB proposed adding that text field to the public complaint record.

The move was met with sharp criticism from the financial services industry, including from ARM organizations. The ABA strongly opposed the move, as it notes in the letter, as did ACA International, NARCA, and a new group formed by former Minnesota Governor Tim Pawlenty, among many others.

The ABA wants to ensure that the publication of the narratives has proper controls. The group is concerned that the CFPB’s proposal did not include measures to promote the “objectivity, reliability, and relevance of the information for consumer decisionmaking.” The ABA also wants OIG to make sure the CFPB’s staffing plan within Consumer Response is adequate to handle the additional work sure to be required to vet the consumer narratives for publication.