The CFPB held a field hearing yesterday in El Paso, Texas, at which it described its proposal to expand the complaint data it publicly discloses in its Consumer Complaint Database to include consumer complaint narratives. We previously reported about the proposal, which was released by the CFPB before the hearing.
Director Cordray identified three main reasons why the CFPB believes it is important to expand the Database to include narratives.
First, Director Cordray suggested that narratives provide additional information that is critical for fully understanding a complaint. “Narrative descriptions,” remarked Director Cordray, “contain the heart and soul of the complaint,” providing “vital information about why the consumer believes she was harmed.”
Second, Director Cordray suggested that narratives will assist those who use the Database in spotting trends. The additional, more specific information contained in a narrative can help industry and policymakers alike identify problems that may need to be addressed. Such information may not be reflected in the broad categories of information currently reflected as part of the Database.
Finally, Director Cordray argued that narratives will help consumers make more informed decisions. Drawing a comparison reminiscent of Senator Elizabeth Warren’s well-known toaster analogy, Director Cordray explained that the CFPB wants the Database to function like the Consumer Product Safety Commission website, Safer Products dot gov, or the National Highway Traffic Safety Administration’s website, Safer Car dot gov. which provide consumer narratives in their public complaint databases. Director Cordray suggested that complaint narratives will help empower consumers of financial services with similar information as that provided through these sites, and also encourage businesses to provide better products.
Director Cordray also described the nuts-and-bolts of the proposal itself, including the requirement for consumers to affirmatively opt-in to have their narratives disclosed. In short, Director Cordray explained that by allowing consumers to make their complaint narratives public, the CFPB hopes to encourage more consumers to make complaints and “offer people a megaphone” to tell their stories.
The hearing touched on one of our principal concerns with including complaint narratives. In short, the complaint may not be valid, and yet its narrative may be publicly available before the target business has had an opportunity to investigate. Though the target of the complaint may respond before the narrative is made public, and its response will be included along with the narrative, the target must do so with 15 calendar days. This timeframe is unreasonably short.
One of the panelists, Heather Shull of Western Union, explained that Western Union often needs to interface with consumers more than once to adequately address complaints, in part because the complaint narrative does not contain sufficient information to understand the issue. Complaints made in social media and other public forums suggest that consumers who opt to make their complaint narrative public will provide less detail, which will make it more difficult and time-consuming for institutions to respond.
We remain concerned about the CFPB’s proposal, and have joined with industry in expressing our concerns about it. The El Paso field hearing has further validated those concerns.