[author: Lauren A. Champaign]

Yesterday, June 19, 2012, the Consumer Financial Protection Bureau (“CFPB”) launched the first public database of complaints against credit card companies. The database shows the different complaints that have been filed against any bank that issues credit cards. The director of the CFPB, Richard Cordray, reports that the new database is not only about keeping consumers informed, but also about providing the CFPB with important insight into consumers and problematic transactions with credit card related financial products.

The new database will track consumer credit card complaints and will also identify problems in the credit card market. The database is searchable by the name of the company, the type of complaint, the consumer’s zip code, and the type of relief afforded to the consumer, whether monetary or through an explanation. Consumer information is not disclosed. Yet, consumers can see the types of issues that other customers are facing across the country. The complaints run the gamut of issues, from problems with billing to interest rates to identity thief. 

The database is the first of its kind and has placed a large microscope over the operations of the financial institutions, particularly the major industry leaders. The database is in test form, displaying only a sampling of the complaints. Currently, a little over 100 of the roughly 17,000 credit card complaints sent to the CFPB since last July are displayed. It remains to be seen how this public disclosure will affect financial institutions, but many, including the American Bankers Association, worry about the negative implications of the government publishing unsubstantiated and potentially misleading data.  

The CFPB has announced possible plans to create similar databases for student loans, mortgages, and bank accounts.

The database potentially increases the risk exposure to credit card companies that could face negative publicity from public complaints without having clear compliance guidelines as to what is required by many of the consumer protection provisions in Title X of Dodd Frank.