The Mortgage Bankers Association strongly opposes making public the Consumer Financial Protection Bureau’s consumer complaint narrative database, an open letter from the MBA to the CFPB says.
The CFPB is proposing a new policy that would empower consumers to publicly voice their complaints about consumer financial products and services.
Under the proposal, when consumers submit a complaint to the CFPB, they would have the option to share their account of what happened in the CFPB’s public-facing Consumer Complaint Database.
“CFPB and industry data show that very few consumer complaints warrant any action beyond an explanation. Consequently, MBA believes the CFPB’s posting unsubstantiated and frequently emotional narratives with accompanying complaints could mislead consumers and undermine the stated goal of improving consumer decision making,” says the 12-page letter, signed by Pete Mills, senior vice president for Residential Policy and Members Services at MBA.
The full MBA letter can be viewed here.
Several of the MBA complaints track with issues raised by the Mercatus Center at George Mason University, which can be read here. HousingWire has covered a number of problems with the program in news articles and op-eds.
The CFPB has fielded similar complaints about the program from other sources and from HousingWire, and their response to these objections can be read here.
“In addition, displaying of such narratives threatens consumers’ privacy…Providing an opportunity for companies to respond to unsubstantiated narratives does not solve these privacy problems and is not workable,” Mills continues in the MBA letter.
The letter goes on to say that the display of consumer narratives will result in significant harm without any real benefits, mislead consumers and cause severe reputational harm to companies.
MBA notes that other agency databases do not provide precedent for this effort by the CFPB, and that they don’t have the statutory authority to make this kind of change.
MBA urges CFPB to abandon the plan to make the database public, or at the least resolve a number of legal problems, while actually vetting the consumer complaints beyond just ensuring that the consumer actually had contact with the company about which they are complaining.
The CFPB says that publishing consumer narratives would provide important context to the complaint, help the public detect specific trends in the market, aid consumer decision-making, and drive improved consumer service.
“The consumer experience shared in the narrative is the heart and soul of the complaint,” said CFPB Director Richard Cordray in a written release when the policy was announced. “By publicly voicing their complaint, consumers can stand up for themselves and others who have experienced the same problem. There is power in their stories, and that power can be put in service to strengthen the foundation for consumers, responsible providers, and our economy as a whole.”
A copy of the proposed policy can be read here.