Mortgage Industry Says CFPB Complaint Process Needs to Change

Following the launch of a complaint database managed by the Consumer Financial Protection Bureau (CFPB), mortgage industry players are seeking some changes to the way complaints are collected and displayed to the public. 

The complaint database has been met with much opposition among businesses and political leaders since its inception, most recently for the way in which it processes and displays complaints, including consumer narratives

The CFPB confirms relationships between the complaining party and the company for which the complaint is being made, and the complaint includes information such as the company or lender’s name, the nature of the complaint, and whether it has been addressed or resolved. But any other information the consumer chooses to include is not substantiated before publication—essentially opening a public forum for consumer feedback. 

Now, industry organizations including the Mortgage Bankers Association (MBA) and Consumer Bankers Association, among others, are seeking changes for the complaint collection and how it is managed. Their comments have been submitted in response to a request from the agency on possible normalization of data in the database. 

The MBA is requesting specifically that the CFPB change its process for publishing consumer narratives, citing their “unsubstantiated” nature. 

“While MBA appreciates the opportunity to provide input on data normalization, this comment should not be regarded as in any way endorsing the public display of unsubstantiated narratives in CFPB’s Database,” the MBA letter states. “In MBA’s view, because more than 80 percent of complaints do not require action beyond an explanation, posting these unsubstantiated complaint narratives will only mislead the consumers the CFPB is charged with protecting.” 

Likewise, the Consumer Bankers Association stressed the need for a process to better substantiate the consumer claims before publication. 

“Our concern… is the potential misinformation generated by the Database. Out of context, unverified data has the potential to mislead consumers away from financial institutions that may offer products and services that would benefit them,” the CBA’s letter states. “While industry has long advocated for normalization, we continue to be concerned consumers are being misinformed by unverified data; stress the importance of cautiously assessing how to properly normalize data; and urge the Bureau to adopt informed disclosures to promote transparency in the marketplace.”

Written by Elizabeth Ecker 

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