By SUZANNE DERSHOWITZ
Last week, the Consumer Financial Protection Bureau (CFPB) launched a brand new credit card complaint database, providing the public with important, new information on which banks have generated criticism from consumers. Making these complaints available online will aid the American people in making responsible decisions about their finances and enhance the transparency of the credit card market. The database is a breakthrough for government openness and accountability, and POGO has been advocating for it since the early days of the CFPB, which was created by the Dodd-Frank financial reform of 2010.
Many of us won’t spend our hard-earned money at a restaurant before checking its reviews on Yelp or book a hotel before scouring TripAdvisor, so why would we choose a credit card before reading consumers’ reviews of the bank and the terms? Well, until now, that was not easy to do. In offering online access to credit card complaints it receives, the Bureau is empowering consumers to bank with those companies that act in the best interest of their customers. For the first time, it won’t just be the individual complainant, the bank, and the regulator who know which companies engage in fraudulent collection practices, leave consumers vulnerable to identity theft, or impose excessive late fees. Disclosing this data will help consumers draw their own conclusions about developing trends and avoid “bad actors.”
When meeting with Elizabeth Warren back in April, 2011 to share open government ideas for starting up the new agency, POGO Director of Public Policy Angela Canterbury brought up POGO’s interest in creating a transparent online complaint database. In our Suggestions for How to Make the CFPB a Prototype for a More Open, Effective, and Accountable Government, POGO suggested that the Bureau examine the Consumer Product Safety Commission’s (CPSC’s) complaint database as a starting place.
We applaud the Bureau for launching the database, even in the face of some opposition from industry. When the Bureau solicited public comments on the proposed policy statement, they received seventeen sets of comments in response. According to the final policy statement the CFPB released Tuesday, industry commenters generally opposed the database, saying that it would only confuse consumers and unfairly damage the reputation of credit card issuers. The Bureau decided not to bow down to industry, but to serve the public interest and go ahead with the database.
POGO joined Consumer Action and other allies interested in financial reform, consumer rights, civil rights, privacy, or open government in supporting the database in public comments to CFPB Director Richard Corday. The Bureau spent months carefully considering and digesting all of the comments they received (as outlined in the final policy statement), demonstrating how government can effectively collaborate openly with civil society organizations to produce a superior tool to better serve the public.
So what shape has this public database taken, and what are its salient features? The Bureau opted for a data platform that allows users to search and filter data across any of the data fields and build their own data visualizations which can be embedded on other web sites and shared through social media. It also provides the data in a machine-readable format, allowing third parties to build their own tools for leveraging the data, further improving the spread of information. CFPB Associate Director of Consumer Response Scott Pluta’s blog post goes into detail on why the Bureau chose to release the beta version of the database now and what possible additions to keep an eye out for when they remove the “beta” tag later this summer.
The database currently contains 10 data categories, including the subject matter of the consumer’s complaint, the company’s response (monetary relief or explanation), whether or not the company responded in a timely manner, and perhaps most importantly—the names of the banks connected to each complaint.
An important note for those who plan to file a complaint—the Bureau is strongly encouraging people to submit complaints through the web to expedite processing time.
The Bureau is still considering including additional fields. Ultimately, POGO found the database to be user friendly and extremely accessible, allowing the average citizen to easily track, sort, search, and download the data.
In addition to the database, the Bureau will continue to publish regular reports containing their own analysis of important patterns identified in the data. So far, the Bureau has published three such reports (see the latest one here). The Bureau also intends for these reports to include some standardized metrics that would provide comparisons across reporting periods. This would have important implications for crafting future financial regulations and policy solutions aimed at protecting consumers.
What next steps does POGO hope the Bureau will take to increase the effectiveness of the database? One recommendation on our wish list that was not included in the initial beta version was disclosure of consumer narratives—descriptions of “what happened” and how “fair resolutions” transpired in complainants’ own words. The Bureau cited important privacy concerns in explaining their decision not to disclose narrative accounts. We hope they will follow through on their commitment to consider ways to redact personally identifiable information and give submitting consumers a meaningful choice of narrative disclosure options in the future.
While the database does not currently have a narrative category, the CFPB’s latest report Consumer Response: A Snapshot of Complaints Received does provide a number of compelling success stories. These stories demonstrate the myriad ways the Bureau is protecting real consumers—from Ronald, the blind 77-year-old Army vet who paid off his mortgage in 2007 but found his servicer still demanding $100 a month, to Julio, the 31-year-old waiter struggling to pay off his rapidly increasing private student loan payments. After the CFPB got involved, the bank refunded Ronald his money at three percent interest, sending him a check for $30,000. The CFPB was able to help Julio to get on a reduced-payment program so he could stay afloat while paying off his student loans. We believe the success stories are only the beginning of the good work that will be done by this important new consumer watchdog.
We are excited that the Bureau will be expanding the kinds of data it discloses. While initially it only covers credit card complaints, the Bureau has proposed to extend the database to all other consumer financial products and services covered by the CFPB. They are now accepting public comments until July 19 on the proposed expansion to include products and services.
You can join OMB Watch and Daily Kos in thanking CFPB for standing on the side of transparency here. POGO congratulates the Bureau for creating this much-needed publicly searchable credit card complaint database. Consumers are now finally getting ahead of the game.
Suzanne Dershowitz is a POGO public policy fellow