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Sonia Ashe
Advocate Sonia Ashe discusses new database with Director Cordray
Iowa PIRG
Iowa PIRG Advocate Sonia Ashe joined consumer advocates, financial industry leaders and academics in assessing the strengths and areas for improvement in a new complaint database launched by the Consumer Financial Protection Bureau at a field hearing at the Des Moines Central Library attended by CFPB Director Richard Cordray and other high-ranking CFPB officials.
Iowa PIRG is one of the founding members of Americans for Financial Reform, the coalition that continues to fight to protect the Wall Street Reform and Consumer Protection Act of 2010, which had the Consumer Financial Protection Bureau as its centerpiece. The CFPB is the only federal financial regulator with the sole duty of protecting consumers.
The Consumer Complaint Database will aid the CFPB’s ability to communicate directly with consumers through a public website. Collecting consumer complaints aids in CFPB’s research and helps it identify trends for supervisory or enforcement action or for future rule-writing.
“Collecting, investigating and acting on consumer complaints helps the victimized consumers directly,” said Ashe. “It also helps other customers of that firm as well, since identification of problematic activities should result in improved product and service delivery. Publication of consumer complaint information helps other consumers make wise choices. Perhaps most importantly, it allows reporters and researchers to analyze the data and rank firms – which incentivizes a race to the top for good-actors, and encourages bad-actors to clean up their act.
Though some panelists representing the financial industry expressed concerns with tarnished reputations over unverified complaints, Ashe noted that, “Existing product complaint databases have not unfairly created a blacklist of products or irreversibly tarnished companies’ reputations.In practice, disclosure has led to better products and more satisfied customers.”
Ashe cited the National Highway Traffic Safety Commission’s (NHTSA’s) New Car Assessment Program (NCAP) as an example of a similar database with success at increasing accessibility to rating and complaint information. The NCAP encouraged manufacturers to achieve high ratings and voluntarily increase the safety of vehicles. There has been no evidence showing that complaint disclosure has unfairly or irrevocably harmed either automakers or product manufacturers.
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Ashe urged the bureau to expand the database to all financial complaints as soon as possible. “We at Iowa PIRG urge the CFPB to publicly provide greater narrative detail about complaints and their resolution through the database, which we believe can be done without jeopardizing consumer privacy,” Ashe concluded.