Monday, June 4, at midnight (ET) marks the deadline for filing public comments on the Consumer Financial Protection Bureau’s latest inward-facing Request For Information (RFI); this one is on the future of the public Consumer Complaint Database, which has been disparaged for years by various bank industry actors and their coin-operated think tanks but most recently by the CFPB’s acting director, Mick Mulvaney. The full-time OMB Director has told the Senate (and industry audiences as well) that he is required in his part-time job to collect complaints, but not to run a “Yelp for banks.” But for another view, also see the recent Washington Post column: “We need more, not fewer, government Yelps.”
“Closing the CFPB database would be a major step backward in what has been a remarkable information revolution in government. As a principled conservative, Mulvaney should be advocating for more apps that empower consumers to make better-informed decisions, drive improved markets and mitigate the need for more heavy-handed regulatory interventions.”
When the CFPB’s first and only Senate-confirmed director, Richard Cordray, announced its new public consumer complaint database in 2012, he said that:
“The Consumer Complaint Database is a major milestone for consumers and all those who are interested in knowing more about their day-to-day experiences. We believe this is the first time that the general public has been able to see such individual-level consumer complaint data for financial products and services. We intend to make this data widely available to consumers, advocacy groups, businesses, policy makers, and journalists. Anyone with access to the web will be able to review and analyze the information, and draw their own conclusions.”
Making government more transparent to make markets work better wasn’t a new idea. Indeed, the National Highway Traffic Safety Administration (NHTSA) established a public complaint and recall database, now online at safercar.gov, during the Carter Administration in the 1970s. In 2008, Congress even required the Consumer Product Safety Commission (CPSC) to establish saferproducts.gov as part of major 2008 reforms. Other agencies, such as FDA and FAA, make complaints public.
But the vitriol and attacks from the financial industry at the CFPB’s wildly successful effort knows no bounds. Quite simply, the industry’s arguments have no clothes. The bureau’s database is not unique. And of course, nor is the acting director’s pejorative, disdainful use of the term “Yelp for banks,” accurate. Unlike online rating sites, the CFPB both carefully confirms account relationships and gives companies a chance to respond before posting complaints.
The CFPB has regularly responded to concerns of regulated firms to improve the database from their perspective. It has also improved it for consumers and other users, including researchers. In particular, in 2015, it began to make consumer complaint narratives, or stories, part of the publicly-viewable fields, (but only if the consumer opts-in). As Director Cordray said at that time:
“Narratives humanize the problems consumers face in the marketplace. Today’s policy will serve to empower consumers by helping them make informed decisions and helping track trends in the consumer financial market.”
Consumers can scroll through narrative stories and say “that’s exactly the way they treated me!” And researchers who study the marketplace, including U.S. PIRG, can look for trends. We’ve published 11 reports (and counting) based on information culled from the databases over one million public complaints. Companies that want to avoid consumer problems can look at practices of others that consumers find unfair. The public database is a win for everyone, except corporate wrongdoers that want to hide their practices.
Watch this space soon for our next CFPB database report. We’ll be filing the report “Shining a Light on Consumer Problems: The Case for Public Access to the CFPB’s Financial Complaints Database” as a comment to the CFPB’s RFI, tomorrow Monday. You can file a comment, too, before that midnight Monday (ET) deadline for filing public comments. Transparent government is better government.
Senior Director, Federal Consumer Program, U.S. PIRG Education Fund
Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.