The Consumer Financial Protection Bureau (CFPB) will begin publishing credit card complaints today in a searchable database, allowing the public for the first time to scrutinize the way individual banks handle complaints.
Industry groups have warned that consumer complaints are subjective, unverified and irrelevant, and said identifying the banks involved serves no public policy, but could significantly harm their reputation. Some even suggested the bureau doesn't have the legal authority to release such detailed data.
But agency officials defended the release of the information, which Director Richard Cordray said will be easily searchable and widely available to consumers.
"We believe the disclosure of this data not only serves the public interest, but promotes the advancement of the free market system," Cordray said on a conference call with reporters Monday. "Anyone with access to the Web will be able to review and analyze the information and draw their own conclusions."
The agency also released a snapshot Monday of the complaints it has gathered — more than 45,000 since July 21, 2011 — and it published a notice seeking comment on adding other types of complaints to the database, which will go live at 8 a.m.
CFPB began taking credit card complaints as soon as it became an independent agency, and added mortgage complaints in December. In March, it began accepting complaints for other bank products and services, including private student loans, auto loans and other consumer loans.
Almost immediately, Cordray said, people started requesting information about those complaints, and the bureau sought feedback in December on how that data should be released.
In response to the feedback, CFPB launched a beta version of the database Tuesday morning that includes complaints it has received since June 1. While there have only been about 100 complaints processed since then, the agency intends to provide additional retroactive data by the end of the year, when the site will lose its "beta" tag and go live.
Before a complaint is added to the database, the bank named in the complaint has to verify that there is indeed a commercial relationship with the consumer. One of the challenges for CFPB staff is that consumers sometimes don't know the exact name of the bank or card issuer, one senior CFPB official said.
Agency staff will also screen complaints to ensure the bank is within the CFPB's jurisdiction — complaints for banks with less than $10 billion of assets will be forwarded to the Office of the Comptroller of the Currency, for example — and that the complaint has not been submitted more than once.
Each entry includes certain data about the individual complaint, including the type of complaint, date of submission, the consumer's zip code and the company that the complaint concerns. It also includes information about the action taken, including how long it took the company to respond, how it responded and whether the consumer disputed the response. It does not include any confidential information about a consumer's identity.
The public can search the complaints using specific search fields, including complaint type, issuer, location, date or any combination thereof. They can filter or aggregate the data, and can also download it from the site.
Because the database is still in a "beta" version, Cordray said he expects the agency will tweak it this year, perhaps including additional search fields and visualization tools.
It's not clear how long the complaint data will remain on the bureau's website.
As of June 1, the bureau has received approximately 45,630 complaints, including approximately 16,840 credit card complaints, 19,250 mortgage complaints, 1,270 private student loan complaints and 6,490 complaints on other bank products and services. Companies have already responded to approximately 33,000 complaints, about 89% of the complaints sent to them by the bureau, according to snapshot CFPB released Monday on complaint data.
In comment letters issued earlier this year, industry groups complained that the data — which will be updated daily through the database — is unreliable.
"Bureau publication of complaint data alone implies an official endorsement of inferences drawn out of context and suggests reliability about overall issuer customer experience and satisfaction that is not well-founded and that invites untrustworthy analysis that will mislead consumers," Nessa Feddis, the vice president and regulatory counsel for the American Bankers Association's (ABA) Center for Regulator Compliance.
They also urged the bureau not to disclose the names of card issuers, claiming it could unfairly harm those issuers.
"There is no public policy purpose served by the release of data by issuer," the American Financial Services Association (AFSA), Consumer Mortgage Coalition (CMC) and Mortgage Bankers Association (MBA) said in a joint comment letter Jan. 30. "Disclosing the names of individual card issuers serves only as fodder for plaintiff attorneys."
The agency did respond to one specific industry complaint: it expanded the categories of relief that issuers may select when describing how a complaint was resolved.
In some cases, banks that provided non-monetary relief — such as a loan modification — had to describe the complaint as "closed without relief."
As of June 1, CFPB shifted its response categories to include "closed with monetary relief," "closed with non-monetary relief," "closed with explanation," and simply, "closed."