Dive Brief:
- The Consumer Financial Protection Bureau (CFPB) announced Wednesday that its complaint portal will remain public, but will include "modified disclaimers to provide better context to the published data."
- Industry groups such as the Consumer Bankers Association (CBA) and the American Bankers Association (ABA) have expressed support for the modifications. The groups have long called for changes to the agency's complaint portal, which they say unfairly damages financial institutions' reputations by posting unverified negative information from customers.
- Changes to the CFPB's portal come as the agency's leadership structure and constitutionality are being challenged by the Department of Justice (DOJ).
Dive Insight:
The CFPB has handled more than 1.9 million complaints since its inception in 2011, it said. Although companies said unsubstantiated claims posted on the portal harm their reputation, consumer groups said the feature protects consumers and roots out bad behavior.
CFPB Director Kathy Kraninger addressed these concerns during a speech Wednesday at a consumer conference outside Chicago.
"Many consumer advocates have said they want the public database to continue," she said. "Businesses have gone so far to say that they view the database as the government's version of Yelp."
Kraninger said "the database is here to stay," but will feature enhancements meant to present consumers opinion and other information fairly and accurately.
Among the changes, the CFPB said its website will "more prominently display disclosures making it clear that the Consumer Complaint Database is not a statistical sample of consumers' experiences in the marketplace."
The agency said it would highlight the availability of answers to common financial questions to help inform consumers before they submit a complaint. The website will also emphasize the consumers' ability to contact the company directly for specific questions.
"For too long, the Bureau's unverified complaint database has functioned to paint a picture of guilt through government press releases and statements — despite the CFPB reporting the overwhelming majority of complaints being self-corrected by banks," CBA President and CEO Richard Hunt said in a statement following the CFPB's announcement. "These changes are an important first step in helping financial institutions better serve their customers and ensuring consumers' needs are still heard."
Virginia O’Neill, the ABA's executive vice president of regulatory compliance and policy, said the trade group also favored the changes.
"Consumer feedback is important to all businesses, but only if that feedback is trustworthy and reliable," O'Neill said in a statement. "The addition of prominent disclosures indicating that the Bureau doesn't verify allegations in complaint narratives and that complaints don't necessarily represent all consumers' experiences are appropriate and welcome."
Changes to the portal come as questions swirl around the CFPB's constitutionality and leadership structure.
The DOJ filed a brief Tuesday asking the Supreme Court to take a case challenging the agency's leadership structure.
In a letter sent to Senate Majority Leader Mitch McConnell, R-KY, and House Speaker Nancy Pelosi, D-CA, Kraninger said she supports the DOJ's position that President Donald Trump should be able to fire her at his discretion.
"Litigation over [the CFPB's constitutionality] has caused significant delays to some of our enforcement and regulatory actions," Kraninger wrote in an email to bureau staff, which was reported by American Banker. "I believe this dynamic will not change until the constitutional question is resolved either by Congress or the Supreme Court."
