Weakening the Consumer Financial Protection Bureau May Eliminate the Consumer Complaint Database
The government database helps consumers resolve disputes with financial institutions
A memo by House Financial Services Committee Chairman Representative Jeb Hensarling has revealed that a government complaint database that helps consumers resolve disputes with financial institutions is among several services that may soon be eliminated.
People familiar with the Consumer Complaint Database, which is sponsored by the Consumer Financial Protection Bureau (CFPB), say that it has provided both individuals and businesses with useful information and help.
Representative Hensarling's memo outlined a new version of a bill called the Financial Choice [Creating Hope and Opportunity and Investors, Consumers and Entrepreneurs] Act, which was first advanced in September by the House Financial Services Committee. The Act would result in the repeal of the Consumer Complaint Database as well as eliminating the authority of the CFPB to punish deceptive, abusive, or otherwise unfair practices among banks and other lenders. It would also allow the president to pick, and fire, the director of the CFPB at will.
Consumers have been able to report complaints and receive a response from the company, and even redress in certain instances, since the database first went live in late 2012. Roughly 25,000 complaints are filed every month by consumers about their dealings with banks, credit card companies, mortgage lenders, student-loan servicers, and other financial products and services.
When a consumer files a complaint, the CFPB alerts financial institutions, and the company has to respond to the consumer through the database, usually within 15 days. The bureau logs complaints in the database, showing not just the company name but also how fast it responded and whether or not the consumer was satisfied with the complaint resolution.
According to the CFPB, restitution from database complaints has played a part in providing relief of almost $12 billion to 29 million consumers over the past five years.
A recent survey conducted by Consumer Reports showed that Americans are concerned about the accountability of the banking industry. Nearly two-thirds of survey participants said that they are either only slightly or not at all confident that banks and investment companies are acting in transparent and responsible manners to charge reasonable fees and protect customers' investments.