Auto lenders are lining up to oppose the Consumer Financial Protection Bureau’s plan to publish consumer complaints with financial services providers on its website.
CFPB Director Richard Cordray encouraged consumers to start submitting their narratives in a blog post March 19 on the bureau’s website, consumerfinance.gov. The bureau said it expects to start publishing the narratives at an unspecified date later this year. Consumers can also opt not to share their stories publicly.
Auto lender trade groups have responded quickly.
“The CFPB’s policy on publishing consumer narratives in its public Consumer Complaint Database is impracticable and unworkable,” Bill Himpler, executive vice president of the American Financial Services Association, wrote in an email to Automotive News on March 19. “Publishing unverified and unfiltered claims could pose significant brand and reputational risk to financial services companies.”
At the same time, he said, the CFPB database doesn’t adequately protect consumer privacy.
Frank Keating, CEO of the American Bankers Association, echoed Himpler’s remarks.
“While the banking industry is committed to helping consumers make informed and responsible financial decisions, public disclosure of unverified consumer complaint narratives doesn’t advance that goal and raises significant consumer privacy issues,” Keating said in a statement. “This risks turning the CFPB database into a questionable -- even misleading -- resource and risks tarnishing the reputation of individual companies without substantiation.”
11,941 auto complaints
The CFPB said it intends to remove personal information from the narratives that could identify individual consumers. Specific lenders, however, will be named in the complaints.
Lenders can choose whether to publish a public response to a complaint, the bureau said.
The CFPB proposed enabling consumers to publish complaints in July 2014. Until that happens sometime this year, though, consumers will continue to choose from a limited number of standard choices to categorize their complaints, such as “problems when you are unable to pay” or “managing the loan or lease.”
The CFPB launched the database on its consumerfinance.gov website in 2011, starting with complaints about credit cards. It expanded the database in 2012 to include several other types of consumer finance, including mortgages, student loans and auto loans.
According to the CFPB database, the bureau has tallied 11,941 complaints related to auto loans out of more than 550,000 complaints received since 2011.
Other categories, such as mortgages and debt collection, have generated far more complaints.
“Sharing what happened to you with the public can help others see what’s happening in the financial marketplace,” Cordray said in the recent blog post.
However, Himpler said in a written comment filed with the CFPB last year that consumers are likely to give consumer narratives published on the CFPB site more credibility than they deserve.
“Given the high probability that some of the narratives will contain materially inaccurate information, adding the consumer narratives to the Consumer Complaint Database will not provide consumers with useful information about consumer financial products and services,” he said in the comment.
The ABA and Consumer Bankers Association filed similar comments at the time.