The Consumer Financial Protection Bureau released thousands of complaints Thursday from disgruntled customers of banks, credit card companies and other providers of financial services.
The bureau posted a database of the grievances on its website over vehement protests from the financial industry. The database contains 7,700 complaints filed online by people who agreed to air their complaints publicly.
The CFPB offers a disclaimer that it does not investigate the substance of the complaints before posting them. Some postings come with spelling errors, some with gratuitous capitalization of words. The Bureau hopes the compilation of the grievances will point both it and the general public to the personal financial trouble spots of the day.
The targets of the complaints vary widely, and include small debt collection companies as well as Wall Street giants. Among the complaints: U.S. Bank supposedly gave a Wisconsin parent's young son a credit card with a $4,500 limit that he didn't request, and a California couple reported finally catching up on mortgage payments to M&T bank, only to be told they were still a month in arrears.
The database represents a small fraction of the 627,000 total complaints the bureau has received in the four years it's been operating. The CFPB began offering the option of allowing people to publicly share their complaints in March.
"We believe the disclosure of this information is one of the best tools government agencies can use to improve the operation of the marketplace," said Richard Cordray, the Consumer Financial Protection Bureau's director, calling the narratives "a valued educational and shopping tool."
The public posting of the database is a sharp break from the traditional practices of other financial regulators. How and whether the data gets used, whether by fellow regulators, plaintiff's attorneys or people shopping looking for a new bank, won't become apparent for a while.
For now, many people making complaints to the CFPB are choosing to share them. According to the Bureau, more than half of the people who've filed complaints since March chose to make them public.
The individual grievances and the public database were created despite repeated protests from the financial services industry.
In a response to the Bureau's proposal to begin publishing the complaints, the American Bankers Association declared in September that the database would be "a purveyor of at best unsubstantiated, and potentially false, information." Credit reporting giant Experian, which has just over 21,000 complaints in the Bureau's overall database, argued that the complaints would likely contain "inaccurate, misleading, or even derogatory or offensive statements."
Consumer advocates supported the Bureau's plan, praising the potential to lead researchers and regulators to newly emerging objectionable practices.
In previous retail banking controversies, such as the practice of banks re-ordering daily debit card transactions to produce additional overdraft penalties, people complained for years before regulators took notice. Meanwhile, banks such as JPMorgan Chase were logging thousands of overdraft complaints each month, according to documents later produced in a class action lawsuit.
The database can be found online at http://www.consumerfinance.gov/complaintdatabase/
Sweet reported from New York.