Database that tracks credit card complaints to debut
WASHINGTON — The Consumer Financial Protection Bureau is launching a database that tracks which large banks have had the most complaints about their credit cards and how they were resolved — information some industry trade groups don’t want made public.
The goal of the searchable database is to provide more information to consumers, businesses and advocacy groups about an important financial product, said Richard Cordray, the agency’s director. It will be limited at first to credit card complaints received since June 1 for banks with more than $10 billion in assets.
The beta version of the Consumer Complaint Database will be available Tuesday at the agency’s website, https://www.consumerfinance.gov. The goal is to expand it by year’s end to include more of the thousands of credit card complaints for large banks the agency has received since it opened in July, Cordray said.
Eventually the agency wants the database to include complaints about mortgages and other financial products.
“Each and every time we hear from American consumers about their troublesome transactions with financial products, it gives us important insight. The information helps us, and it should be available to help others too,” Cordray said, calling the agency’s database a major milestone for consumers. “By making our data publicly available, initially in the area of credit cards, we hope to improve the transparency and efficiency of this essential consumer market.”
But some financial industry trade groups have opposed making the database information public. The American Bankers Assn. said it would be a public “outing” of a bank’s relationship with its customers based on “incomplete, unrepresentative and unverified” data.
“Disclosure of these complaints in a public database is going to be seen as government imprimatur of unverified complaints, the accuracy of which nobody can stand up and stand behind,” said Richard Riese, senior vice president at the group’s Center for Regulatory Compliance.
He also said it was unfair that the database won’t cover smaller banks. The consumer bureau directly supervises only large banks for compliance with consumer protection laws.
Ed Mierzwinski, consumer program director for the U.S. Public Interest Research Group, said the database will help customers level the playing field with powerful companies.
“Nobody wants to be first on this list, so that means companies will improve their complaint handling, improve their responsiveness,” he said.
The Consumer Financial Protection Bureau is not the first agency to make complaints about companies public, Mierzwinski said. The Consumer Product Safety Commission, the National Highway Traffic Safety Administration and the Department of Transportation have searchable public databases.
Large banks cover the vast majority of consumer deposits, he said. The Public Interest Research Group and other consumer groups have suggested that the Office of the Comptroller of the Currency, which supervises smaller banks for consumer protection compliance, make its complaints public as well.
The consumer bureau’s database will be searchable in several ways, including by company, product, type of complaint and ZIP Code. No personal information will be included about the customer, agency officials said. The database also will include how the company resolved the complaint: closed with monetary relief, closed with non-monetary relief, closed with an explanation or simply closed.
Complaints will be included only if the agency has verified that the person is a customer of the financial company. But Riese said the verification would mean only that a person was making “ill-founded complaints about the right credit card company.”
The consumer bureau began accepting complaints about credit cards in July, and since then has started taking complaints about mortgages, private student loan companies, and other bank products and services. From July 21 to June 1, the agency received 45,630 complaints, including 19,250 about mortgages and 16,840 about credit cards.
Most of the complaints are sent to the company, and financial firms have responded to 89% of the complaints they have received, the agency said. The most common complaints about credit cards have been about billing disputes. Credit card companies have responded to 94% of the complaints sent to them. Consumers have disputed 16% of the company responses.
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