WASHINGTON (8/20/14)--The Consumer Financial Protection Bureau's (CFPB) plan to allow consumer narratives in its complaint portal could likely work against consumers, as well as financial institutions, by spreading inaccurate information, according to the Financial Services Roundtable (FSR).
The FSR, which represents large integrated financial services companies, launched a campaign featuring social media and multimedia advertisements highlighting problems with the bureau's proposal.
The CFPB has accepted consumer complaints since it opened in 2011 and, to date, has handled more than 400,000 complaints. It announced the proposal to expand its consumer complaint database to include the consumer's narrative account of their experience and the problem they would like to see resolved.
The bureau said this would give context to complaints, spotlight specific trends and help consumers make more informed decisions. Those against the proposal worry it would spotlight inaccurate information without giving a named financial institution the chance to respond.
"The CFPB's plan will feature only one side of the story, and such one-sided accounts will not advance the CFPB's mission of better informing and helping consumers," said FSR President/CEO Tim Pawlenty.
The FSR cites the CFPB's own Consumer Response Report from 2013 that found, among other things, that almost 70% of all complaints filed were closed with a simple comment or clarification to the consumer.
According to the FSR, there are many unanswered questions in the CFPB's proposal, including how the CFPB plans to protect the identities of contributing consumers from the Freedom of Information Act and other public record requests and how the bureau will verify that a consumer is posting under a correct identity with an accurate account of what transpired.
On Aug. 6, the CFPB blog posted an item about universities in the Big Ten Conference that did not disclose partner contracts with financial partners for products. The report named four credit unions as failing to disclose details of the school and the financial institution it partnered with, but had to remove two credit unions from the article after it was found there was no such agreement in place.
The Credit Union National Association's Deputy General Counsel Mary Dunn took to the blog's comments to express concern that the blog entry, particularly the headline, made the impression that nondisclosure of a partnership meant these institutions were hiding information from consumers, when in fact many such disclosures are public, in accordance with state law or practices.
CUNA maintains that the other two credit unions should not have been named because there is no legal or regulatory requirement for such disclosures.
"There is no current regulatory requirement to publicly disclose a financial institution's contract with a college or university. Even so, some credit unions voluntarily choose to disclose these agreements, including two credit unions that were listed in your blog," Dunn wrote.
CUNA is currently pursuing issues related to consumer narratives being added to the CFPB complaint database with its consumer protection subcommittee.