WASHINGTON (9/23/14)--The Credit Union National Association does not support the disclosure of narrative complaint data, the organization told the Consumer Financial Protection Bureau (CFPB) in a letter filed Monday.

The letter, signed by Luke Martone, CUNA senior assistant general counsel, outlines a number of concerns with the CFPB's proposal that would allow it to post narrative consumer complaint data to its database.

Currently, the database includes basic information about a complaint and its resolution. The proposal would allow the CFPB to post a complaint to the public database after the institution has responded to the complaint, or after the institution has had the complaint for 15 days, whichever comes first.

CUNA cites potential "negative unintended consequences" of publicly releasing narrative complaint data, particularly that complaints could include inaccuracies, exaggerations and even intentionally false information.

"Under the proposal, we believe it is possible that institutions may effectively be unable to respond to a sufficient degree to consumers' narrative description of complaints," the letter reads. "We have concern that such financial institutions will be at risk of suffering severe reputational harm that violates basic principles of fairness."

The proposal states that the CFPB will disclose only narratives in which informed consumer consent has been obtained and personal information has been scrubbed. CUNA urged the bureau to only do so after a "fail-proof" method for scrubbing such information has been developed.

"We have great concern that various privacy laws, including the Gramm-Leach-Bliley Act, and other existing privacy protections could effectively prohibit financial institutions from responding to a narrative complaint, at least with any degree of detail," the letter reads. "Essentially, the institution will be prohibited from effectively addressing the complaint in its response due to consumer privacy protections."

CUNA's letter outlines several recommendations for the bureau to improve its consumer complaint process. This includes:

• Developing a process for filtering out clearly frivolous consumer complaints;
• Refining its answer choice format for questions in the complaint form, as well as avoiding narratives entirely;
• Collecting information on a consumer's complaint history against financial institutions, similar to the National Credit Union Administration's Ombudsman form; and
• Including language on the form encouraging consumers to first attempt to resolve the issue with the institution directly before filing a formal complaint with the CFPB.

CUNA had previously expressed concerns with similar proposals involving the CFPB's consumer complaint database in May 2011 and January and July 2012.

Use the resource link below to access CUNA's comment letter.

CUNA comment letters