US agency posts thou­sands of com­plaints against banks, oth­ers

The China Post - - WORLD BUSINESS - BY JEFF HORWITZ AND KEN SWEET

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 US$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.

The Amer­i­can Bankers As­so­ci­a­tion, which has been against the data­base since the bureau pro­posed it last year, said the data­base would be “a pur­veyor of at best un­sub­stan­ti­ated, and po­ten­tially false, in­for­ma­tion.”

“To­day’s public dis­clo­sure of un­ver­i­fied con­sumer com­plaint nar­ra­tives doesn’t ad­vance that goal and may threaten con­sumer pri­vacy,” the or­ga­ni­za­tion said.

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/

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