Last month, the CFPB announced that it was adopting its controversial proposal to publicly disclose consumer complaint narratives in its consumer complaint database, and would give companies, within the company web portal, an opportunity to recommend which option, if any, from a “set list of structured company response options” it wanted to include as a public-facing response to a complaint. The American Bankers Association recently sent a letter to the CFPB in which it offers feedback from its members on the CFPB’s “structured response” approach and suggestions for changes to the consumer response portal and database.

In explaining its use of a “structured response” approach, the CFPB indicated its belief that such approach would enhance the effectiveness of the database and provide an opportunity for companies to enhance their reputation and mitigate potential concerns. In its letter, the ABA states that the approach, in practice and as currently designed, will achieve neither goal. According to the ABA, a structured response will not provide valuable information to consumers, and may increase significantly the potential for reputational damage to the individual bank and the industry as a whole. This is because, in contrast to a consumer complaint narrative “which is likely to express strong emotion,” a standardized response could suggest indifference by the company and “unfairly cast the entire industry as out of touch and unconcerned with consumer satisfaction.”

According to the ABA, several of its members have expressed interest in being able to write their own “structured” response to be used at the bank’s discretion to respond publicly to a customer’s narrative. It provides the following example of such a response: “[Bank name] values the confidentiality of customer account information and your privacy. We do not publish responses to customer complaints; instead, we will respond privately through the Consumer Response Portal.” While such individually-crafted responses would not address the specifics of the complaint narrative’s allegations, the ABA believes such responses would provide an opportunity for a bank to report that it responded to the complaint and engaged with the customer, and alert the public to the fact that banks respond privately to each complaint. Accordingly, the ABA urges the CFPB to make this option available to interested banks.

In the letter, the ABA urges the CFPB to make the following changes to the portal and database before it begins to publicly disclose complaint narratives:

• Establish a process for identifying a complaint as “materially inaccurate.” The CFPB’s company portal manual allows portal users to request that “qualifying complaints” be withheld from publication if they are found to contain “materially inaccurate information.” However, the ABA comments that the manual does not contain guidelines for how to request that a complaint be withheld or standards for reviewing such requests. It also comments that the CFPB has not established a process for identifying a complaint as materially inaccurate, standards by which those determinations will be made, and applicable timeframes.
• Add a field to the portal that indicates whether the consumer has opted in to publication of the complaint narrative. The ABA observes that the manual states that the portal will not indicate whether a consumer has consented to the publication of the complaint narrative, and instead, banks will first learn that a customer has opted in when the narrative appears on the database.
• Establish a process for identifying a complaint that was not submitted in good faith. The ABA suggests that to reduce the likelihood of the database becoming “a platform for abuse or manipulation by individuals or advocacy groups,” the CFPB could employ a process by which banks can notify the CFPB when a complaint has not been submitted in good faith.
• Adopt a stronger and more conspicuous disclaimer as an additional assurance against consumer misinformation. The ABA notes that the current disclaimer states only that “We don’t verify all the facts alleged in these complaints but we take steps to confirm a commercial relationship between the consumer and company.” According to the ABA, a more appropriate disclaimer would state, “The Bureau does not routinely verify the facts alleged in consumer complaints; therefore, complaint data and associated narratives may be inaccurate or incomplete. The Bureau does not endorse the opinions contained in any complaint and does not contend that any complaint is suitable as a basis for consumer reliance.”
• Establish a process for a bank to identify and block the publication of consumer complaints about matters for which the bank has no responsibility. As an example, the ABA notes that its members report that many consumers incorrectly identify a merchant dispute in a complaint against the credit card issuing bank or identify the creditor bank and the third-party debt collector or debt buyer in a complaint about the third-party’s collection practices.
• Work with industry to normalize and provide context for the data.

The ABA also renews its call for the CFPB to study “whether consumers are willing to read redacted complaint narratives (and the accompanying structured responses) and whether they can glean salient information from the publications that they would rely on to inform their personal financial decisions.” The ABA believes “this is critical, baseline information that should be established by the Bureau, which describes itself as data driven, before it proceeds with a matter of this consequence for consumers and industry.”

We think the ABA’s comments and suggestions are well-founded and hope they will receive serious consideration by the CFPB.