CFPB Complaint Narratives: Lenders Weigh Public Responses

When it comes to the Consumer Financial Protection Bureau’s consumer complaint narratives, silence may be golden.

Despite opposition, the regulatory agency went live in late June with an expanded complaint portal ― one that allows consumers to share their stories when they submit complaints to the bureau.

The CFPB explained: “Consumer narratives provide a firsthand account of the consumer’s experience. The narratives provide context to complaints, are easily searchable, and help spotlight specific trends. The narratives can also help consumers to make more informed decisions, as well as encourage companies to improve the overall quality of their products and services and more vigorously compete over good customer service.”

Consumers may write hundreds of words in their complaint narratives, but lenders that respond must choose one of nine canned responses prescribed by the CFPB.

That scenario presents an obvious dilemma, said Dan Earles, national manager of enterprise compliance at Toyota Financial Services, during the recent Auto Finance Risk & Compliance Summit. The issue is, if the structured responses don’t allow you to properly respond publicly to all complaints, should you respond publicly to any complaints?

Here’s an example. A 151-word complaint filed April 2 calls out certain managers for being “very rude and unhelpful,” “horrible,” and “argumentative.” The consumer also laments the lender’s inability to set payment arrangements, or secure payment history. In turn, the company’s response is limited to: “Company disputes the facts presented in the complaint.”

In another example, a March 24 complaint details a customer’s experience taking out a loan. The consumer describes his history with the bank, the loan preapproval process, his experience at the dealership, and the ensuing problems he experienced ― in all, a 711-word account. The company’s response: “Company believes it acted appropriately as authorized by contract or law.”

Richard Hunt, president of the Consumer Bankers Association, noted in a recent statement that most lenders would choose to speak with customers in confidence rather than respond publicly. So far, Hunt’s prediction is panning out. Lenders are primarily opting for non-public responses.

In an analysis of the narratives filed to the CFPB site between March 18,when the narratives were first accepted, and June 30, here are some stats:

• A total of 284 narratives were filed related to vehicle loans and leases.
• Of those complaints, 125 had public company responses attached. (Companies have up to 180 days to add a public response.)
• Of the responses, 54% chose the “Company chooses not to provide a public response” option.
• Another 29% selected the option that indicates that the company “believes it acted appropriately as authorized by contract or law.”
• The remaining response categories were each chosen five or fewer times.