After years of retooling, investing, and stressing over the regulatory environment following passage of the Dodd Frank Act in 2010, an analysis of the Consumer Financial Protection Bureau’s complaint database is showing signs of stabilization.
Yes, the overall number of complaints submitted to the bureau has risen — 7,185 last year, up from 5,921 in 2015 — but some of the largest lenders are experiencing a slowdown in the rate of increase.
Santander Consumer USA and Ally Financial Inc. have topped the No. 1 and 2 spots, respectively, on the list of most complaints since the database’s inception — and this year is no different. However, both experienced increases at a slower rate than they ever have before.
Although the number of complaints industry wide increased 21%, Ally registered 655 complaints for an 11% increase compared to the previous year, while Santander recorded 755 complaints for an increase of 10% — both of which were below the overall industry rate.
On the other hand, Wells Fargo Dealer Services’ position remained unchanged at No. 3 in most complaints, yet it saw a 31% increase compared to the year prior totaling 471 complaints.
“We take feedback very seriously no matter how it comes to us – whether through a branch, over the phone, online or from a third party agency like the CFPB,” a Wells Fargo spokeswoman told Auto Finance News in a statement. “Regardless of how the feedback comes to us, we value it, take it seriously and work with our customers to find solutions that meet their needs and individual circumstances.”
Other lenders even managed to decrease the overall number of complaints including FifthThird Financial Corp., Consumer Portfolio Services, and DriveTime Automotive Group Inc. — which decreased its total number of complaints to 68, for the largest decline of 46%.
“The regulatory environment certainly has become far more stabilized than it has been over the last eight years,” Charles Bradley, chief executive of Consumer Portfolio Services, said on the company’s latest earnings call. “If anything, [regulation] really hasn’t improved, but as I’ve said in the past, I’m not really looking for improvements, I’m looking for stability,and what we should expect. And I think we are getting that. So, at some level we would like to check off the regulatory environment as a problem for our industry.”
Another way to measure this stability is to look at the overall decrease in complaints per $1 billion in a company’s portfolio. Naturally, companies that fund more loans are inclined to have more complaints overall, which is why AFN compares the number of complaints to the size of the lender’s portfolio.
For example, Toyota Financial Services — which had the fourth most complaints overall — experienced an 84% increase in complaints for a total of 285. However, when outstandings are taken into account the company comes in at No. 21 for most complaints per $1 billion outstanding.
Several companies saw a drop in complaints per $1 billion outstanding in 2016 including Consumer Portfolio Services, DriveTime, and Santander, while others saw increases including Westlake Financial Services, Credit Acceptance Corp., and Exeter Finance Corp.
Overall, the average number complaints per $1 billion among the top 25 lenders with the most complaints overall came down slightly to 12.04 from 12.77 the year prior.Like This Post