CFPB Finalizes Policy on Consumer Complaint Narratives; Changes Company Response Process

The Consumer Financial Protection Bureau (CFPB) announced today that it has finalized its publication rules for consumer narratives in complaints. The move will allow the CFPB to publish the language provided by consumers explaining why they are logging the complaint. The final policy includes a significant change to the way companies can respond to consumer narratives.

The CFPB is also publishing a Request for Information seeking public input on ways to highlight positive consumer experiences, such as by receiving consumer compliments about financial services businesses.

“Consumer narratives shed light on the full consumer perspective behind a complaint,” said CFPB Director Richard Cordray. “Narratives humanize the problems consumers face in the marketplace. Today’s policy will serve to empower consumers by helping them make informed decisions and helping track trends in the consumer financial market.”

When consumers submit a complaint to the CFPB, they fill in information such as who they are, who the complaint is against, when it occurred, and what issues were relevant based on a preset list of options. They are also given a text box to describe what happened and can attach documents to the complaint. When the Bureau forwards the complaint to the company, the narrative text and documents (if any) are provided.

But that narrative text does not currently appear in the CFPB’s public complaints database, nor is it published anywhere else. In July 2014, the CFPB proposed a policy that would allow consumers to publicly share their stories when they submit complaints to the Bureau.

There was strong opposition to the proposal in the banking and ARM industries. The American Bankers Association, ACA International, NARCA and many other groups filed comments on the proposal. The Financial Services Roundtable also launched a PR campaign against the proposal. But the plan will move forward, with some changes from the original proposal.

Starting today, when consumers submit a complaint to the CFPB, they will have the option to check a box and opt-in to sharing their narrative. In order for companies to learn about this new system, the Bureau will not publish any consented-to narrative for at least 90 days after the policy’s publication in the Federal Register, most likely Friday March 20. (Read the final statement submitted for publication)

In its announcement today, the CFPB noted that it is concerned with both consumer privacy and ensuring companies named in complaints have an opportunity to publicly respond. The CFPB said that the policy establishes a number of important safeguards for a clear, fair, and transparent process, including:

• Consumers must opt-in to share their story
• Personal information will be removed from narratives by CFPB staff – the CFPB will use a thorough process to ensure complaints are scrubbed of information such as names, telephone numbers, account numbers, Social Security numbers, and other direct identifiers.
• Complaints must meet certain criteria to qualify for narrative publication – including that the complaint is submitted through the CFPB website, that the complaint is not a duplicate submission, and that the consumer has a confirmed relationship with the financial institution.
• Companies can choose a response to publish – Companies will be given the option to select from a set list of structured response options as a public-facing response to address the consumer complaints. Companies will be under no obligation to offer a public response, and they have 180 days after the consumer complaint is routed to them to select the optional, public response. Companies will have the option to address all consumer complaints submitted, not just those where a consumer consented to publication.

The last bullet point represents a significant change from the original proposal.

The Bureau’s proposal has always allowed for a company response to consumer narratives. Originally, the CFPB thought that the company responses would be submitted in a manner similar to that of consumers: using a text box to write a response, given that consumer information was not included.

But the CFPB noted that it received many comments from trade groups and companies concerned that an unstructured open field might expose responding companies to liability under various laws, including Gramm-Leach-Bliley, the FCRA, and even the FDCPA. Commenters argued that, under the Bureau’s proposal to permit voluntary narrative company responses, they might not be able to provide any public-facing response at all due to legal, business, and reputational considerations, thus undercutting the CFPB’s desire to provide companies an opportunity to respond.

So the Bureau will provide companies with a finite list of optional structured responses from which company responders can choose. Within the secure web portal companies use to respond to complaints, the CFPB intends to add a set list of responses, giving companies the ability to recommend a public-facing response addressing the substance of the consumer’s complaint. Companies will be under no obligation to respond with their own narrative.

Also in a nod to comments received from the financial services industry, the CFPB today is issuing a Notice and Request for Information (RFI) seeking input from the public on the potential collection and sharing of information about consumers’ positive interactions with financial service providers.

Broadly speaking, the Bureau sees two options for sharing positive consumer feedback about companies. One option is to provide more information about a company’s complaint handling such as highlighting the quality of responses to consumers. The second option is to collect and provide consumer compliments – independent of the complaint process. Today’s RFI seeks input on these options and welcomes other ideas.