• CFPB Files First Consumer Response Annual Report
  • April 23, 2012 | Authors: David N. Anthony; Virginia Bell Flynn; John C. Lynch; Alan D. Wingfield
  • Law Firms: Troutman Sanders LLP - Richmond Office ; Troutman Sanders LLP - Washington Office ; Troutman Sanders LLP - Richmond Office
  • Body text:

    On April 6, 2012, the Consumer Financial Protection Bureau (CFPB) released its Annual Report on Consumer Complaints (the Report). The CFPB began accepting consumer complaints about credit cards on July 21, 2011, mortgage complaints on December 1, 2011, and complaints about bank products and services, private student loans, and other consumer loans on March 1, 2012. The CFPB anticipates accepting complaints about non-depository institutions by the end of 2012.

    Results

    Between July 21 and December 31, 2011, the CFPB received 13,210 consumer complaints, including 9,307 credit card complaints and 2,326 mortgage complaints. Over 30% of the complaints came from referrals from other regulators.

    I. Credit Card Complaints

    Of the 9,307 consumer complaints received, 13.1% of the complaints were about billing disputes, 10.9% about identity theft, 10.2% about interest rates, and 4.1% dealt with collection practices.

    II. Mortgage Complaints

    Of the 2,326 mortgage complaints, 38.2% were about consumers’ problems with ability to pay, 21.8% were about making payments, and 10.1% about applying for a loan. The CFPB noted that it appears that consumers are driven by “a desire to seek agreement with their companies on foreclosure alternatives.”

    III. Responses by Companies

    Of the 13,000 consumer complaints received by the CFPB, financial institutions responded to more than 88% of them. These companies were then asked to inform the CFPB of the results of these complaints'. 46.7% percent of the complaints were closed without relief, 30.3% are still being reviewed, 18.6% were closed with relief, and companies provided administrative responses to 4.3% of the complaints. Relief, as defined by the CFPB, is “objective, measurable, and verifiable monetary value to the consumer as a direct result of the steps taken or that will be taken in response to the complaint.”

    IV. Consumers’ Review of Companies’ Responses

    Nearly 40% of consumers did not dispute the responses provided. Approximately 13% have disputed the responses.

    Nuts and Bolts

    From the beginning the CFPB has placed a heavy emphasis on consumer complaints. The CFPB has described complaints as a “red flag indicating that examiners should conduct a detailed review of the relevant practice.” The CFPB developed consumer credit portals to make it easier for consumers to file complaints. The CFPB has made clear that these portals will be expanded by the end of 2012 into other consumer financial products and services, including debt collection and student loans. The speed and quality of responses to consumer complaints are and will remain important aspects of dealing with the CFPB.