WASHINGTON—NAFCU and CUNA Thursday sent comment letters to the CFPB sharing concerns they have with the Bureau’s proposed Consumer Complaint Database response survey.
NAFCU stated that the survey is likely to confuse efforts at complaint resolution and would weaken the effectiveness of financial institution examinations. CUNA is most worried over the legitimacy and accuracy of the survey.
“NAFCU is concerned that proposed changes to the [database] would expose credit unions to substantial reputational risk while contributing little to the marketplace of consumer reviews,” wrote ’s Andrew Morris, NAFCU regulatory affairs counsel, in a comment letter to CFPB Thursday.
The CFPB’s proposed update to its consumer complaint database would have consumers fill out a three-question survey about how companies handled complaints; the feedback would be shared with the companies through the Company Portal. The change is anticipated for early 2017.
Morris said CFPB’s proposed Company Response Survey functionally resembles existing consumer reporting mechanisms available through social media platforms. Given the availability of those platforms, the Bureau’s “reluctance to ‘verify all the facts,’ and the fact that financial institutions must abide by privacy limits whenever they publicly respond to criticism, NAFCU struggles to see what added value the survey provides,” he wrote.
Consumers usually lodge their complaints with providers before they tell the CFPB; Morris said the database would not “adequately capture information about the initial stages of complaint handling.” He added that credit unions would likely receive unfavorable survey ratings on the Bureau’s database and get no credit for earlier efforts at reconciliation.
Morris also pointed out that the survey questions are difficult to contextualize and could lead to confusion. In addition, consumer disclosures of company responses would frustrate the goals of efficient reconciliation. He also noted the potential negative impact on examinations.
“NAFCU and its members believe that formal consideration of subjective variables such as customer dissatisfaction would be counterproductive to the goals of the examination system,” he wrote. “By using survey data to inform overall risk assessment, the CFPB would transform examinations into subjective critiques that could potentially overshadow the positive aspects of a credit union’s customer service program.”
CUNA, in a letter signed by Senior Director of Advocacy and Counsel Luke Martone, urged
the CFPB to take “appropriate steps to verify the legitimacy and accuracy, to the extent possible, of a consumer’s complaint and/or compliment prior to public disclosure. Under the current system, we believe it is possible that some institutions are effectively unable to respond to consumers’ narrative description of complaints due to privacy restrictions.”
CUNA also cautioned the CFPB from relying too heavily on consumer complaint narratives, which will be permitted.
“We are somewhat surprised that the CFPB, as a data driven agency, is focusing so much on consumer narratives, which are likely to facilitate primarily anecdotal stories with little or no validation,” Martone wrote. “Furthermore, assuming some consumer responses are in fact positive, this type of public disclosure could unfairly promote institutions supervised by the CFPB, because other institutions, such as most credit unions that are examined and supervised by their prudential regulators, would not have such responses posted for public view.”
CUNA asked the CFPB to “analyze extensively” the potential benefits and costs associated with its proposed survey.