On June 9, Representative Matt Salmon (R-AZ) introduced legislation to impose new requirements on how the Consumer Financial Protection Bureau makes consumer complaints public in the Consumer Complaint Database. According to Salmon, the Consumer Financial Protection Bureau ("CFPB") Data Accountability Act "would improve the current database by requiring the CFPB to verify the facts of each complaint and present this information in an aggregated format so that consumers have better access to CFPB-collected data and can make better decisions about their financial futures."
The CFPB created the public complaint database in July 2011 to provide consumers with information about the experiences of other individuals, including consumer narratives, with participants in the consumer finance industry, including debt buyers and collectors. As of March 1, 2015, the CFPB has handled more than 558,800 complaints.
As acknowledged by the CFPB on its database website, it does not "verify all the facts alleged in these complaints" by consumers. Instead, it only "takes steps to confirm a commercial relationship between the consumer and the company." However, the proposed bill would change this, requiring the CFPB to "verify any consumer complaint information . . . where the complaint alleges a violation of a law, regulation, or contractual agreement between a consumer and a covered person who offered or provided the consumer financial product or service to the consumer."
The legislation also imposes requirements for what kind of data can be shared with the public, mandating "the CFPB only make such information available to the public on the website in an aggregated format and after taking steps to ensure that proprietary, personal, or confidential consumer information is not made public on such website."
Currently, the CFPB shares "[t]he type of product the consumer identified in the complaint." The bill, though, will only allow the CFPB to post on the website complaint information about a specific consumer financial product or service if "such information [accompanies] statistics on how many consumer complaints the CFPB receives with respect to the particular consumer financial product or service compared to the total number of consumers making use of such consumer financial product or service."
This new legislation is an effort by Salmon to improve the integrity of data that many industry participants have been calling into question for some time. The proposed legislation prioritizes accuracy in the verification of data and confidentiality in the aggregated format of shared data. Now that it has been referred to the House Committee on Financial Services, we will follow its progress and continue providing updates on Congressional activity regarding the CFPB.
The Troutman Sanders' Consumer Financial Services Law Monitor blog offers timely updates regarding the financial services industry to inform you of recent changes in the law, upcoming regulatory deadlines and significant judicial opinions that may impact your business. To view the blog, click here
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