CFPB will take consumer complaints public

Consumers will be able to share their gripes with financial institutions publicly on a government database, thanks to a decision from the Consumer Financial Protection Bureau.

The watchdog agency announced Thursday that it would allow consumers that submit a complaint to the CFPB and make that complaint public on the agency’s website.

The decision is a big win for consumer advocates that pushed for such an approach and a loss for the financial industry that hotly contested the notion.

{mosads}The regulator argued that publicizing such “consumer narratives” gives more perspective to specific complaints and humanizes problems they face. Of course, there is also an unsaid public shaming element to making complaints about specific banks and other institutions public.

“Today’s policy will serve to empower consumers by helping them make informed decisions and helping track trends in the consumer financial market,” CFPB Director Richard Cordray said in a statement.

But the financial industry has strongly pushed back against this idea, arguing there are better ways to provide the public with information without publicizing specific complaints. The industry has aired concerns with whether the complaints would even be accurate. And while banks would have the ability to respond to specific complaints, identifying information is stripped from the public gripes, which the industry says would make it extremely difficult to adequately respond to a particular concern.

The Financial Services Roundtable, which represents some of the nation’s largest banks, even went so far as to launch a public campaign challenging the idea.

“Today’s action does not reflect the principles of accountability, transparency, and data-driven decision making which the Bureau professes guides its work.  This agency can do better,” said Richard Hunt, president and CEO of the Consumer Bankers Association Thursday.

The bureau has been collecting a host of complaints from consumers about financial products since it opened its doors in 2011, covering a range of services like mortgages, credit cards, and payday loans. But last summer, it began looking at releasing specific complaints from consumers along with other data it publicly releases.

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