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CFPB Reports

by Blair Rugh

The Consumer Financial Protection Bureau publishes a lot of reports. Most of them are not too interesting, but a few do have some interesting information. Recently, the CFPB published its first Monthly Complaint Report, which is a compilation and analysis of the complaints it has received since it began accepting complaints in July 2011.  Since then, it has received over 650,000 complaints, beginning with a monthly volume of 500 and increasing steadily to the present volume of over 23,000 complaints per month as more and more people became aware that there was someone to whom they could complain. If nothing else, it shows that we are a nation of complainers.

 

Not surprisingly, the highest volume of complaints per 1000 population came from Washington, D.C. From Washington, the CFPB received 577 complaints per each 1000 people in its population; over half of the people in Washington had something financial to complain about which I guess is not so surprising. I would love to know how many of those complaints came from personnel of the CFPB. For reasons I do not know, the highest percentage of complaints per population came from Delaware with 371. Next was Maryland at 333; I guess because it is next to Washington. In fourth place, at 315, was Florida. That is because it has a bunch of old people like me that have nothing better to do than complain.

 

On the other side of the coin, North Dakota, South Dakota and Wyoming led the pack with fewer than 20 complaints per 1000 persons. Obviously, the folks in those states are heartier stock than the rest of us and more inclined to accept things as they come. On the other hand, they are also probably more financially responsible than the rest of us and have fewer things to complain about.

 

The most complained about category of service was debt collection. Almost one-third of the complaints were about some category of debt collection activity. That was followed with twenty percent of the complaints about credit reporting. In third place were mortgages. Surprisingly in June, there were only 625 complaints about student loans, which are less than 3 percent of the total; that amount is down four percent from the prior month. The reason it is so surprising is that, on its web site, the CFPB has been begging people with student loan complaints to submit them.

 

The three most complained about companies were the three credit bureaus. They were followed by Bank of America, Wells Fargo, J.P. Morgan Chase and Citibank, which is not surprising because of their size.

 

The CFPB report is extremely comprehensive. It slices and dices the information it has in every conceivable way. The only thing that the CFPB did not report was the hours of bureaucratic time and expense it took to compile and publish the report.

 

The second CFPB report that has some interesting information is its summer edition of its Supervisory Highlights, which is a compilation of information from the large banks that it examines for compliance. One area of complaint is that some banks do not have a policy or procedure for mortgage loan officer identification and compensation. Regulation Z mandates that mortgage lenders have a policy so make sure that your institution does.

 

Second, some lawyers get too cute by half and include in home equity line of credit agreements a “General Waiver” whereby the consumer waives all notices or demands in connection with the delivery, acceptance performance, default or enforcement of the agreement. The CFPB says that this is deceptive as a reasonable consumer might be misled into believing he or she had waived all notices and would be less likely to assert his or her Federal statutory rights. If you think this is a stretch, I agree. Only one in a thousand consumers even read the agreement, and only one in a million would understand what the language said. But, we want to protect that one in a million. At any rate, check your HELOC agreement to see if it has a “General Waiver.” If so, have it reviewed by your attorney.

 

Finally, the CFPB found numerous software errors that caused errors to occur in consumer periodic statements, including the failure to provide statements to some customers, an omission of transactions on some statements and the double billing of fees on some occasions.  Sometimes, this is an error in the software. More frequently, it is the result of the institution failing to set the parameters accurately. An institution should carefully audit every instance where its automation solutions are providing disclosures to its customers.