CFPB Publishes Complaint Narratives – What it Means for New Yorkers

Ellie Pepper July 29, 2015

On June 25, 2015, the Consumer Financial Protection Bureau (CFPB) published over 7,700 consumer complaint narratives about financial companies.  Since first making the complaints database public in 2013, CFPB has been improving access to and search capabilities for the data collected.  The ability to view consumer complaint narratives may be the most significant change in this access yet.

The CFPB began accepting complaints as soon as it opened its doors in July 2011.  Three years later, in July 2014, the CFPB announced that they would begin making narratives associated with those complaints public.  They faced stiff opposition from the lending industry.  To address opposition, CFPB Director Richard Cordray responded to industry concerns stating “By publicly voicing their complaint, consumers can stand up for themselves and others who have experienced the same problem.  There is power in their stories, and that power can be put in service to strengthen the foundation for consumers, responsible providers, and our economy as a whole.”

I have done a review of a subset of complaint narratives, specifically those that were filed in New York and were related to servicing mortgages in default.  In just three months, 44 of the complaint narratives that were submitted by New York homeowners trying to save their homes from foreclosure were published publicly.  These public narratives for NY homeowners reveal interesting, although unsurprising, trends.

First, mortgage servicers repeatedly transfer servicing from one servicer to another.  This makes it nearly impossible for homeowners to keep track of where to send their mortgage payments.  Second, servicers make repeated requests for documents they have already received from the homeowner.  Third, servicers regularly fail to notify homeowners within five days upon receiving a modification application as required by CFPB’s mortgage servicing guidelines.  For a more in depth look at the CFPB complaints database, check out USPIRG’s analysis (US Public Interst Research Group).

I commend the CFPB for moving forward with making these consumer complaint narratives public and searchable.  Those who are in the business of providing consumer finance products should be held to the highest standard.  These companies have access to resources not within the reach of most consumers.  Publishing complaint narratives is another step toward leveling the playing field for all consumers.  

Consumers can now file a complaint with the CFPB at http://www.consumerfinance.gov/complaint/ and utilize a critical tool to educate and empower themselves in the financial marketplace.