In its recently issued first Consumer Response Annual Report to Congress, the CFPB analyzes the complaints it has received over the period July 21, 2011 (when it began taking credit card complaints) through December 31, 2011. The CFPB started taking mortgage complaints on December 1, 2011 and on March 1, 2012, it started taking complaints on deposit products, private student loans and other consumer loans. In the report, the CFPB describes its process for handling complaints, and notes that, as of December 1, the amount of time the CFPB gives companies to respond to complaints was increased from 10 to 15 calendar days.
According to the report, the CFPB received 13,210 complaints between July 21 and December 31, 2011, which included 9,307 credit card complaints and 2,326 mortgage complaints. 44% of those complaints were submitted via the CFPB’s website, 14.7% via telephone calls, 34.9% via referrals from other regulators, and the balance via mail, e-mail or fax. The three most common credit card complaints involved billing disputes (13.7%), identity theft/fraud/embezzlement (10.9%) or APR or interest rate (10.2%). Nearly 60% of the mortgage complaints involved making payments (servicing, payments, escrow) or problems when the consumer is unable to pay (loan modification, collection, foreclosure).
The CFPB sent 9,885 (or 75%) of the complaints it received to companies for review and response (with the other complaints deemed incomplete, sent to another regulator because they didn’t involve a product or market within the CFPB’s jurisdiction or currently handled by the CFPB, or considered to still be pending with the consumer or CFPB.) Companies responded to 88.1% of the complaints sent to them and reported closing over 55% with relief (meaning “objective, measurable, and verifiable monetary value to the consumer”), and approximately 31% without relief (meaning no monetary value to the consumer but which “may have addressed some or all of the consumer’s complaint involving non-monetary requests.”) Nearly 40% of the consumers who received responses did not dispute the reponses while approximately 13% of such consumers did register disputes (with the remaining complaints still pending with consumers as of the end of the reporting period.)
Which complaints are most likely to trigger further investigation by the CFPB? According to the report, the CFPB primarily focuses its review and investigation efforts on complaints where the consumer disputes the response or the company fails to provide a timely response. In those instances, the CFPB will look into whether the dispute justifies additional review “with regard to the company’s minimum required actions” under consumer financial protection laws or why a company did not provide a timely response. Depending on the results of its investigation, the CFPB may refer the complaint to its enforcement division for further action, something the CFPB states it has already done “in some cases.”
The CFPB’s annual report raises similar concerns to those Chris Willis wrote about in his post on the CFPB’s November 2011 interim report on credit card complaints. Like the data in the interim report, the annual report’s data doesn’t shed light on any particular regulatory or legal issues, with the CFPB continuing to question whether consumers understand the categories which they are asked to use to identify the subject of a complaint. And also like the data in the interim report, the annual report’s data seems to bear little relationship to the CFPB’s regulatory and enforcement functions. The annual report continues to show that the CFPB is passing along most complaints to financial institutions who are promptly resolving a high percentage of complaints with a low dispute rate. In other words, for the majority of complaints received, it appears the CFPB’s complaint procedure is continuing to function as an extension of in-house customer service channels. As Chris asked in his post, “Did we need a new federal consumer protection agency for this?”