The CFPB has adopted its controversial proposal to publicly disclose consumer complaint narratives in its Consumer Complaint Database.  Its plans for disclosing the narratives are set forth in a final policy statement.   According to the Federal Register document announcing the policy statement, the CFPB will not disclose any narratives for at least 90 days after the statement’s publication in the Federal Register.  In the notice’s supplementary information, the CFPB states further that it will not disclose narratives “until sufficient time has elapsed to allow the Bureau to adequately complete and assess” various actions needed to implement the policy statement, such as modifying its website, online complaint intake form and company web portal.

Consistent with its proposal, the CFPB will not publish a complaint narrative unless the consumer has given consent by checking an opt-in form that the CFPB plans to include in the submission phase of the complaint process.  A consumer can withdraw his or her consent at any time by informing the CFPB and the narrative will be removed from the database.  (In response to a commenter’s concern that companies might require non-disclosure agreements from consumers creating an account, the CFPB states that it “would likely look disfavorably upon agreements that require a consumer to withdraw his or her consent to have a narrative published as a condition of settlement.”)

The policy statement indicates that the CFPB “intends to apply to all publicly-disclosed narratives a robust personal information scrubbing standard and methodology” to address the risk of re-identification, which is modeled after the Health Insurance Portability and Accountability Act Safe Harbor Method.  The CFPB does plan to disclose 5-digit zip codes next to narratives, except were the population in the zip code contains fewer than 20,000 people.  (In such cases, the CFPB plans to disclose the 3-digit zip code unless the 3-digit zip code population is less than 20,000.)

The CFPB’s proposal would have allowed companies to submit an unstructured narrative response to appear next to the consumer’s narrative.  In response to industry comments that legal, business and reputational concerns would limit a company’s ability to provide meaningful public-facing unstructured responses, the CFPB will provide companies within the company web portal a “set list of structured company response options” and a company will have the opportunity to recommend which option, if any, it would like included as a public-facing response.  The list is intended to relieve companies from having to assess “what level of detail will address a complaint while protecting confidential information.”  A company will not be required to provide a public-facing response, and while the CFPB states that it generally plans to adopt a company’s recommended response, it reserves discretion “to assess whether there are good-faith bases for the recommendations.”

With regard to the timing of posting a consumer narrative and a company response, the CFPB plans to disclose the narrative when the company provides its public-facing response, but not later than 60 days after the complaint is routed to the company.  (The CFPB’s complaint system gives companies 15 days to provide an initial response to a complaint and 60 days to provide a final response.)  This timing is intended to guarantee that a public-facing response, if provided within the 60 day period, will be disclosed contemporaneously with the consumer narrative.

We share industry’s disappointment with the CFPB’s action.  From the time the CFPB first announced its plan to publicly disclose complaint data, we have had concerns about disclosing unverified data.  The CFPB’s decision to disclose consumer narratives only exacerbates those concerns.

We take little solace in the CFPB’s comment in the policy statement’s supplementary information that this concern is sufficiently addressed by its disclaimer on the complaint database that “we don’t verify all the facts alleged in these complaints but we take steps to confirm a commercial relationship between the consumer and company.”  We doubt many consumers, even if they read the disclaimer, will appreciate what that means for a complaint’s validity and will continue to assume that a complaint is true because it is being published on a government website.  In other words, complaints will take on an unwarranted level of credibility by virtue of them appearing on the CFPB’s website.

The CFPB prides itself on being a data-driven agency.  Its disclosure of consumer narratives is the antithesis of being data-driven.  Instead, the CFPB will be publishing anecdotes much in the same way as an Internet gripe site.

To address industry comments that the complaint database should include positive feedback in conjunction with complaint narratives, the CFPB also issued a notice and request for information about “the potential sharing of consumer compliments about providers of consumer  financial products and services and more information about a company’s complaint handling.”  Comments on the RFI are due on or before 60 days after its publication in the Federal Register.  In the RFI, the CFPB describes two potential avenues for sharing positive feedback: by providing more information about a company’s complaint handling and by collecting and providing consumer compliments independent of the complaint process.

With regard to complaint handling, the CFPB is seeking information on potential ways it could “record, calculate, standardize, short, share, and visualize the data” associated with complaints “in ways that reveal positive company behavior.”  Among the potential metrics suggested by the CFPB are total number of complaints by product and issue and timeliness and speed of responses.  The CFPB also seeks comment on adding a consumer feedback process to its complaint system that would allow a consumer to rate a company’s handling of his or her complaint.

With regard to soliciting, collecting and sharing compliments, the CFPB asks for comment on expanding its “Tell Your Story” feature on its website to share compliments and establishing a new database to take and publish compliments.