The CFPB has issued its June 2016 complaint report which highlights complaints about consumer loans and complaints from consumers in Arkansas and the Little Rock metro area. The CFPB began taking consumer loan complaints in March 2012. The consumer loan category in the CFPB’s consumer complaint database includes complaints about auto loans and leases, installment loans, personal lines of credit, title loans, and pawn loans. In addition, in March 2016, the CFPB began taking complaints about marketplace lending and added loans obtained from marketplace lenders to the consumer loan category. The report does not specifically identify any complaints as involving marketplace lending. Unlike prior monthly complaint reports, the June 2016 report includes a “Sub Product spotlight” section that highlights auto lending.
General findings include the following:
- As of June 1, 2016, the CFPB handled approximately 906,400 complaints nationally, including approximately 23,800 complaints in May 2016. Debt collection continued to be the most-complained-about financial product or service in May 2016, representing about 29 percent of complaints submitted. Debt collection complaints, together with complaints about credit reporting and mortgages, collectively represented about 68 percent of the complaints submitted in May 2016.
- Complaints about student loans showed the greatest percentage increase based on a three-month average, increasing about 61 percent from the same time last year (March to May 2015 compared with March to May 2016). As we noted in our blog posts about the April and May 2016 complaint reports, rather than reflecting an increase in the number of borrowers making student loan complaints, the increase most likely reflects that in February 2016, the CFPB began accepting complaints about federal student loans. Previously, such complaints were directed to the Department of Education.
- Payday loan complaints showed the greatest percentage decrease based on a three-month average, decreasing about 15 percent from the same time last year (March to May 2015 compared with March to May 2016). Complaints during those periods decreased from 479 complaints in 2015 to 405 complaints in 2016. In the March, April, and May 2016 complaint reports, payday loan complaints also showed the greatest percentage decrease based on a three-month average.
- New Mexico, Iowa, and Minnesota experienced the greatest complaint volume increases from the same time last year (March to May 2015 compared with March to May 2016) with increases of, respectively, 38, 33, and 27 percent.
- Hawaii, Vermont, and Alabama experienced the greatest complaint volume decreases from the same time last year (March to May 2015 compared with March to May 2016) with decreases of, respectively, 32, 23, and 9 percent.
Findings regarding consumer loan complaints generally include the following:
- The CFPB has handled approximately 38,500 consumer loan complaints, representing about 4 percent of total complaints. Consumer loan is the sixth most-complained-about product or service.
- The most-complained-about issue involved managing the loan, lease or line of credit. Other complaint issues included problems arising when the consumer was unable to pay, such as issues relating to debt collection, bankruptcy, and default.
Findings regarding auto lending complaints (which include complaints about auto loans and leases and title loans) include the following:
- As of June 1, 2016, the CFPB has handled approximately 23,000 auto lending complaints, representing 60 percent of consumer loan complaints.
- Issues about which consumers complained included payment processing issues, a lack of understanding as to why account balances were not decreasing after making a large number of payments, unanticipated deficiency balances when cars were voluntarily surrendered due to an inability to make payments, lack of notice for repossessions, misleading advertising by “Buy Here Pay Here” dealers regarding credit checks, and the amount of wear and tear fees charged upon lease termination.
Findings regarding complaints from Arkansas consumers include the following:
- As of June 1, 2016, approximately 4,200 complaints were submitted by Arkansas consumers of which approximately 38 percent(1,600) were from consumers in the Little Rock metro area.
- Debt collection was the most-complained-about product, representing 29 percent of the complaints submitted by Arkansas consumers and 27 percent of complaints submitted by consumers nationally.
- The percentage of mortgage complaints submitted by Arkansas consumers was lower than the national average.