The CFPB has issued its August 2016 complaint report which highlights complaints about bank accounts or services and complaints from consumers in Ohio and the Columbus metro area. The CFPB began taking bank account or service complaints on March 1, 2012.
As noted below, the report indicates that consumers commonly complain about the use of consumer and credit reporting data for account screening. In February 2016, the CFPB held a field hearing on checking account access. In conjunction with the hearing, the CFPB issued a compliance bulletin “warning banks and credit unions that failure to meet accuracy obligations when they report negative account histories to credit reporting companies could result in Bureau action.”
General findings include the following:
- As of August 1, 2016, the CFPB handled approximately 954,400 complaints nationally, including approximately 24,000 complaints in July 2016. Debt collection continued to be the most-complained-about financial product or service in July 2016, representing about 27 percent of complaints submitted. Debt collection complaints, together with complaints about credit reporting and mortgages, collectively represented about 66 percent of the complaints submitted in June 2016.
- Complaints about student loans showed the greatest percentage increase based on a three-month average, increasing about 64 percent from the same time last year (May to July 2015 compared with May to July 2016). In February 2016, the CFPB began accepting complaints about federal student loans. Previously, such complaints were directed to the Department of Education. As we noted in blog posts about prior complaint reports issued since April 2016, rather than reflecting an increase in the number of borrowers making student loan complaints, the increase most likely reflects the change in where such complaints are sent.
- Payday loan complaints showed the greatest percentage decrease based on a three-month average, decreasing about 19 percent from the same time last year (May to July 2015 compared with May to July 2016). Complaints during those periods decreased from 451 complaints in 2015 to 367 complaints in 2016. In the complaint reports for March through July 2016, payday loan complaints also showed the greatest percentage decrease based on a three-month average.
- Alabama, Wyoming, and Colorado experienced the greatest complaint volume increases from the same time last year (May to July 2015 compared with May to July 2016) with increases of, respectively, 29, 24, and 20 percent.
- Maine, Delaware, and Hawaii experienced the greatest complaint volume decreases from the same time last year (May to July 2015 compared with May to July 2016) with decreases of, respectively, 30, 23, and 22 percent.
Findings regarding bank account or service complaints include the following:
- The CFPB has handled approximately 94,200 bank account or service complaints, representing about 10 percent of total complaints.
- Checking accounts are the type of bank account or service product that consumers complain about most, representing 64 percent of complaints in this category. The most-complained-about issues involved problems with account management, deposits and withdrawals.
- Complaints about the use of consumer and credit reporting data for account screening are “increasingly common,” with consumers frequently mentioning that that they learned for the first time of negative information when they attempted to open a new deposit account.
- Complaints related to overdrafts “remain common,” including complaints about transaction ordering. Consumers also complained about overdrafts that took place because of confusion about the availability of funds they had deposited or were attempting to deposit. Consumers “regularly complain” about the size of overdraft fees when making small dollar purchases and are “often frustrated” by bank check holding policies, with “a number of these complaints” involving mobile deposit applications. (In its Spring 2016 rulemaking agenda, the CFPB stated that it “is continuing to engage in additional research and has begun consumer testing initiatives related to the [overdraft] opt-in process.”)
- Complaints about promotional offers for opening accounts “were the focus of a number of complaints,” with the complaints sometimes involving the consumer’s eligibility for the offer or whether the consumer met the required terms for an offer.
- Consumers “frequently complain” about error resolution procedures, including timelines for investigation and provisional credit for disputed transactions.
Findings regarding complaints from Ohio consumers include the following:
- As of August 1, 2016, approximately 29,400 complaints were submitted by Ohio consumers of which approximately 22 percent (about 6,5000) were from Columbus consumers.
- Debt collection was the most-complained-about product, representing 30 percent of the complaints submitted by Ohio consumers and 27 percent of complaints submitted by consumers nationally.
- The percentage of mortgage complaints submitted by Ohio consumers, 22 percent, was lower than the 25 percent national average.
- Average monthly complaints received from Ohio consumers increased 10 percent from 2014 to 2015, similar to the increase of 8 percent nationally.