FOR IMMEDIATE RELEASE
September 22, 2014
Inaccurate information will not be helpful to consumers
Washington, DC— The Financial Services Roundtable (FSR) sent a letter to the Consumer Financial Protection Bureau (CFPB) today urging CFPB Director Richard Cordray to reconsider its proposal to publish consumer complaints narratives.
“Our members are committed to the financial success of our customers and we encourage them to voice their opinions and share their concerns with us, others, and the CFPB,” said Anne Wallace, Senior Director of Consumer Financial Services. “However, viewing often inaccurate information will not advance the shared goal of helping consumers make more informed and better choices.”
A copy of FSR’s letter to the CFPB can be found here: http://bit.ly/Zbw7B6
For more information, contact Alison Hawkins at 202-589-2427 or at Alison.Hawkins@fsroundtable.org
The Financial Services Roundtable represents the largest integrated financial services companies providing banking, insurance, payment and investment products and services to the American consumer. Member companies participate through the Chief Executive Officer and other senior executives nominated by the CEO. FSR member companies provide fuel for America’s economic engine, accounting for $92.7 trillion in managed assets, $1.2 trillion in revenue, and 2.3 million jobs. Learn more at FSRoundtable.org.
The Consumer Financial Protection Bureau was designed to protect American consumers. But the Bureau is about to launch a complaint system that will give consumers misguided and even false information when they’re making decisions about financial services companies.
• Authorities at the Consumer Financial Protection Bureau (CFPB) wants to begin posting anonymous, unverified complaints it collects about financial services companies onto a government website.
• The complaints may not be valid or even true, but they’ll still be publicly showcased, which could give consumers false information.
• Personal information, like account numbers and last names, will be stripped from the complaints, making it impossible for anyone to tell if the complaint is true or accurate.
What’s the problem?
• The complaints will be posted publicly, but the businesses named in the complaint won’t be able to submit an explanation or a status update on the issue, even if the complaint has been fully resolved.
• This will only give consumers half of the facts, painting an inaccurate or false version of the story. That could leave them unable to make accurate decisions about financial services businesses.
Where is the impact?
• Bureaucrats will post the complaints on a government website. This will give consumers the impression that the complaints are endorsed by the federal government.
• It will also suggest that the financial institutions named in the complaints haven’t moved to resolve the problem, as only one side of the story – the complaint – will be available.
• The financial services industry currently employs nearly 6 million Americans, more than the populations of Los Angeles and Houston combined.
• The financial markets play a significant role in keeping the American economy running, making up 7.9 percent of the U.S. GDP in 2012 – or about $1.4 trillion.
When will it happen?
• The CFPB has fast tracked the start date of this project to September 22, leaving businesses, experts and the American public no substantial time to weigh in on this important, critical issue.
• Many of the key details and questions about how the system will work still haven’t been answered.
• Government agencies are typically required to allot several months to collect and consider opinions from hundreds, if not thousands of sources before finalizing a regulatory decision.
• The CFPB appears to be bystepping the system of checks and balances that helps keep government bodies accountable.
Why is this happening?
• The CFPB was created to advocate on behalf of consumers, but this complaint collection plan does just the opposite.
• Rather than making the financial services industry easier for consumers to navigate and understand, consumers will be given only one side of the story.
• These rumors could cause consumers to seek third party, less regulated financial services options that are outside the safety net of the government regulated industry.
What’s wrong with collecting complaints?
• The CFPB’s 2013 annual report shows that its current complaint collection system is nowhere near foolproof.
• Nearly 70% of all complaints filed in 2013 were closed with a simple explanation.
The big question:
• If the CFPB’s mission is to help consumers, why aren’t they working to give them all of the facts? And more importantly, why would they actively hide half of the story?
The financial services industry remains committed to a strong, secure financial system and to working with the federal government and lawmakers to ensure America’s economy is secure. However, the CFPB’s proposal is bad news for the consumers they purport to help.
We urge Director Richard Cordray to reconsider this proposal.