* Data will identify banks but not the consumer
* Bankers oppose identifying institutions
* Argue many complaints unjustified
By Dave Clarke
WASHINGTON, June 19 (Reuters) – The new U.S. consumer
watchdog agency is launching a website on Tuesday where the
public will be able to view complaints made by credit card
customers against specific banks and other lenders.
The Consumer Financial Protection Bureau said it is
releasing the data to make the market for credit cards more
transparent and so the public, researchers and the lending
industry will have access to much of the data it receives from
consumers.
“Each and every time we hear from American consumers about
their troublesome transactions with financial products, it gives
us important insight,” CFPB Director Richard Cordray said in a
statement. “The information helps us and it should be available
to help others too.”
The banking industry, however, has fought the idea of naming
specific institutions in the public database, arguing that
anyone with a gripe, legitimate or not, can tar the reputation
of a card issuer by simply submitting a complaint to the agency.
Under the 2010 Dodd-Frank financial oversight law the CFPB
is allowed to create public consumer complaints databases. The
industry has argued that nothing in the law, however, requires
it to publicly name the institution receiving the complaint.
“Why publish the amount of complaints against a specific
company when there are many complaints that at the end of the
day are not justified,” Richard Hunt, president of the Consumer
Bankers Association, said in an interview. “There is a
significant chance of a reputational hit.”
Hunt also said there is a concern that the agency will only
release complaints related to the banks it oversees, which are
those with more than $10 billion in assets. This could make
large banks look like the bad actors in the industry, he said,
even if only a small percentage of their customers are filing
complaints.
When receiving a complaint the agency determines if the
consumer actually has a card with the bank in question and also
seeks to determine if the same customer is filing duplicate
grievances, a senior CFPB official told reporters on Monday.
No information about the consumer will be included in the
public database, the agency said.
The database will provide some information on how the lender
responded to the complaint, such as whether the customer
received any compensation from the card issuer.
The website will allow users to search the database in a
variety of ways, including by card issuer name, type of
complaint and zip code, the agency said.
When launched on Tuesday the database will at first only
contain complaints received since June 1, about 100 records. The
senior official said the plan is to add data received by the
agency before that date later this year, after the website has
been live for a few months.
The agency is considering creating similar public databases
for other types of consumer complaints about financial products
and on Tuesday it put out a request for input on what type of
products should be considered.
Also on Tuesday, the agency released a “snapshot” of some of
the consumer complaints it has received since opening its door
on July 21, 2011.
For instance, the agency said it has received approximately
45,630 complaints overall and of these 16,840 concern credit
cards. The agency receives the complaints in a variety of ways
including through its website and by phone.
The agency said the most common type of complaints on credit
cards are billing disputes.
