In response to the CFPB’s request for information (RFI) regarding “best practices” for normalizing the data in the Consumer Complaint Database, issued on June 30, 2015, the American Bankers Association (ABA) submitted a comment letter that argues any efforts made by the CFPB to “normalize” data in its consumer complaints database – that is, weighting it to account for differences that may distort interpretations of the raw data – would be fruitless to consumers without efforts to ensure the accuracy and integrity of complaint information.
According to the RFI, the CFPB is asking for “feedback on ways to make raw complaint data more meaningful by supplementing that data with a context more useful for consumers and other market participants.” The RFI requests responses to general questions, including:
- Is data normalization a worthwhile exercise?
- What metrics should be used to normalize the data?
- Can these metrics be reliably obtained?
- Should the Bureau seek to verify independently any normalizing metric that it might use?
In response, the ABA took the position that the CFPB’s “decision to publish on its website complaint data and select consumer narratives erodes customer privacy, impairs the confidential nature of the exchange between customer and banker, compromises the supervisory process, and introduces unreliable and misleading information into the market. Instead of fostering informed and responsible consumer choice, the Bureau has become a purveyor of at best unverified, and potentially false, information.”
Similarly, the comment letters submitted by the Consumer Bankers Association and the Mortgage Bankers Association said that the CFPB’s planned “normalization” process is destined to fail because the CFPB does not verify whether consumer complaints in the database are accurate. “The CFPB has a fundamental duty to publish accurate, reliable information. Publishing out of context, unverified data will only mislead consumers,” CBA President and CEO Richard Hunt said in a statement. “They must verify the data before they work to normalize it because only then will consumers truly benefit from the ‘complaints.’” MBA Senior Vice President of Public Policy & Industry Relations Steve O’Connor wrote, “While we strongly object to the public display of unsubstantiated complaint narratives in the database, MBA believes taking the several steps we recommend, including seeking further comment, could improve the Database. Should the CFPB develop specific options to normalize this data, we urge at minimum the issuance of a new RFI.”
The National Association of Federal Credit Unions (NAFCU) also informed the CFPB of its continued concerns that the release of unverified complaints to the public poses serious reputational risk to credit unions given the nature of viral media and the speed at which information is disseminated, and that this expansion will only compound those concerns. NAFCU Regulatory Affairs Counsel Kavitha Subramanian sent a letter to the CFPB, saying the Database undermines the ability of businesses to resolve problems. “Credit unions have a strong track record of working closely with their members to resolve any disputes or concerns … . Given the credit union industry’s acute attention to complaint resolution, NAFCU and our members support the Consumer Financial Protection Bureau’s … efforts to facilitate a dispute resolution process; however, the Database continues to have practical implications that undermine the complaint resolution process,” said Subramanian. “NAFCU and our members strongly believe that the Bureau must first address the reputation and privacy risks posed by the existing Database prior to adding additional functionality tools, such as data normalization,” Subramanian said. “Through the current system, there remain serious concerns that personal information may be inadvertently released, jeopardizing an individual’s secure financial information.”