On June 28, the Consumer Financial Protection Bureau released its Monthly Complaint Report, which aims to provide “a high-level snapshot of trends in consumer complaints” concerning products such as auto loans, installment loans, and title loans. The CFPB claims that since it began collecting such complaints in July 2011, it has handled a total of 906,400 complaints, of which approximately 38,500 relate to consumer loans (approximately 7,700 annually).
The majority of consumer loan complaints to the CFPB relate to vehicle loans (52%), with installment loans coming in second (31%). Almost half (43%) of consumer complaints concerned consumers’ struggles to manage loans, including issues with payment processing and vehicle repossessions. To help combat these issues, the CFPB hopes that its new Know Before You Owe initiative will help educate consumers in shopping for automotive loans.
The CFPB’s report also documented trends within its collection of complaints. The report uses a three-month rolling average, comparing the current three-month period with the same period in the previous year in order to consider monthly and seasonal fluctuations. 40 of the 50 states showed an uptick in complaints made to the CFPB during the period March through May 2016 as compared with March through May 2015. Consumer loans as a whole showed a 27% increase over the three-month period (1,098 complaints) as compared with the same period last year (683 complaints), whereas payday loans showed a 15% decrease.
These published complaints and trends should be considered by companies offering these types of products to determine if their practices or policies can be improved or modified along business lines to avoid unwanted attention from the CFPB and/or plaintiffs’ lawyers.
Troutman Sanders LLP has extensive experience representing automotive and other consumer lenders, and will continue to monitor CFPB and other regulatory activity in this area.