Are You a Five Star Complaint?

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In case you weren’t aware (and you should be), the CFPB is at it again. This time they propose to institute a system to allow consumers to rate the service they received from lenders when handling their complaints. (Complaints)

Once the complaint is closed, the consumer could rate the lender with a score of 1 to 5 (1 being the lowest). The consumer would be asked to provide a score to three questions:

1. The Company addressed all my issues;
2. I understood the Company’s response to my compliant;
3. The Company did what it said it would do with my complaint.

As you can see, these are relatively general in nature and may elicit a wide range of responses for a consumer; especially one that may not fully understand the mortgage products and process.

As it is in most cases, consumers usually only respond to such surveys when they are dissatisfied with the service received. Those who receive an acceptable outcome do not typically go back to a site to add additional information, such as requested in the new scoring system.

So, will lenders get a fair shake from the new CFPB compliant scoring system? I doubt it. As important, will it bring anything additional to light that could to be beneficial to the CFPB and/or consumers? Probably not, most respondents will be those who are not satisfied with the outcome of their complaint. The results will be unfairly skewed toward negativity; rather than for positive outcomes.

CFPB is targeting implementation in the first quarter of 2017. Maybe this will go away under the new administration. Until, and if, it does lenders may be scrutinized unfairly as a result of this new scoring system.  All industry groups oppose this plan. So, if you weren’t aware, or haven’t spoken up, now is the time to do so.

Let the CFPB know how you feel about such the program.

• Do you believe it’s a fair reflection of the industry’s handling of consumer complaints?
• Do you have an internal compliant tracking and response system?
• Do you monitor the CFPB complaint data base to see where you stand?

It’s your industry and your reputation on the line. Make sure your voice is heard.

About the Author

Michael Vitali

Michael L. Vitali – Independent Consultant to the Mortgage Industry Mike Vitali is an independent consultant to the mortgage industry on matters concerning compliance and mortgage lending. He most recently served as the Senior Vice President and Chief Compliance Officer for LoanLogics, monitoring regulatory developments and their practical implications for the mortgage lending industry. His duties included research, interpretation, and analysis of existing and proposed legislation related to the industry in support of recommendations for policy and/or procedure changes to maintain continued quality and compliance with all applicable laws, rules and regulations, investor requirements, and standard mortgage practices. In his more than 40 years in the mortgage industry, in senior level management, he has gained experience in all areas of mortgage lending, risk management, and compliance. Mike is a past President of the MBA of Greater Philadelphia, is a charter member and was the second Chairman of the MBA of Pennsylvania, and a past board member and Legislative Chair of both associations. He is a recipient of the 1998 Mortgage Banker of the Year Award from the MBA of Greater Philadelphia, and the 2003 Chairman's Award from the MBA of PA, and currently serves on several compliance related task forces for MBA.