The CFPB announced today they will offer consumers the option to publish the full text of complaints made against lenders, after scrubbing their non-public, personal information (CFPB Announcement).
The CFPB believes that by publishing the complete complaint, lenders will be encouraged to improve the overall quality of their service and be in a position to compete based on their good customer service. I guess a lender could advertise the fact that they have a low complaint rate on the CFPB site.
However, they can do that now, without the need to expose all lenders to the potential of misinformation being published based on a consumer’s lack of understanding or a failure to qualify for a loan. Think about it. Could a lender reply to a consumer’s complaint about unfair treatment by responding that the consumer has extremely poor credit, failed to pay child support on time, with two outstanding judgements? I doubt it.
CFPB opened this process up for comment in July 2014. As expected, most, if not all lenders and industry trade groups opposed it. On the other hand, most if not all, consumer groups think it’s great.
The real problem lies in the general public becoming judge and jury in these instances. All too often today, in our online society, the rules of fair play and “innocent until proven guilty” are intentionally ignored or just cast aside, in most cases without all the facts. This presents just one more opportunity to ignore the basic premise of our laws. This is especially true when the mortgage lenders are already under attack for their so-called predatory lending tactics which led to the crash of 2008. Right or wrong, that is what the public perceives to be true. This website may make it tougher to change that perception.
It’s not all one-sided. Lenders will be given the opportunity to reply, and when doing so, to choose from a CFPB set list of structured responses. Hopefully, they will find one that adequately explains their position. We’ll see.
This is not to say that every complaint is unjustified, or that lenders do no wrong. Let’s face it, we all know there are some bad actors out there. But, CFPB already has plenty of other weapons in their arsenal to go after those with too many justified complaints under the current system.
Oh, by the way, today CFPB also put out a Notice and Request for Information asking for input about the potential to collect positive feedback about lenders from consumers. Their timing seems a little ironic. This offers two options for sharing positive lender feedback (CFPB RFI). Take a look and comment if you think it’s worth it.
Do you agree with CFPB’s decision to publish the full consumer complaint? How do you think this may effect lending? Will lenders be a little more hesitant?
All the more reason to ensure you have a well-trained staff communicating with your applicants during the loan application, approval and closing process, as well as, a documented system to promptly handle and respond to consumer complaints.
Poor service, misunderstandings, or miscommunication may end up with your company being found guilty by the court of public opinion.