Since the day it officially opened its doors for business (July 21), the CFPB has been taking credit card complaints on its website and via calls to a toll-free number. Now it has issued a proposed policy statement to address its plans for publicly disclosing credit card complaint data through a database and in published periodic reports. Comments are due by January 30, 2012.
The Dodd-Frank Act makes it the CFPB’s objective to ensure that “consumers are provided with timely and understandable information to make responsible decisions about financial transactions” and credit card markets operate “transparently and efficiently.” The CFPB thinks making the complaint data public will serve that objective because it expects the data to be mined “for trends and patterns” by “academics and groups dedicated to empowering consumers in making well-informed decisions.”
The database would not include any confidential personal information such as the consumer’s name, address or card number. However, the disclosed data would include the issuer’s name as well as the complaint subject, the consumer’s zip code, the date of the complaint and whether or how the issuer responded. The policy statement contemplates that an issuer will have at least one month after a complaint is submitted to establish that it did not issue the card in question before the complaint data is updated to the database. Due to perceived privacy risks, the database would not initially include narrative data provided by consumers, such as a description of “what happened” or what would be a “fair resolution.”
Periodic reports may contain an analysis of patterns or trends identified in the complaint data. The types of data aggregations published in the reports will depend on what conclusions the CFPB thinks it can fairly draw from the data for particular reporting periods.
The CFPB’s own discussion of its proposal recognizes some of the potential pitfalls in drawing conclusions from the data. Most importantly, we hope the CFPB will be mindful that its complaint data is not empirical data and will not attempt to use it as a basis for future rulemaking. (In his recent post on the CFPB’s interim report on credit card complaints, my colleague Chris Willis discussed some of the risks created by the CFPB’s focus on complaints.)