MBA Urges CFPB To Improve Consumer Complaint Database

Posted by Patrick Barnard on September 01, 2015 No Comments
Categories : Residential Mortgage

The Mortgage Bankers Association (MBA) is urging the Consumer Financial Protection Bureau (CFPB) to make multiple improvements to its consumer complaint database so that the information presented to the public is more accurate.

In a recent letter to the CFPB, the MBA requests that the bureau make it more clear to consumers when they land on the complaints home page that the public-facing complaint narratives are not reviewed and that most do not require action.

In addition, the MBA is asking the CFPB to establish procedures for removing complaints that have not required action, as well as complaints that are old or unresolved.

The MBA is also asking the CFPB to separate servicing and origination complaints, which are currently co-mingled on the website. This can create confusion for consumers, who get to choose their lender but not their servicer. What's more, many consumers confuse their servicer and their lender.

Perhaps most importantly, the CFPB wants the bureau to disclose its formula for ‘normalizing’ the data so it is more accurate. As such, the MBA is asking the bureau to issue a new request for information (RFI) regarding the database.

Information to be added, as per the MBA's letter, includes ratios of complaints and resolutions requiring action for all lenders; lending and servicing volume in relation to the number of complaints; and information about the context for the complaints, for example a time frame describing the borrower's last payment date.

‘While we strongly object to the public display of unsubstantiated complaint narratives in the database, [the] MBA believes taking the several steps we recommend, including seeking further comment, could improve the database,’ Steve O'Connor, senior vice president public policy and industry relations for the MBA, writes in the letter. ‘Should the CFPB develop specific options to normalize this data, we urge at minimum the issuance of a new RFI.’Â

The MBA makes it clear that it is not opposed to the CFPB's efforts in assisting consumers in navigating the mortgage process.

At the same time, the MBA makes it clear that lenders and servicers alike have made great strides in improving their customer service since the economic meltdown of 2008.

‘Companies are in constant communication with their customers, through multiple channels, to improve the customer experience,’ O'Connor writes. ‘Additionally, they have built reporting, analytics, and other platforms that enable them to enhance customer engagement and expeditiously address any complaints.’Â

The MBA repeats that its main beef with the database is the ‘public display of unsubstantiated narratives.’

‘In MBA's view, because more than 80 percent of complaints do not require action beyond an explanation, posting these unsubstantiated complaint narratives will only mislead the consumers the CFPB is charged with protecting,’ O'Connor writes. ‘We therefore urge that complaints be verified before narratives are posted. At the very least, the CFPB should establish procedures to take down complaints not requiring action.’Â

The MBA points out that consumers have ample opportunity to comment and rank lenders through numerous other Web channels including Google, Yelp, Facebook, Angie's List and the Better Business Bureau.

‘Many of these sites invite consumers' to rank their experiences in a nonbiased manner, rather than in the context of a 'consumer complaint database,'’ the letter said. ‘As such, their rankings are likely to be more valuable as a consumer decision tool than rankings based almost exclusively on complaints. Considering the reach of these sites, it is unnecessary as well as unwise to also employ the imprimatur of the United States government in this work.’

The problem with posting consumer complaints on a government agency's website – a move which is unprecedented – is that it can have the unintended effect of ‘validating’ the complaints in consumer's eyes.

Back in April, when the CFPB was still mulling the idea of making consumer complaint narratives public on its website, MortgageOrb sent the following questions to the CFPB, which, despite repeated attempts, have thus far gone unanswered:

1. Will the complaint narratives be made public retroactively or will only ‘new’ complaints be published starting on the date the public-facing narratives are launched?

2. Will the entirety the public-facing complaint narratives be searchable by keyword?

3. Will the CFPB remove complaints from the public-facing database that were resolved without action being taken, found to be unsubstantiated or which resulted from a misunderstanding?

4. Is it legal for a mortgage lender or servicer to ask a consumer to remove a complaint from the public-facing database after it has been resolved?

5. What does the bureau mean when it says it does not ‘verify all the facts alleged in the complaints?’ Does that mean certain allegations are not verified but will nevertheless be shared publicly?

6. Why does the CFPB feel that unverified complaints are ‘valuable information’ to consumers?

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