Usually we all skim over the cover and opening letter of a report as fluff, but Mick Mulvaney in his first report as Acting Director of the Bureau, took the opportunity to lay out his plans for the agency which he feels has too much autonomy, and in the process, change the name of the agency. In the April report titled Semi-annual report of the Bureau of Consumer Financial Protection and with a new logo, right off the bat he announces “Shortly after President Trump appointed me…I made it clear that the Bureau will continue to execute the law but no longer go beyond its statutory mandate.” Not the perfunctory opening we’re used to.
In the letter he goes on to lay out his request that Congress make four changes to the law to establish accountability for the Bureau: 1) Fund the Bureau through Congressional appropriations; 2) Require legislative approval of major Bureau rules; 3) Ensure that the Director answers to the President in the exercise of executive authority; and 4) Create an independent Inspector General for the Bureau. After his testimony to congress last week it’s still too early to see what will happen, but the report goes on to lay out some interesting data from the complaint database.
The Bureau reported that the complaint volume has increased at a steady pace, rising 8.8% from 291,400 in 2016 to 317,000 for the period of October 1, 2016 through September 30, 2017.
What are people filing complaints about? Debt Collection, Credit or Consumer Reporting and Mortgages make up 67% of all complaints. The types of complaints by product are broken down as:
One major increase was in the credit or consumer reporting category. Last year, complaints in that category only made up 19% of all complaints, however there was an 8% increase in complaints on credit or consumer reporting, now totaling a little more than a quarter of all complaints (27%). The mortgage category also increased by 5% from 13% last year to 18% for the current year.
The Bureau reviews each complaint to determine if a response is needed from the company. Last year, 74% of the complaints were sent to companies for review and response. The remaining complaints were referred to other regulatory agencies (15%), found to be incomplete (4%) or are pending with the consumer (3%) or the Bureau (4%).
When a company receives a complaint, they have 15 days to respond to the consumer and the Bureau. Within those 15 days, a response must be sent that includes:
- Descriptions of steps taken or will be taken
- Communications received from the consumer
- Follow up action items
- Categorization of the response
Responses include items such as: refunds of a fee, providing mortgage foreclosure alternatives that help consumers keep their home, stopping calls from debt collections or correcting account information.
Being knowledgeable about the types of complaints and the proper process of responding to those complaints will help minimize the risk your company could face from additional scrutinization from the Bureau.
If you’d like to learn more about what regulators in the US and abroad are focused on, be sure to attend COMPLY2018, The RegTech and Compliance Conference, taking place May 16-17 in New York City. COMPLY brings together leading regulators from the Federal Trade Commission and FINRA; Tony Alexis, Former Head of Enforcement at the CFPB and representatives from several State AG's offices to discuss their agendas and best practices in compliance.
Photo: Consumer Financial Protection Bureau building in Washington, D.C. Photo by Diego M. Radzinschi/THE NATIONAL LAW JOURNAL.