Formed in 2011 with the passage of the Dodd-Frank financial reform act, the Consumer Financial Protection Bureau aims to keep citizens safe from unfair or deceptive practices by businesses. One of the ways the government organization accomplishes this task is by maintaining a database of complaints made by consumers against companies. And people have certainly taken advantage of this service since its creation two years ago. In that time, the CFPB has received more than 700,000 complaints aimed primarily at financial firms.
When a consumer lodges a grievance, the agency sends it to the offending company and gives them 15 days to respond. Once the agency receives a reply or the allotted time expires, the complaint then gets posted into a public database. This allows the CFPB to detect patterns of small problems before they turn into big ones. Representatives at the agency say this strategy enabled them to take action against a student loan provider that allegedly charged unlawfully high rates for members of the military. Others claim that the database has also led to better customer service at banks. “The advent of the public database means banks are competing to have the fewest number of those complaints,” said former CFPB employee Rohit Chopra.
Still, the agency has plenty of critics who feel it is too quick to regulate, leading to increased costs for businesses that can harm consumers. In fact, lawmakers in Congress recently introduced a bill that would eliminate the CFPB. If it passes, the consumer complaint database would be gone as well, once again leaving citizens without an outlet to air their grievances against potentially deceptive companies.
Questions:
- How does the CFPB’s public database of consumer complaints help protect citizens from unlawful practices by financial companies?
- Do you think the CFPB should have its power reduced or even eliminated entirely?
Source: Kathryn Vasel, “The CFPB Has a Database with 700,000 Consumer Complaints,” CNN Money, February 21, 2017. Photo by CafeCredit.com.