WASHINGTON–The Consumer Financial Protection Bureau has hit its stride on consumer complaints.
In the past week, the bureau has begun taking complaints in two major consumer markets–deposit accounts and student loans–and has quietly begun beta testing to integrate complaints on auto loans and other consumer installment loans.
While the addition of new markets was not surprising, the speed with which bureau is ramping up its complaint portal shows it is dedicating significant resources to hearing directly from consumers, and using new tools to do it, observers say.
"The use of technology and innovation in different ways is a fulfillment of what [Elizabeth] Warren had in mind from the earliest days," says Don Lampe, a partner with Dykema law firm. "I think it's a helpful reminder for us as we try to understand this in terms of a historical context that the [bureau] has had its eye on and had its resources behind using these 21st century technology tools from the very beginning."
The bureau sent a letter to more than 6,000 universities across the country on March 5 notifying them that students and alumni may seek help with their loans through its complaint system. The letter and corresponding announcement came on the heels of another last week that the bureau has begun taking complaints on checking and savings accounts, opening the door for the agency to receive feedback on controversial overdraft fees.
Until last week, the bureau had only processed two kinds of complaints. It started taking complaints on credit cards on July 21, the same day it became an independent agency, and it started processing mortgage complaints in December.
Bureau officials have emphasized that they intend to rely on research to inform their policies and rulemaking agenda, and observers say the complaint portal is an important way for them to lay that foundation.
"It goes right in line with them wanting to be data driven," Isaac Boltansky, a research analyst with Compass Point Research & Trading LLC, says of the recent expansion of the complaint portal. "And it's pivotal for them to be data driven. They're starting to regulate worlds that have never been regulated, and they have to develop a base to do so."
But Barbara Mishkin, a lawyer with the law firm Ballard Spahr, says it's still unclear how the bureau intends to use information gathered from the complaint process, including how it will be shared with the public, and what its role should be in the rulemaking process.
"This kind of data they're going to get through this …is not the typical data that's used in rulemaking," Mishkin said. "This is a fairly unique process, I don't think any of the banking agencies ever had a complaint process like this."
Student loans have surpassed credit cards as the largest source of unsecured consumer debt, according to the bureau. Unlike federal student loans, private loans generally don't have the same borrower protections, such as deferments or repayment plans, and lenders have only been regulated by a patchwork of state and federal officials until recently, the bureau said in a press release.
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