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Financial Services Law Insights and Observations

CFPB aims to protect consumers at the local level

Federal Issues CFPB Consumer Finance Consumer Complaints UDAAP

Federal Issues

On November 18, the CFPB released a blog describing how CFPB complaint data can help cities and counties protect the public. According to the Bureau, one of the major ways it regulates consumer financial products and services and protects consumers from unfair, deceptive, or abusive acts or practices is through collecting, monitoring, and responding to consumer complaints. The complaints the Bureau receives help inform its policy and regulatory priorities and enforcement activities, according to the blog. The Bureau further noted that consumer complaints “can shine a light on trends and practices that could cause another financial calamity and once again inflict long-term havoc on consumers’ financial wellbeing.” The Bureau said it intends to increase the impact of its complaint data by sharing it with cities and counties to protect consumers at the local level, which will be "a win-win for consumers and the CFPB” because it “helps protect as many consumers as possible from predatory lending, barriers to credit, and other consumer harms.” For its initial engagement, the Bureau chose cities and counties that were best positioned to benefit from the CFPB’s complaint data, including “[l]ocal governments with civil or criminal prosecutorial authority to monitor and enforce their own consumer protection laws as well as force-multiply enforcement of federal consumer financial protection laws such as those available under the Consumer Financial Protection Act”; and “[l]ocal governments with, or that are working to create, financial empowerment offices and developing financial empowerment strategies to improve financial stability for low- and moderate-income households.”

The Bureau explained that after completing the review process, it onboarded the local governments to the CFPB’s Government Portal, which provides local, state, and federal government agencies access to more granular information about consumers’ complaints and companies’ responses through a secure interface. Onboarding to the Government Portal, which required the cities and counties to sign a confidentiality and data access agreement with strict personal data protection requirements, enables the cities and counties to, among other things: (i) view in real-time what consumers are experiencing in the financial marketplace and how companies are responding; (ii) download complaints to examine and enforce rules protecting consumers; and (iii) compare problems constituents are facing to other localities and nationwide. Through the Government Portal, local governments can directly submit constituents’ complaints and get responses from the companies. The Bureau noted that the complaint data can also help local government officials identify what gaps exist, and what fixes are needed, which therefore helps in its mission to foster increased consumer awareness and eventual empowerment.

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