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On March 7, the CFPB released its seventh Request for Information (RFI) in a series seeking feedback on the Bureau’s operations. This RFI solicits public comment regarding “the overall efficiency and effectiveness of its rulemaking processes.” The RFI emphasizes that the Bureau is not seeking information related to the particular content of any proposed or final rule—existing rules will be addresses in separate RFIs—or information related to elements of the rulemaking process which are required by law. Specifically, the RFI requests feedback regarding the discretionary aspects of the Bureau’s rulemaking processes, including (i) mechanisms (such as RFIs) the Bureau uses to gather information from stakeholders in advance of initiating a rulemaking; (ii) the Small Business Regulatory Enforcement Fairness Act (SBREFA) panel process; (iii) the content and structure of notices of proposed rulemaking (NPRMs); (iv) the NPRM comment process, including time periods and feedback mechanisms; and (v) the content and structure of notices of final rules. The RFI is expected to be published in the Federal Register on March 9. Comments will be due 90 days from publication.
On March 1, the CFPB released its sixth Request for Information (RFI) in a series seeking feedback on the bureau’s operations. This RFI solicits public comment regarding “potential changes that can be implemented to the Bureau’s public reporting practices of consumer complaint information.” Under the Dodd-Frank Act (Dodd-Frank), one of the Bureau’s primary functions is “collecting, investigating, and responding to consumer complaints.” Dodd-Frank requires the Bureau to annually report to Congress information and analysis of the consumer complaints it receives, and to include an analysis of complaints in its semi-annual reports to the president and certain congressional committees. In addition to its specific statutory obligations, the Bureau also produces monthly complaint reports, special edition complaint reports, and a variety of reports from the Bureau’s special population offices relating to consumer complaints.
The RFI broadly requests feedback on all aspects of consumer complaint reporting and publication practices but also highlights specific topics on which comment is requested, including suggestions consistent with the Bureau’s statutory obligations on (i) the frequency of complaint reporting; (ii) the data fields provided in the Consumer Complaint Database; (iii) whether the Bureau should supplement consumer complaints with observations of company responses to complaints; (iv) the inclusion of information related to product and service size and company share; and (v) whether companies should be notified of their inclusion in a public report prior to publication. The RFI is expected to be published in the Federal Register on March 7. Comments will be due 90 days from publication.
On March 1, the FTC issued its annual summary on consumer complaints received by the agency over the past year, highlighting trends in various categories such as fraud and identity theft. The report, Consumer Sentinel Network Data Book 2017 (2017 Data Book), provides category breakdowns and national and state specific data extrapolated from the Consumer Sentinel Network (CSN)—a secure online database of millions of consumer complaints available only to law enforcement agencies. In compiling the 2017 Data Book, CSN collected and analyzed nearly 2.7 million consumer complaints—a decrease from the nearly 3 million complaints it received in 2016. However, total loses reported for 2017 increased by $63 million to nearly $905 million in total losses due to fraud.
The 2017 Data Book provides a breakdown of complaints sorted into 30 top categories. Highlights include the following:
- States. Florida, Georgia, and Nevada were the top states for fraud complaints, while Michigan, Florida, and California were the top states for identity theft complaints.
- Top categories. While there were 1.1 million fraud reports filed overall (42.5 percent of all reports), debt collection remained the top complaint in 2017, amounting to 22.7 percent of all complaints. Identity theft (13.8 percent) and imposter scams (13 percent) rounded out the top three. “While we received fewer overall complaints in 2017, consumers reported losing more money to fraud than they did the year before,” said Tom Pahl, Acting Director of the FTC’s Bureau of Consumer Protection in a press release issued by the agency. “This underscores the importance of the FTC’s work in educating consumers and cracking down on the scammers who try to take their money.” Rounding out the top ten consumer complaints for 2017 were: telephone and mobile services; banks and lenders; prizes, sweepstakes, and lotteries; shop-at-home and catalog sales; credit bureaus, information furnishers, and report users, auto related complaints, and television and electronic media.
- Military. Fraud and identify theft were the largest category of complaints from military consumers—the majority reporting imposter scams, credit card fraud, and bank fraud. Military retirees and veterans submitted the highest number of reports.
- Fraud losses by age. The 2017 Data Book includes data broken out by age groups for the first time. Younger consumers aged 20-29 reported losing money to fraud more than consumers over age 70, but for older consumers who reported losing money, the median amount lost was greater.
Additional information about the 2017 Data Book is available here.
The CFPB’s Ombudsman’s Office published its annual report to the Director for fiscal year 2017, entitled Advocating for Fair Process in Consumer Financial Protection. The December 6 report details Ombudsman initiatives undertaken in 2017 and highlights the Bureau’s selection as one of four case studies in a December 2016 study by the Administrative Conference of the United States (ACUS) on the use of ombudsmen in federal agencies. Specifically, the Bureau’s report focuses on systemic reviews concerning the following: (i) the accessibility of CFPB print materials for different groups of people; (ii) the telephone entry point for non-consumers; (iii) the documenting and standardizing of ex parte communications regarding proposed rules; and (iv) the implementing of improvements to the way consumers select categories when identifying issues with companies in the consumer complaint database.
The Ombudsman’s report also outlines strategic goals for the next two years, including, among other things, (i) addressing CFPB process issues facing consumers, financial entities, and trade groups; (ii) optimizing resources for effective assistance; and (iii) expanding educational efforts and engagement with stakeholders, in addition to implementing best practices to convey feedback.
On November 28, the CFPB published two notices of its intention to obtain OMB approval to continue its existing consumer complaint collection activities using its “Consumer Response Intake Form” and “Generic Information Collection Plan for Consumer Complaint and Information Collection System (Testing and Feedback).” According to the CFPB, use of the forms allows for electronic complaint submission on the Bureau’s website and streamlines the complaint process for consumers. Comments on the agency’s notices (CFPB-2017-0035 and CFPB-2017-0036) must be received by December 28, 2017.
On October 27, the CFPB published a blog post highlighting the Bureau’s October 20 “50-state snapshot of student debt,” which illustrates how the “more than $1.4 trillion in student loan debt” is spread across the country. The snapshot also provides data on the more than 50,000 student loan complaints and 10,000 debt collection complaints received by the CFPB through September 2017 (over the course of 5 years). Specifically, for each state, the snapshot provides (i) the “total outstanding student loan debt balance as of 2016”; (ii) the “total student loan complaints handled”; (iii) the “change in volume of student loan complaints handled”; (iv) the “total debt collection complaints handled related to student loans”; and (v) the “change in volume of debt collection complaints handled related to student loans.” The blog post also provides tips and tools intended to assist student loan borrowers navigate problems with their loans.
On October 31, the CFPB published a blog post releasing the Bureau’s “50 state snapshot of servicemember complaints,” which provides state-specific data on the over 91,000 complaints received from servicemembers, veterans, and their families since 2011 (which the CFPB collectively defines as, “servicemember”). Specifically, for each state, the snapshot provides (i) the total number of servicemember complaints handled since 2011, (ii) distribution of complaints by product for both servicemembers and non-servicemembers; (iiI) distribution of complaints by branch of service; and (iv) a visual representation of complaints by zip code.
FTC Launches Military Task Force Website, CFPB Blog Post Discusses Servicemember Debt Collection Rights
On September 25, the FTC launched a new website to showcase the work of the agency’s Military Task Force. The Military Task Force identifies the needs of military consumers and their families and develops initiatives such as workshops that examine financial issues and scams more likely to affect military consumers or training for military attorneys, law enforcement personnel, and financial advisors. (See previous InfoBytes summaries here and here.) The FTC reported in a press release that in 2016, servicemembers, their dependents, military retirees, and veterans submitted more than 100,000 consumer complaints, with retirees and veterans comprising approximately two-thirds of the complaints. The top complaints were imposter scams, identity theft, and debt collection. The new webpage includes links to resources for servicemembers and veterans, workshops, related FTC cases and other initiatives, and congressional testimony.
On September 22, the CFPB published a blog post to discuss servicemembers’ debt collection rights and resources. According to the Bureau, as of August 1, 41 percent of servicemember complaints were related to debt collection, as compared to 26 percent of non-servicemember complaints. The Fair Debt Collection Practices Act (FDCPA) protects servicemembers from debt collectors who use abusive, unfair, or deceptive practices to collect debts, but according to the Bureau, some military consumers claim they have received threats from debt collectors stating that they will report the debt to their commanding officer, have their rank reduced, or put their security clearance up for review. As the post notes, making false threats or disclosing debts to third parties without permission are violations of the FDCPA.
On August 1, the FTC announced a new initiative to help stop the practice of illegal robocalls. According to the FTC, more than 1.9 million complaints regarding unwanted robocalls were received from January through May of this year, making it the FTC’s number one complaint category. Under the new initiative, using information received from consumer complaints, the FTC will release reported robocall phone numbers each day to telecommunications carriers and other industry partners currently implementing call-blocking solutions and will include information such as the date and time the call was received and the nature of the call. “The consumer complaint data is crucial because many of today’s call-blocking solutions rely on ‘blacklists’—databases of telephone numbers that have received significant consumer complaints—as one way to determine which calls should be blocked or flagged before they reach consumers’ phones,” the FTC stated.
On August 1, the CFPB released a special edition of its monthly complaint report, highlighting company and consumer responses to the Bureau’s consumer complaint process. According to the Bureau, it has handled over 1.2 million complaints from 2011 through July 1 of this year. In the last three years, debt collection, credit reporting, and mortgage complaints were the top three consumer complaint categories. The report illustrates the handling of a consumer complaint:
- Consumer Resource Centers answer questions about consumer financial products and services and provide status updates on existing complaints;
- The CFPB states that companies receive complaints typically within a day, and that within 15 days, consumers generally receive a response in one of the following four categories: (i) closed with monetary relief; (ii) closed with non-monetary relief; (iii) closed with explanation; and (iv) closed. The Bureau states that companies have provided “timely responses to approximately 97% of complaints”;
- Consumers can check the status of their complaints through the Bureau’s portal, review responses received from the company, and provide feedback on the company’s response.
Consumer feedback, the CFPB stated, primarily concerns disputes regarding companies’ responses. Among the dispute categories, 23 percent related to mortgages, 22 percent to consumer loans, and 20 percent to credit cards. The Bureau reported that negative and positive feedback is used to improve the complaint process.
In July, the CFPB Ombudsman’s Office issued its mid-year update for 2017. Each year, the Ombudsman is required to submit an annual report to the CFPB Director. The mid-year update outlines issues related to individual inquires made to the Ombudsman’s Office, the accessibility of CFPB print materials, whistleblower communications, Ombudsman Forums, Ombudsman Interactives, and the office’s independent outreach programs. Highlighted are several key points:
- Individual Inquires. The Ombudsman’s Office reported that 820 inquiries were received from consumers, financial entities, consumer and trade groups, and others in the first six months of 2017—an increase from the 541 inquiries received during the same time frame the previous year
- Whistleblower Communications. The Bureau continued to receive complaints about alleged violations of consumer financial protection laws. However, according to the Ombudsman, the contact points for whistleblowers have become more difficult to find since the CFPB’s 2016 website refresh. The Ombudsman’s Office provided suggestions to make the information easier to locate.
- Ombudsman Forums. The Ombudsman’s Office recently conducted a forum with compliance officers, or people in similar roles, from companies that engage with the CFPB. The forum facilitated discussions on: (i) compliance management and the consumer complaint process; (ii) the public Consumer Complaint Database; (iii) the examination process; (iv) CFPB compliance tools and resources; and (v) current regulatory compliance process considerations. Additionally, an event with the associations of state government regulators is planned.
- Ombudsman Interactives. The “Ombudsman Interactives” initiative was launched earlier this year to facilitate discussions similar to those at the Ombudsman Forums. Attendees at consumer, trade, and other conferences participated in the onsite interactives.
- Ombudsman Outreach. The Ombudsman’s Office reported that it continues its independent outreach programs intended to share information on the CFPB’s resources and latest work. A coordinated outreach program held this year was attended by nationwide state banking associations.
- Jeffrey P. Naimon to discuss "Post-pandemic CFPB exam preparation" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Making fair lending work for you" at the Mortgage Bankers Association Spring Conference & Expo
- Jonice Gray Tucker to discuss "Reading the tea leaves of President Biden’s initial financial appointees" at LendIt Fintech
- APPROVED Webcast: Staying in the know with Buckley regtech solutions
- Moorari K. Shah to discuss “CA, NY, federal licensing and disclosure” at the Equipment Leasing & Finance Association Legal Forum
- Jonice Gray Tucker to discuss "Compliance under Biden" at the WSJ Risk & Compliance Forum
- Sherry-Maria Safchuk to discuss UDAAP at an American Bar Association webinar
- Jeffrey P. Naimon to discuss "What to expect: The new administration and regulatory changes" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Jonice Gray Tucker to discuss “The future of fair lending” at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Steven R. vonBerg to discuss "LO comp challenges" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Michelle L. Rogers to discuss "Major litigation" at the Mortgage Bankers Association Legal Issues and Regulatory Compliance Conference
- Michelle L. Rogers to discuss “The False Claims Act today” at the Federal Bar Association Qui Tam Section Roundtable