The Consumer Financial Protection Bureau’s online database has been inactive since December, when the bureau shut it down as part of a data security review.
Data security has long been an issue at the bureau. At the time, Mick Mulvaney, acting director of the CFPB, said that he was concerned about internal security processes and policies and that he planned to review over 100 current and pending enforcement actions.
Back in March, the CFPB issued a notice and call for information regarding its complaint database. The notice has been public for almost 90 days and the comment period ends June 4.
According to the notice, the CFPB “is seeking comments and information from interested parties to assist the bureau in assessing potential changes that can be implemented to the Bureau’s public reporting practices of consumer complaint information…to consider whether any changes to the practices would be appropriate.”
There have been more than 1 million complaints registered on the database since its inception, and it has played an important role in CFPB enforcement actions. Champions of the database point to the 2016 Wells Fargo enforcement action that was triggered by a huge number of consumer complaints, arguing that without the aggregation provided by the database, a pattern of behavior may never have come to light.
However, Mulvaney is no fan of the database. At a recent American Bankers Association conference, he said, “I don’t see anything that says I have to run a Yelp for financial services sponsored by the federal government.”
The financial services industry has been critical of the online complaint database. The portal allows consumers to post complaints via mail or online with no context. The CFPB has allowed companies 15 days to challenge those complaints or provide a response before the complaint becomes publicly available through the CFPB website. Once in the system, however, the complaint becomes data that can be searched and sorted by the public or watchdog groups.
“Publishing unverified complaints – or worse, using those complaints to paint a picture of guilt in the public domain – is irresponsible,” said Richard Hunt, CEO of the Consumer Bankers Association, in a statement.
There is no timetable for implementing any changes after the comment period closes. However, given the inherent data security issues involved in collecting banking information over the internet, the long-standing hostility from regulated industries, and the dislike of the current director, one possibility is that the database will simply be shuttered.