Before July 14, the Consumer Financial Protection Bureau was working to get banking industry feedback on a contract to govern banks’ use of consumer complaint data. Objections from industry advocates have caused the bureau to silently drop the project, according to the American Banker.
The agency “is not moving forward with the contemplated contract approach,” CFPB spokeswoman Moira Vahey said in response to enquiries from the American Banker.
The bureau has not shared its reasons for wanting to control how consumer complaint information is used by banks. The draft agreement, however, does give some clues. “The purpose of this agreement is to facilitate the confidential transmission of consumer complaint data to the User (bank), pursuant to the terms and conditions set forth below,” it said.
Why was the bureau interested in the “transmission of consumer complaint data to the User (bank)”? The bureau has made no comment to supply an answer this question. “Outreach to industry stakeholders regarding our consumer complaint handling is about ensuring companies are complying with their existing legal obligations,” Vahey wrote in the same email to the American Banker. The CFPB “will continue to engage with industry stakeholders to ensure compliance with their legal obligations for securely and appropriately handling consumer complaint information,” she said
The draft version, called the Company Portal Services Agreement, was circulated in August and September 2013 among banks, credit unions and other financial institutions. The draft agreement’s language established controls over all facets of the CFPB’s online complaint portal. The draft states that the CFPB owns all data submitted through the online complaint portal and that banks would be required to keep the information confidential and could not disclose or disseminate it without the CFPB’s approval. Banks also would be required to notify the CFPB of a court order or subpoena that would result in release of the consumer complaint data. The draft also required banks to give the CFPB the opportunity to respond to a court order, even to the point of CFPB intervention in legal proceedings.