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CFPB complaint database could cause privacy, other issues

WASHINGTON (1/31/12)--Releasing credit card consumer complaint data "could have misleading implications, unintended consequences, and privacy risks to consumers and others that submit or use the data," the Credit Union National Association (CUNA) has warned in a comment letter to the Consumer Financial Protection Bureau (CFPB).

The CFPB has proposed creating a searchable public database that would provide relevant data on credit card complaints while avoiding the release of private personal information. The credit card complaint database would only include information tied to financial institutions with more than $10 billion in assets. Consumers and issuers will be able to provide background narrative information along with their complaint, but the CFPB will only provide the card issuer, the consumer's zip code, the date of the complaint, and whether and how the issuer responded to the complaint in its database.

CUNA said it "supports the ability of consumers to have timely and clear information on responsible credit card use." However, in the letter, CUNA said it is concerned that other federal financial regulators would follow the CFPB's lead and potentially compile their own credit card complaint databases, creating yet another regulatory and reporting burden for financial institutions.

The agency should give credit card companies the opportunity to resolve any complaints before the consumer information is issued, and should also adjust the data it ultimately releases to account for differences among issuers and credit card products, such as the size of the issuer, the relative size of the credit card portfolio of and within the institution, and the different types and characteristics of credit card products, CUNA said. Any consumer complaint releases should also include a disclaimer to let readers know that the complaints are from individuals that have had particularly bad experiences with their credit companies, and that the information in the database should not be viewed as a representative sample of all credit customers.

The CFPB said it would separate data that will be publicly reported from the private information that consumers may include in their complaints, but CUNA warned that inadvertent disclosure of confidential or narrative consumer or business information could still potentially occur.

CUNA also suggested that the CFPB release this potentially sensitive credit card complaint data in periodic reports, rather than creating a searchable database.

CUNA said it welcomes the opportunity to talk with the CFPB further about how to meets its obligations to consumers without creating further regulatory or consumer privacy issues.

For the full comment letter, use the resource link.
 
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