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CFPB Consumer Complaint Database: Performance & Customer Service

Jul 4, 2017 by Venminder Experts

The mortgage industry has a curious relationship with the CFPB. While there are a few bad actors who fall foul of the CFPB enforcement actions...as an industry, we are striving to make mortgage lending an industry to be proud of. 

One of the key priorities of the MBA this year is to streamline the communication and relationship with the CFPB. The perception to many is that the CFPB regulates by enforcement. It may be a harsh truth; but regardless, to satisfy the CFPB and protect your institution, you need to take preventative action.

The agency is transparent and provides data that can be used to help judge your own third party risk management and your providers.

An example of this is with their recent data on complaints. Use it! Let's go what is available and how to use it.

A Few Complaint Data Resources

  • There are several interesting presentations regarding complaint data that the CFPB make available. It makes for a fascinating read and points the way to some interesting things you can do to proactively manage your vendors. 

  • Our friends at Ballard Spahr shared a great presentation from the CFPB on the complaint data process recently. You can read more about it here.
     

Interesting Data In CFPB Monthly Complaint Report, Vol. 24

There are a couple points in the Vol. 24 report that particularly caught my attention. Let's go through them now. 

#1: Voice of the Customer

The report references customer feedback based on their complaint experience. These are key take-aways to consider. For example:

  • Consumers want to be treated fairly and accurately. Response time to a complaint is key in a successful resolution.
  • Consumers feel they have an ally in the CFPB and have a voice in getting the attention of the financial institution.

#2: States with High Complaints

California, Texas and Florida lead the way in total complaints submitted to the CFPB. This data goes back to 2011.

  • What’s interesting is that California and Florida were hit extremely hard during the financial crisis and recovery times were extended. Texas was somewhat immune to the record foreclosures experienced across the country. Yet, complaints were comparable in all three states. State populations may also play a part and could be an underlying factor to some of the data.
  • At a national level, the top three categories were listed as:
    Product Number One Issue
    Mortgage Problems when you are unable to pay.
    Debt Collection Continued attempt to collect a debt not owed.
    Credit Reporting Incorrect information listed on credit reports.

The report data transitions from a national overview to that of a state by state blow by blow. Each of the 5 product categories which were tracked jockey for position (50 state breakdown); consistently Mortgage, Debt Collection and Credit Reporting ranked in the top 3 spots.

How to Apply This Data to Your Vendor Oversight Activities

Based on the products and complaints that we’ve identified, a vendor manager should take this data seriously. Vendors such as servicers, sub-servicers (fourth parties), debt collection agencies and credit vendors may all fall into these complaint categories.

Here are several items you can do to make your process a proactive function.

1. Perform scorecard calls to detail specific SLA requirements.

2. Ensure that the vendor informs you in a timely manner when they receive a complaint which impacts your organization and, more importantly, your consumer.

3. Participate in consumer-facing customer service calls.

4. Ensure the vendor understands and has the capability to perform within the regulatory compliance requirements. This would include ECOA, UDAAP, FCRA, FDCPA.

5. The vendors should own internal complaint data and share it with you.

6. Reviewing staffing levels particularly in key states where your largest footprint exist may help to ensure that incoming complaints are dealt with in an effective and efficient manner.

7. Ensure the vendor has a robust complaint management tracking system. How are complaints handled and escalated? Is the vendor committed to learning from complaint data and root cause analysis?

8. Should the vendor fall foul of a monetary fine and an enforcement action, it's in your best interest to review your contractual requirements and insist that pending enforcement actions are clearly communicated to you. Reputation risk poses a real threat and should be given equal consideration so that you can help mitigate any fall out.

Data helps inform, but it's up to you to make appropriate actions in response to truly protect your institution from third party risk. 

To learn about proper vendor oversight on your contract mortgage underwriters, download our infographic.

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Venminder Experts

Written by Venminder Experts

Venminder has a team of third party risk experts who provide advice, analysis and services to thousands of individuals in the financial services industry.

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