MANHATTAN (CN) – Part of a longstanding erosion of the Dodd-Frank Act, the Consumer Financial Protection Bureau’s interim director Mick Mulvaney recently announced his intent to shut down a public complaint database.
“I don’t see anything in here that says I have to run a Yelp for financial services sponsored by the federal government,” he told banking executives in a meeting reported by the New York Times.
New York Attorney General Barbara Underwood and 13 other top state prosecutors urged the bureau to reverse course on Tuesday.
“The CFPB public database represents an admirable commitment to transparency,” Underwood said in a statement. “By moving to eliminate public access to the database, the Trump administration is yet again putting corporate interests over those of consumers, shielding corporate wrongdoing from public view.”
In a seven-page letter, Underwood and her colleagues across the country listed the benefits this database has yielded.
“For example, an analysis of debt collection complaints revealed that a significant number of debt collectors were unlawfully attempting to collect on time-barred debt,” the letter states. “More recently, since Equifax announced a massive data breach in September 2017, more than 20,000 consumers have filed complaints about the company with the CFPB, many of which were not about the data breach but about other potential issues at the company.”
The bureau’s consumer complaint database traces its origins to the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, which describes publishing such information as one of the bureau’s six primary functions.
Two years later, on June 19, 2012, the database went live to the public. The bureau later introduced a secure portal for state entities to view information unavailable to private citizens.
The attorneys general called such a database “invaluable” in their investigations.
“When hundreds or even thousands of consumers file complaints against the same company regarding the same product, it may suggest a widespread problem,” their letter states. “Because the database allows users to narrow searches based on the consumer and/or company’s geographic location, we have real-time access to information about issues affecting our states’ consumers.”
“We have used information gleaned from the CFPB’s database in connection with investigations into debt collection companies, student loan servicers, for-profit universities, and other companies whose misconduct was initially brought to our attention through a critical mass of complaints filed with the CFPB,” it continues.
Attorneys general of California, Delaware, Hawaii, Illinois, Iowa, Maryland, Massachusetts, Minnesota, North Carolina, Oregon, Pennsylvania, Vermont, and Washington signed the letter, as did the executive director for the Hawaii Office of Consumer Protection.
The Consumer Financial Protection Bureau declined to comment, but Mulvaney backtracked slightly on his plans to bury the database from the public at a recent Women in Housing & Finance event late last month.
“We are obligated by law to collect complaints from people and then to allow various institutions to respond to those complaints, and we've done that. And we will continue to do that," Mulvaney said at the time.
"I guess I've made some news in the past when I pointed out that the statute does not require in any place to keep that public," he continued. "So we are reviewing how we make that information public because we do, how that information is used, and whether or not the way that it is used is consistent with the intentions of the statute. So we'll continue to look very, very closely at the law.”
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