Earlier this week the Ombudsman’s Office of the Consumer Financial Protection Bureau (CFPB) released its FY2015 annual report. The CFPB Ombudsman’s role is to engage with both internal and external stakeholders and act as an impartial and confidential advocate where needed.
The report listed ways that the Ombudsman’s office feels it has made an impact in the past year. These included:
- Suggested process improvements to ensure that groups sending correspondence to the Office of the Director receive acknowledgment.
- Suggested ways to update Consumer Response communications for consumers in order to clarify how the process works and what they should expect.
- Identified issues related to consumers’ ease of communication with the CFPB, such as the fact that the toll-free number for the contact center doesn’t work for some who are outside of the U.S.
- Shared feedback it received from employees at one of the CFPB’s contact centers.
- Identified issues arising from the submission of complaints on behalf of multiple consumers by third parties. One of the issues is that forms are filled out incorrectly or inconsistently, making it difficult for consumers to access their complaints, and for companies to recognize the consumer.
- Identified the fact that in some cases the complaint system creates multiple profiles for the same consumer.
- Provided suggestions for the normalization of consumer complaint data.
- Suggested that there be greater clarity around the intersection of Supervision and Enforcement.
- Facilitated communication between companies and Consumer Response regarding process. Two examples were mentioned.
- Highlighted confusion around communications related to companies joining the Consumer Response Company Portal.
The report also details ongoing efforts of the Ombudsman to encourage fairness in the drafting of press releases regarding consent orders.
A significant portion of the 2015 report focused on the Ombudsman Forum that was held in September to get candid input from representatives of those industries under CFPB supervision. The topics discussed included:
- Regulatory compliance
- Intersection of Supervision and Enforcement
- Field Hearings
- Company responses to consumer complaints
- Studies and research
- CFPB website and social media
The most robust discussion took place within regulatory compliance, intersection of supervision and enforcement, and company responses to consumer complaints. The following are the summaries of those topics provided in the report:
Prior to the Forum, some industry groups and companies sought more clarity as to companies’ compliance obligations and a further understanding as to what CFPB compliance guidance is authoritative. In addition, they expressed a desire for additional information that would offer more clarity and certainty around regulatory compliance. Further, they shared that they look to consent orders and other enforcement activities to inform their understanding of CFPB’s compliance activities.
In our Forum, participants shared some additional perspectives on this topic, highlighting that it appears that CFPB consent orders are intended as notice to industry about the direction of enforcement. At the same time, without accompanying guidance on general applicability, they indicated that some companies do not know how to proceed. They shared that additional clarity would lead to better compliance. Participants also suggested that the CFPB: include additional context to the issues highlighted in the Supervisory Highlights publication; offer working groups that incorporate industry and consumer groups to inform practical solutions to process issues; and provide additional interpretative guidance on inherited regulations.
Intersection of Supervision and Enforcement
In FY2015, the Ombudsman heard from some stakeholders that they sought clarity as to when the supervision process ends and the enforcement process begins. During this Forum session, participants shared that it would be helpful to have more definition around the June 2013 “Responsible Business Conduct” bulletin and what activity constitutes responsible conduct.
Some participants also expressed that after issuance of a Civil Investigative Demand (CID) that months can go by without a follow-up on the status of the action, which can affect companies’ ability to make various business decisions. In addition, participants shared that it appears that the CFPB includes certain information in press releases as guidance to companies when the participants think that should be in a separate guidance document. At the same time, Forum participants offered suggestions to enhance clarity in this area. For example, they suggested it would be helpful to know how far back in time companies should report issues in conjunction with the “Responsible Business Conduct” bulletin.
In addition, they suggested that information shared around Bureau actions provides an opportunity to highlight industry best practices instead of only describing the problems. They also indicated it would be useful for the CFPB to share how the agency ensures consistency across the regions with the examination process.
Company Responses to Consumer Complaints
Regarding consumer complaints generally, some participants offered that the CFPB encourages consumers to submit consumer complaints, but does not suggest that the consumer first try to resolve the issue with the company. Participants also shared concerns about usage of the company response categories used to answer consumer complaints and their impact on industry. For example, participants shared that a duplicate complaint, as currently defined, must be word for word from a previous consumer submission.
They also highlighted that the company response category “Closed with Explanation” is a broad category that they use for many scenarios. Participants offered some suggestions including: that it may be useful to have an option to efficiently address complaints when the company is not in a position to assist the consumer; it would be helpful to further refine the substantive categories such as “Closed with Explanation;” and the definition the CFPB requires companies to use to designate a consumer complaint as a duplicate should be defined as the “same person, same transaction, same issue.”
From an industry perspective, it’s not clear how impactful or influential the Ombudsman’s office may be. The Office does report directly to the CFPB Director. However, all they can do is highlight, suggest, and offer feedback. The CFPB is under no obligation to act on Ombudsman suggestions.
I was at the Ombudsman Forum in September, on behalf of the Consumer Relations Consortium. It was quite interesting. The dialogue was robust, and people were not shy about sharing feedback. What I learned was that most of the groups shared the same concerns and had common experiences in their interactions with the Bureau.
It’s clear from the 2015 Ombudsman Report, the September Forum, and the latest news, that there is significant focus on and controversy around the Consumer Complaint Portal. In addition to the discussion I included above that came from the Forum, the report details Ombudsman work in the area of complaint categories and duplicate complaints.