As the newly minted U.S. Consumer Financial Protection Bureau prepares to launch a hotline for consumers to register complaints about banking services and products, the banking industry and consumer groups are launching into a tussle over how much of hotline's information will be made public, according to a Bloomberg report.
Banking industry executives are apparently concerned that unsubstantiated complaints will unduly influence consumers, so they want to prevent the new bureau from airing all complaints in its database. Consumer groups, by contrast, want everyone to have full access to the complaints database -- a conflict the Bureau hopes to resolve before its credit card hotline goes live on July 21, the Bloomberg report notes.
In some ways, the bureau's hotline database could work like a crowd-sourcing review site like Yelp or Epinions.com -- assuming consumers get full access to review all the complaints and have the ability to weigh in with their own. Crowd-sourcing websites' greatest influence on the marketplace lies in their ability to advise consumers about which businesses are worth patronizing and which ones aren't.
But unlike reviews on Yelp, complaints sent to the bureau would have bite. Under the Dodd-Frank financial reform law passed in July, complaints the CFPB receives will be distributed to relevant state and federal agencies for review and possible enforcement action, the report notes.
The banking industry is reportedly hoping the bureau will restrict information regarding each complaint to the consumer who lodged it and to banking regulators, says the report.
The bureau has yet to announce its policy on what consumer complaint data will be made available to the public, but earlier comments from Elizabeth Warren, the executive setting up the agency, suggest she would lean toward openness. Her clear goal is for a bureau that does right by consumers.
Whether or not many people would take the time to scan through the CFPB database when considering which lender to use for a new credit card or car loan is another question entirely.