WASHINGTON-The two major credit union trade associations expressed significant concerns with the Consumer Financial Protection Bureau's new Consumer Complaint Database on credit cards, citing a number of costs and unintended consequences that could hurt credit unions.
"NAFCU understands the CFPB has the authority to investigate legitimate consumer complaints," said NAFCU CEO Fred Becker. "Unfortunately, we fear that this new database may open the door to frivolous and unsubstantiated complaints. In addition, given the nature of viral media, disclosing all complaints may paint a misleading picture and trigger reputational risks for solid institutions that could raise safety and soundness concerns for the financial institutions in question."
The consumer complaint database will only include data involving providers with more than $10 billion in assets, and CFPB said it is also issuing a proposal for comment on extending the database to mortgages and consumer lending products, checking accounts, savings accounts, check cashing services and remittance services-a proposal NAFCU takes issue with, as well.
"The CFPB's decision to pursue extending the database to additional financial products would further exacerbate the potential risks for financial institutions with unproven value for consumers," Becker said in his letter to the agency.
CUNA agreed, suggesting that limited, targeted questions, as well as efficient information collection methods, should be used to minimize additional burdens and costs on credit unions.
In a comment letter to the consumer agency, CUNA wrote that it believes CFPB should work to mitigate implementation and ongoing compliance costs and unintended consequences to CUs that could result from the proposed regulations.
"While the CFPB estimates that responding to the proposed information collection requests may take up to 90 minutes per response, we believe respondents will have to spend much more time to understand and research the potential regulatory changes and the numerous areas that may be affected at their institution and at third-parties they may use, as well as coordinating a response to agency," CUNA wrote. "To minimize costs for respondents, the CFPB should develop limited, targeted questions, and provide additional resources to assist respondents with this information collection."
As an alternative, CUNS suggested sampling institutions that are representative of the markets affected by the CFPB rulemakings would be more efficient. "The agency should utilize proper statistical and research methods to ensure a representative sample for each affected market to properly measure compliance costs," CUNA wrote. "Other institutions that are not part of the sample should have an option to submit their information after reviewing the information collection materials."