Frontier Group intern Spencer Alt contributes the following blog post. Spencer is a rising senior at New York University, where he is pursuing a major in economics and a minor in mathematics.
Richard Cordray, President Obama’s nominee for director of the Consumer Financial Protection Bureau (CFPB), was finally confirmed by the U.S. Senate last Tuesday in a 66 to 34 vote. His confirmation is a major victory for consumers across the country.
The CFPB was first established in 2010 as a major part of the reforms introduced by the Dodd-Frank Act. It is one of the few institutions with the mission and authority to combat the risky and unfair financial practices that often ensnare consumers – from payday loans to excessive bank fees to deceptive credit card policies.
An important part of the CFPB’s work is its direct engagement with consumers. The bureau assists consumers who believe they have been the subject of financial wrongdoing with the process of filing complaints. It then aggregates data about the nature of the complaints in a Consumer Complaint Database.
The database is a rich source of information about consumers’ travails in the marketplace for financial services. It includes specifics on the issues the consumers faced, the companies that were the subjects of complaints, and the states in which the complaints were filed. These data can then be used by the CFPB to discover new issues and identify areas where additional regulation is needed. So far, the CFPB has collected data on over 125,000 complaints about seven financial sectors including banks, credit cards, mortgages, and student loans. The scope of the data is continually expanding; earlier this month the CFPB announced that it would begin accepting complaints about debt collection.
In a shining display of transparency and open government, the CFPB has made its database of consumer complaints about financial services available to the public for download in a variety of formats. It has even opened up the database to programmers and app developers through its API (Application Programming Interface) built on the Socrata Open Data platform. Making these data accessible is an important step toward incentivizing better treatment of consumers and holding financial institutions to a higher standard.
Frontier Group has begun to review the data in the CFPB database to document trends in consumer complaints in various sectors of the financial services industry. Expect to see more on this issue soon.