Tony Dutzik
Associate Director and Senior Policy Analyst, Frontier Group
Established in 2010, the Consumer Financial Protection Bureau (CFPB) helps protect consumers from dangerous and unfair practices in the marketplace for financial services. Addressing consumer complaints is a major part of the CFPB's mission, and the agency's Consumer Complaint Database is a rich source of information about the challenges consumers face in the financial marketplace. Big Banks, Big Complaints is the first of a series of reports examining patterns in consumer complaints to the CFPB, focusing specifically on complaints about bank accounts and services.
Associate Director and Senior Policy Analyst, Frontier Group
Intern
Senior Director, Federal Consumer Program, U.S. PIRG Education Fund
The Consumer Financial Protection Bureau (CFPB) was established in 2010 in the wake of the worst financial crisis in decades. Its mission is to identify dangerous and unfair financial practices, to educate consumers about these practices, and to regulate the financial institutions that perpetuate them.
To help accomplish these goals, the CFPB has created and made available to the public the Consumer Complaint Database. The database tracks complaints made by consumers to the CFPB and the responses of financial institutions to those complaints. The Consumer Complaint Database enables the CFPB to identify financial practices that threaten to harm consumers and enables the public to evaluate both the performance of the financial industry and of the CFPB.
The CFPB’s searchable complaint database is the newest of a set of federal government consumer complaint databases that help consumers make better economic and safety choices by reviewing other’s experiences and searching for problems or product recalls. The transparency also helps firms improve their products and services. In short, transparency improves the way markets work. (Information on other databases is available in Appendix B.)
This report is the first of several that will review complaints to the CFPB nationally and on a state-by-state basis. In this report we explore consumer complaints about bank accounts and services with the aim of uncovering patterns in the problems consumers are experiencing with their banks.
Since the Consumer Financial Protection Bureau began collecting data on banking in March 2012, the agency has recorded nearly 19,000 complaints by consumers about bank accounts and services.*
Figure ES-1. Complaints by Banking Service
Twenty-five U.S. banks account for more than 90 percent of all complaints to the CFPB.
Table ES-1. Top 10 Banks for Complaints per Billion in Deposits
Company
Complaints per Billions in Deposits
TCF National Bank
24.9
Sovereign Bank
9.1
Capital One
6.5
RBS Citizens
6.1
GE Capital Retail
5.7
Regions
4.8
TD Bank
4.8
First Niagara Bank
4.3
PNC Bank
4.3
Fifth Third Bank
4.3
Complaints about banks vary by state and by the primary federal safety and soundness supervisor of the bank. All banks and credit unions, as well as non-bank financial firms, are subject to the CFPB’s regulations. In addition, the CFPB supervises and examines all large bank and credit unions (>$10 billion in assets) for their compliance with consumer protection laws. Large banks and credit unions also have a separate prudential, or safety and soundness, supervisory agency as well.
Figure ES-2. Most Complained-About Bank by State[i]
More than one in four complaints about banking services processed by the CFPB ended with the consumer receiving some form of financial relief. However, consumers disputed the resolution of roughly 20 percent of all complaints.
The Consumer Financial Protection Bureau’s Consumer Complaints Database is a key resource for consumer protection. To enhance the effectiveness of the CFPB in assisting consumers in pursuing and resolving complaints:
To improve the effectiveness of the CFPB, the agency should:
* As of July 15, 2013
[i] In Kentucky, Fifth Third Bank and JPMorgan Chase are tied for first for total complaints. Fifth Third is represented here based on its higher complaints-to-deposits ratio nationally.
Tony Dutzik is associate director and senior policy analyst with Frontier Group. His research and ideas on climate, energy and transportation policy have helped shape public policy debates across the U.S., and have earned coverage in media outlets from the New York Times to National Public Radio. A former journalist, Tony lives and works in Boston.
Intern
Ed oversees U.S. PIRG’s federal consumer program, helping to lead national efforts to improve consumer credit reporting laws, identity theft protections, product safety regulations and more. Ed is co-founder and continuing leader of the coalition, Americans For Financial Reform, which fought for the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, including as its centerpiece the Consumer Financial Protection Bureau. He was awarded the Consumer Federation of America's Esther Peterson Consumer Service Award in 2006, Privacy International's Brandeis Award in 2003, and numerous annual "Top Lobbyist" awards from The Hill and other outlets. Ed lives in Virginia, and on weekends he enjoys biking with friends on the many local bicycle trails.