The motivation behind this being that such a database would enable consumers to make more empowered decisions when selecting which card to carry while simultaneously marking the agency as a herald of governmental transparency.
Currently, there are two federal agencies operating public complaint databases online, The Consumer Product Safety Commission and The National Highway Traffic Safety Administration. If implemented, the proposed CFPB credit card complaint database would be the third model for how other federal agencies might go about strengthening their transparency while empowering consumers.
The creation of the CFPB was part of 2010’s congressionally-mandated Dodd-Frank Wall Street Reform and Consumer Protection Act. The CPFB has been granted authority to handle all credit card complaints made by consumers. It began accepting such complaints in July 2011 and in just over three months, the bureau fielded over 5,000 grievances both directly from consumers and rerouted via other regulatory agencies. The anticipated amount of consumer interest in the complaints being made by peers is paramount in the reasoning behind CFPB’s desire to establish the public database.
Groups dedicated to consumer advocacy are strongly in support for consumer credit card complaints to be accessible to the general public. Eleven members of Congress sent the CFPB a letter of support for the database in August 2011. Contained within was the statement that, “we believe that public complaint information will help other consumers make better financial decisions up front,” according to online news source OMB Watch.
However, there are opponents to the database. Credit card issuers, for one, are staunchly against the proposal. Last year the National Association of Federal Credit Unions made the statement that “consumer complaints should not be publicly disclosed in any way, shape or form,” OMB Watch reported.
Recently the powerful American Bankers Association submitted a letter to the CFPB containing their comments regarding the proposed publicly accessible complaint database. In the letter, the ABA cited many concerns, one of which was the bureau`s expansive role. However, the primary concern was that by publicizing consumer complaint data the CFPB would be exposing the public to information that is both unreliable and not an accurate representation of the whole.
The letter explained that the data`s “limitations and shortcomings” was “likely to mislead rather than enlighten consumers and policy makers,” according to Michael Germanovsky, editor-in-chief at CreditLand.com
The financial industry has a considerable amount of political influence which may ultimately prove effective in their blocking the database proposal.