The Consumer Financial Protection Bureau’s new database is being applauded by consumer and civil rights groups for its ability to empower cardholders while holding financial companies accountable. Not only that, but the Americans for Financial Reform group has thrown its support in as well.
The new complaint database, which kicked in earlier in June, says the goal is to stop the abusive credit card practices that happens with some credit card companies and networks. Many are saying this is the first significant move towards a more transparent government.
Tangible Tools
Ruth Susswein, who is the Consumer Action Deputy Director and a member of the AFR board committee said in a press release today that,
A searchable credit card complaint database gives consumers a tangible tool to help them make smart shopping decisions and avoid problems on the back end.
She then went on to show strong support for yet another new proposal that would allow an expansion of the database to include other financial products such as bank accounts and student loans. She explained the database empowers consumers and allows them to “draw upon others’ real life encounters to more safely navigate their choices in the American marketplace.”
The CFPB, which announced the new database earlier this year, says it hopes it will serve as an incentive for credit card companies to develop their own transparent policies, which can only strengthen the consumer relationship. By providing accurate, real time information on problems such as unfair interest rate increases, these companies will be held accountable in a significantly different way than what they’re accustomed to. Consumers will also be able to see how quickly – if at all – problems are solved.
Useful Tools
Helping the public see as much as possible about what’s going on in the financial marketplace is one useful tool for encouraging fair and transparent practices. This kind of information can help people steer clear of problems by reviewing other consumers’ experiences prior to making important financial decisions, and it can help the public see patterns and trends,
said Lisa Donner, executive director of Americans for Financial Reform.
She goes on to say her group applauds CFPB’s efforts, but also encourages it to go further with transcripts between email or phone conversations be added to the database when they’re available. She said it would provide “much richer information about the nature of complaints”. Not only that, but she says it could also provide insight as to what many customer service reps experience on a daily basis with their interactions with consumers. It would provide validity to the various problems.
For some time, other industries have had their own databases that allowed consumers to report illegal or unethical practices. Financial consumers are simply being included in a growing list of consumer databases. Disclosing financial complaints will encourage stronger relationships and better overall customer service. It will also provide the consumer agency stronger warning systems to detect and remedy emerging patterns.
Resistance
Banks and credit card companies had sought to limit or even eliminate the database, saying too much disclosure would be unfair and could even jeopardize their competitive edge over other companies. The CFPB is part of the 2009 CARD Act signed into law by President Obama when he took office.
Currently, the agency is taking public comments for its consideration of expanding the database for the other financial products.
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