The CFPB is an important tool for any credit rebuilder. On March 24, the Consumer Financial Protection Bureau provided the Consumer Response 2020 Annual Report, also known as the consumer complaint report, to Congress. This report reflects complaints submitted by consumers to the CFPB. The report shows a significant increase in complaints compared to the previous year. This made the CFPB less effective for credit rebuilding in 2020. Understanding why is important for all consumers and credit rebuilders.
Consumer Complaint Report Showcases Failing Consumer Confidence.
In 2020, the CFPB saw a 54% rise in complaints from the previous year. The total number of complaints increased from 350k in 2019 to 540k in 2020. This comes as no surprise to consumer finance observers. The CFPB believes the rise in complaints is due to the impact of the COVID 19 pandemic. At the CFPB, Acting Director Dave Ueijo states, “The pandemic has been among the most disruptive long-term events we will see in our lifetimes. Not surprisingly, the shockwaves it sent across the planet were felt deeply in the consumer financial marketplace.”
Important bullet points from the report:
- Credit reporting received the largest number of consumer complaints for a total of 58% of ALL complaints.
- Debt collection was the second largest subset of complaints with 15%.
- Florida consumers submitted more complaints than any other state, with over 300 per 100k people in the state,
- While only 5.9% of complaints directly mentioned COVID-19, the CFPB impressed that “absence of coronavirus as a keyword in a complaint does not necessarily mean the complaint was not related to the financial impact of the pandemic.”
Recently, the CFPB stated new complaints about inaccurate information on credit and consumer reports rose from the prior year. The CFPB also emphasized that in prior years, credit reporting agencies provided substantive and detailed responses to the majority of complaints. However, in a scathing rebuke of the three major credit reporting agencies, the CFPB observed that agencies stopped providing complete and accurate responses to many of these complaints in 2020. Most credit reporting agencies leveraged the pandemic in their statements on their respective websites, often using staffing concerns as a reason for long delays in response. The CFPB has insinuated that this will change in 2021. With a new administration and new director, there is reason to believe 2021 will be a better year for consumers.
The CFPB Eased Regulatory Compliance in 2020 Due to Pandemic.
At the beginning of the pandemic, the CFPB signaled regulatory relief in a statement about operational concerns posed by COVID-19. In this statement, the CFPB stated it “will consider a consumer reporting agency’s individual circumstances” when conducting an examination for compliance with the FCRA. This allowed for leniency for credit reporting agencies and their compliance. As the CFPB has signaled the end of this leniency is coming soon, expect increased compliance.
This article was last updated on May 10, 2022