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Monday, December 7, 2015

CFPB’s Ombudsman Releases Annual Report

The CFPB Ombudsman’s Office released its Annual Report to the Director. The Ombudsman’s Office was established in the Dodd-Frank Act to serve as “an independent, impartial, and confidential resource” to help financial institutions and consumers “resolve process issues” with the Bureau. The report summarizes the issues that were shared with the Ombudsman’s Office in Fiscal Year 2015.

Topics addressed in this year’s report include the Bureau’s procedures for receiving and acknowledging communications from the public; the Bureau’s Consumer Complaint Database; the intersection between the Bureau’s supervision and enforcement processes; the structure, notice, and scope of field hearings; and the lack of peer review of the Bureau’s research conclusions drawn from confidential data.

The report discussed several recommendations the Ombudsman’s Office has made to the Bureau regarding the Consumer Complaint Database. Below are three recommendations of particular note:

  • The Bureau’s Consumer Response office revised its definition of a “duplicate” consumer complaint, so that complaints that are not verbatim duplicates, but still clearly duplicates, will be categorized as such. Participants at the Ombudsman Forum in September suggested that the definition of “duplicate” include “the same person, same transaction, and same issue.”
  • The report discusses the lack of clarity regarding which response choice a company should select when responding to a consumer complaint. As an example, some companies have used “Closed with Explanation” when a complaint concerned another company, instead of the “Incorrect Company” response. The use of “Closed with Explanation” results in the complaint’s publication in the public Database, whereas a response of “Incorrect Company” does not.
  • The Ombudsman’s Office provided feedback and suggestions to the Bureau regarding normalization of the consumer complaint data and company portal communications. However, the report did not state what those suggestions were or whether the Bureau provided a response to the Ombudsman’s Office.

The Annual Report provided updates on other compliance-related issues, including the following:

  • The report stated that the Bureau’s examination report template will be updated to indicate that “corrective action will be addressed in the enforcement process." Questions had been raised over whether corrective action would be addressed as part of the supervision process or enforcement process.
  • The report stated that, over the past five months, there had been a “noticeable improvement” in the Bureau’s alignment of its press releases on consent orders with the actual text of those orders (pages 22-24). Previously, the Ombudsman’s Office had found that the Bureau’s press releases “generally do reflect the language in the consent orders.” However, the Ombudsman’s Office had noted that press releases and consent orders did not always align with respect to the information provided.

Read the report.

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