Will Congress Silence Complaining Consumers?

by Jeff Sovern

On Tuesday, as widely reported, the Senate silenced Senator Elizabeth Warren.  Now House Financial Services Chair Jeb Hensarling wants to silence complaining consumers by eliminating the ability of Senator Warren's creation, the Consumer Financial Protection Bureau, to operate a consumer complaint database.

The Dodd-Frank Act, in 12 U.S.C. § 5511, provides that: "The primary functions of the Bureau are— . . . collecting, investigating, and responding to consumer complaints." Pursuant to that provision, the Bureau has created a complaint database which thus far has received more than one million complaints.  The Bureau forwards the complaints to the companies involved.  The Times's Gretchen Morgenson explains what happens after that:

Cody Hounanian, digital director at Student Debt Crisis, a nonprofit organization aiming to reform the nation’s student debt policies * * *said in an interview that servicers of these debts don’t typically respond to consumer complaints — but they do snap to when the C.F.P.B. gets involved.

“If you reach out to C.P.F.B. with a complaint, not only does it get saved in this transparent database for others to look at,” Mr. Hounanian said, “you will receive a response within a couple of days, and within weeks should have a response from your student loan servicer.”

So the Bureau's complaint process increases the likelihood that consumers will obtain a response.  Indeed, the Bureau has received more than 700,000 responses to complaints it forwarded to companies. And the database serves other purposes.  The Bureau uses its database in making enforcement decisions. Because some of the complaints are made pubic on the CFPB website, consumers can use them to guide judgments about which providers to deal with.  The database also aids people in determining what's happening in the consumer financial marketplace, which can be a boon for researchers and policy-makers.

But now Representative Hensarling wants to put an end to all that.  In a memo describing changes he plans to make in last year's Financial Choice Act, he lists repeal of the consumer complaint database as a goal.  The memo does not explain why, but Gretchen Morgenson offers a rationale: the CFPB may have "been a little too effective in pursuing wrongdoing by banks, consumer credit reporting companies, credit card issuers and student loan collectors . . . . the bureau has also made powerful enemies among financial institutions whose executives have the ear of Mr. Trump and other Republicans."

It would be a shame if President Trump and his congressional allies silenced the ordinary Americans the president pledged to protect so that they instead protect the financial institutions he attacked during his campaign. But it would be consistent with a different campaign: the one that tries to mute different points of view.