BCFP Ombudsman Report Notes Industry Concerns With Bureau’s Use of Complaint Data, Difficulty in Managing Risk

On November 29, 2018, the Ombudsman’s Office of the Bureau of Consumer Financial Protection (Bureau or BCFP) released its annual report for fiscal year 2018. The Ombudsman’s office serves as a liaison between the Bureau and consumers and the industry. The report discusses several issues, some of which are directly related to the ARM industry.

In its outreach initiatives, the Ombudsman proactively engaged with stakeholders -- both industry and consumer groups -- by appearing at conferences and hosting teleconferences to inform the audiences of their office’s research and work. In “inreach,” meaning connecting with internal Bureau stakeholders, the Ombudsman introduced itself and its resources to the Bureau’s new leadership.

The Ombudsman took away several recommendations, according to this report, from the Ombudsman Forum for industry and trade representatives held in June 2018. The report noted that:

• The industry has concerns about the way that data is classified in the complaint database and the Bureau’s use of that data in its press releases and reports. Specifically, industry representatives noted that the database should distinguish between consumer inquiries and complaints and that this distinction should be noted in the materials and reports created by the Bureau.
• The industry has concerns about being able to manage risk. Specifically, it is difficult to manage risk when there is little or no guidance on how to operate in a compliant manner, when decisions are subjective, and when the Bureau applies rules retroactively. It is also difficult to create training material for compliance staff when there are iterative updates to some rules.
• The industry recommends that the Bureau work with industry representatives on consumer education materials.

The Ombudsman noted and forwarded to the Bureau concerns from stakeholders on the Request for Information (RFI) process. Earlier this year, the Bureau released 12 RFIs over a few months. Stakeholders told the Ombudsman that there was insufficient time to respond to that many requests. Stakeholders also mentioned that they were unsure how the Bureau would use the data.

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insideARM Perspective

This report shows the Ombudsman’s Office listened to some of the major concerns of the industry in relation to the Bureau: the need for clarifying rules (but not regulation by enforcement" and issues with the way the Bureau presents consumer complaint data in press releases and reports. What is missing is how the Ombudsman plans to work with the Bureau to address these concerns. Additionally, there are other concerns for the debt collection industry related to communicating with consumers that should be addressed. The Consumer Relations Consortium presented a comprehensive solution to the Bureau on electronic communications, which would largely alleviate the problem.