Director Kraninger’s Speech at the National Consumer Empowerment Conference

Thank you, Ruth, for that kind introduction, and thanks for having me. I’m delighted to be here at the 10th Annual National Consumer Empowerment Conference. I’ve had several interactions with Consumer Action since becoming Director and I truly value your input. 

This is probably the first time I have met many of you, so let me tell you a little more about myself than what Ruth shared. I’m no stranger to public service; I’ve spent the last 20 years of my life dedicated to it. It has been said that public service is a public trust. It is a responsibility that I take with great humility, recognizing that I need to engage with as many we serve as possible. 

I worked under Secretary Norm Mineta, a former Democratic congressman and Clinton commerce secretary, who served as President Bush’s Secretary of Transportation. 

He liked to say there are no Democratic roads or Republican highways. And, we were singularly focused on developing and promoting the right policies for the American people. We also engaged in robust and transparent discourse on what those right policies were – both internally and externally with the many stakeholders who cared about those policies. I have adopted that model in my career and am bringing that rigor to my leadership at the Bureau, seeking a variety of opinions and viewpoints and applying common sense.   

On day one as Director last December, I launched a listening tour. Now more than eight months into this job, I’ve met with more than 700 consumer groups, consumers, state and local government officials, military personnel, academics, non-profits, faith leaders, financial institutions, and former and current Bureau officials and staff.

Nobody’s been shy about sharing their viewpoints with me, and because of that I have heard a great diversity of thoughts. Their feedback and viewpoints have helped shape my approach. Indeed, it’s from those valuable experiences that I’ve decided smart regulation for the Bureau means concentrating on prevention of harm. I believe this is the most effective, efficient way to carry out our mission.

As most of you in this room know, Congress clearly articulated the purpose and objectives of the CFPB in the Dodd-Frank Act. In summary, the act states, “The Bureau shall seek to implement and, where applicable, enforce federal consumer financial law consistently for the purpose of ensuring that all consumers have access to markets for consumer financial products and services and that [those] markets… are fair, transparent, and competitive.”

Congress gave significant powers and tools to the Bureau to carry out that mission. These tools include education, regulation, supervision, and enforcement. But Congress also provided further direction. Among other things, Congress directed us to set up offices dedicated to specific, vulnerable consumer populations, such as servicemembers and older Americans. Congress also directed us to collect, investigate, and respond to consumer complaints. Indeed, handling consumer complaints is one of the primary functions of the Bureau. As such, I have emphasized the importance of ensuring our complaint system supports all four of our tools. I also know this audience cares very much about our complaint function. And so that is where I will focus the balance of my remarks. 

To date, the Bureau has handled more than 1.9 million complaints. More than 5,000 financial companies have responded through this process, providing timely responses to 97 percent of the more than 1.3 million complaints sent to them for response.  

We share information about consumer complaints with the public through the Consumer Complaint Database. As you know, the public database is available on the Bureau’s website and includes information about de-identified complaints the Bureau sends to banks and nonbank financial companies for response. 

It works like this: When consumers have an issue with a financial product or service, they can find helpful consumer tools on consumerfinance.gov or call or email us with their questions. If they decide to submit a complaint, they identify the consumer financial product or service with which they have a problem, the name of the company providing that product or service, and the type of problem they are having with that product or service. The Bureau’s complaint form also requires consumers to affirm that the information provided in their complaint is true to the best of their knowledge and belief. We then forward those complaints to the company identified by the consumer through our secure Company Portal. We work with the company to get the consumer a response. We also work with Congressional offices to help handle constituent complaints.  

Some of the complaints we receive are referred to other regulatory agencies, such as complaints about depository institutions with less than $10 billion total assets. 

Complaints are added to the database after the company responds to the complaint confirming a commercial relationship with the consumer, or after the company has had the complaint for 15 calendar days, whichever comes first.   

The database contains complaint information, including the date of submission and the name of the company the complaint was sent to for response. The database also includes information about the actions taken by the company in response to the complaint, such as, whether the company’s response was timely and how the company categorized its response. 

When consumers submit complaints, they also include their description of what happened. 

These narrative descriptions convey the consumers’ issue in their own words and from their perspective. Since 2015, the Bureau has given consumers the opportunity to direct the Bureau to publish their description of what happened in the public database, after we take steps to remove personal information. Since 2015, the Bureau has also given companies the option to select a public response. 

This information is made available to the public without editorializing on our part, so the public can review and analyze the information, and draw their own conclusions. 

But the Consumer Complaint Database has not been without controversy on the part of both consumer advocates and industry. In fact, these two sides have two very different views on what the future of the database should be. Many consumer advocates, have said they want the public database to continue. Businesses have gone so far to say that they view the database as the Government’s version of Yelp.  The debate among the two sides has been unending leading to a fundamental  question for the Bureau to answer: should the database remain public or should it be taken down? 

The Bureau asked for public comment in 2018 and we received  a staggering, nearly 26,000 comments from consumers, government and elected officials, community and consumer groups, financial service companies, academics, researchers, market analysts, specialty population groups and privacy groups.

As Director, I did not see this as a binary choice. And so some time ago, I charged my team with thinking about a way forward addressing concerns expressed by stakeholders and advancing the interests of consumers first by providing them with more information and transparency.  

So now, after careful consideration and evaluation of stakeholder feedback and public comment, I believe that we have a balanced path forward that takes into account the feedback we received. 

So, here’s what we plan to do: 

First, the database is here to stay. More specifically, the Bureau will continue to publish all previously disclosed fields, including consumers’ narrative descriptions of their complaints with consumer’s consent to publication.  And, if you want to download the full dataset, you will still be able to do so. 

But, I don’t think the functionality of what amounts to a “big” spreadsheet should satisfy an agency that bills itself as a 21st Century, data-driven agency. We can do so much more to improve the user experience. 

That is why we are working to develop modern data visualization and trend analytics tools that will make it easier for consumers, researchers, advocates, and other stakeholders to explore the data and quickly look at the data in a clearer and more powerful interface. 

These are the kind of tools that our researchers already use internally and I think making them available to the public will greatly improve the functionality of the database. 

Another way we are working to improve the database is to ensure it presents consumers opinion and other information in a fair and accurate way. 

A few of these changes are happening as I speak. Specifically, we are expanding and more prominently displaying disclosures to provide better context to the published data since we recognize that complaints are not necessarily representative of all consumers’ experiences with a financial product or company. It is imperative that we make it known the Consumer Complaint Database is not a statistical sample of consumers’ experiences in the marketplace. This addresses concerns about misrepresentations and incomplete or misleading data.

Today, we will also work to better inform consumers by integrating consumer financial educational resources into the complaint process by helping them find answers to financial questions on our website before submitting a complaint. While not a requirement, we are also encouraging consumers to contact the company before submitting a complaint. After all, informed consumers are empowered consumers.

Developing data visualization and trend analytics tools for the public to use via a more powerful interface will take more time. Starting in spring 2020, we will being rolling out the new functionality with features like a map view of complaints. Later in the summer of 2020, we will add additional tools to view complaint trends. Rolling out the new functionality in this way will both give us the opportunity to design a clearer and more powerful interface and to incorporate feedback received along the way. 

While we are working to enhance the database with data visualizations and trends analytics tools, we will explore expanding companies’ ability to respond publically to individual complaints listed in the database. We intend to engage with stakeholders beginning this winter 2019 to identify opportunities and risks associated with expanding the Optional Company Public Response options.  

And finally over the long term, we will continue to explore ways to normalize complaint data across the full range of financial product and service complaints. Complaint data is more meaningful in the context of additional data, such as product or service market share and company size. In the past, we were not able to identify a universal way to adequately and fairly normalize complaint data across the full range of financial product and service complaints, for both bank and nonbank companies, without burdening companies to provide the data, or potentially revealing trade secrets. But we have several ideas now, and I am committed to achieving a workable solution. We will continue to welcome and engage in dialogue with stakeholders as we work toward this solution. 

The bottom line is that collecting, investigating and responding to consumer complaints is a key function of the Bureau that support our ability to improve and focus our education, regulatory, supervision and enforcement tools. Public access to complaint data with increased transparency, fairness, completeness, and utility of the data yields greater accountability to the American people. 

Before I close, let me take a moment to mention the government’s recent brief urging the Supreme Court to hear the case, CFPB v. Seila Law. This matter is in litigation, so I’m not going to discuss it at length, but I did want to repeat to you three points that I made in a letter to Congress and in a message to the Bureau’s staff.

First, uncertainty regarding the constitutionality of the CFPA’s removal provision has caused unnecessary delay in many of our enforcement and regulatory actions. Final resolution of the question will eliminate that delay, which is why we’ve urged the Supreme Court to take the case.

Second, my decision to no longer defend the removal provision does not mean that the Bureau will stop its work. Far from it. I remain fully committed to fulfilling the Bureau’s statutory responsibilities. We will continue to defend the actions that the Bureau takes now and has taken in the past.

Finally, if a court does hold that the for-cause removal provision is unconstitutional, that should not affect our ability to carry out the Bureau’s important mission. As the brief in Seila Law explains, Congress directed that should any provision of the Bureau’s statute be found unconstitutional, the remainder of the Act will not be affected.  

Thank you, again, for the opportunity to be here today. In the end, we will always welcome your input. We welcome it because we realize that collaboration makes us better and more effective. 

Congress gave us the mission to protect consumers in the financial marketplace, and we are working to do this in a measured and thoughtful way, which is all the while robust and complete. A strong financial marketplace for all consumers and responsible businesses is in the public interest and is at the core of our mission.