[Federal Register Volume 77, Number 121 (Friday, June 22, 2012)]
[Rules and Regulations]
[Pages 37558-37569]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2012-15163]
=======================================================================
-----------------------------------------------------------------------
BUREAU OF CONSUMER FINANCIAL PROTECTION
12 CFR Chapter X
[Docket No. CFPB-2011-0040]
Disclosure of Certain Credit Card Complaint Data
AGENCY: Bureau of Consumer Financial Protection.
ACTION: Notice of final policy statement.
-----------------------------------------------------------------------
SUMMARY: The Bureau of Consumer Financial Protection (the ``Bureau'')
is
[[Page 37559]]
issuing a final policy statement (the ``Policy Statement'') to provide
guidance on how the Bureau plans to exercise its discretion to publicly
disclose certain credit card complaint data that do not include
personally identifiable information. The Bureau receives credit card
complaints from consumers under the terms of Title X of the Dodd-Frank
Wall Street Reform and Consumer Protection Act (the ``Dodd-Frank
Act''). The Policy Statement also identifies additional ways that the
Bureau may disclose credit card complaint data but as to which it will
conduct further study before finalizing its position.
DATES: This Policy Statement is effective on June 19, 2012.
FOR FURTHER INFORMATION CONTACT: Scott Pluta, Office of Consumer
Response, Bureau of Consumer Financial Protection, at (202) 435-7306;
or Will Wade-Gery, Division of Research, Markets and Regulations,
Consumer Financial Protection Bureau, at (202) 435-7700.
SUPPLEMENTARY INFORMATION:
I. Overview
A. Final Policy Statement
Under the final Policy Statement, the Bureau plans to disclose data
associated with credit card complaints in two ways. These disclosures
are intended to help provide consumers with ``timely and understandable
information to make responsible decisions about financial
transactions'' and to enhance the credit card market's ability to
``operate transparently and efficiently.'' \1\ First, the Bureau plans
to issue its own periodic reports about complaint data. The Bureau has
already issued three such reports.\2\ Second, the Bureau plans to
provide public access to an electronic database containing certain
fields for each unique \3\ complaint.\4\ As discussed further below,
the Bureau has adjusted its plans to include certain fields in the
public database in response to comments on the proposed Policy
Statement published by the Bureau on December 8, 2011. The public
database will initially include data from credit card complaints
submitted on or after June 1, 2012.
---------------------------------------------------------------------------
\1\ 12 U.S.C. 5511(b)(1) & (5).
\2\ These are the Consumer Response Annual Report for 2011
(March 31, 2012) at http://files.consumerfinance.gov/f/201204_cfpb_ConsumerResponseAnnualReport.pdf, the Semi-Annual Report of
the Consumer Financial Protection Bureau (January 30, 2012) at
http://www.consumerfinance.gov/reports/semi-annual-report-of-the-consumer-financial-protection-bureau/, and the Consumer Response
Interim Report on CFPB's Credit Card Complaint Data (November 30,
2011) at http://www.consumerfinance.gov/reports/consumer-response-interim-report-on-cfpbs-credit-card-complaint-data.
\3\ The database will not include duplicative complaints
submitted by the same consumer.
\4\ The Policy Statement concerns the Bureau's authority to make
public certain consumer complaint data that it has decided to
include in the public database in its discretion. The Policy
Statement does not address the Bureau's authority or obligation to
disclose additional complaint data pursuant to a request made under
the Freedom of Information Act, 5 U.S.C. 552.
---------------------------------------------------------------------------
B. Concurrent Notice
Concurrent with the publication of this Policy Statement, the
Bureau is publishing a notice in the Federal Register seeking comment
on a proposed extension of the disclosure system described in the
Policy Statement to complaints about consumer financial products other
than credit cards (the ``Concurrent Notice''). In addition to credit
cards, the Bureau's complaint-handling system (the ``Complaint
System'') now encompasses mortgages, bank products such as checking and
savings accounts, and certain other consumer loans. The Bureau
anticipates that the Complaint System will accept complaints about all
consumer financial products and services within the Bureau's
jurisdiction by the end of 2012. Comments in response to the Concurrent
Notice are due by July 19, 2012.
II. Background
A. Complaint System
In the proposed Policy Statement, the Bureau generally described
how the Office of Consumer Response (``Consumer Response'') accepts and
processes credit card complaints. The Bureau has since revised the
Complaint System in a number of respects, in part as a result of the
comments received on the proposed Policy Statement. For example, the
Bureau has adjusted the permissible entries for the ``issuer response
category'' field, as summarized in part III.D.5.
B. Overview of Public Comments
The Bureau received seventeen sets of comments in response to the
proposed Policy Statement. In some cases, several organizations
submitted a single comment letter. Eleven industry groups submitted a
total of nine comment letters. One credit union also commented. One
financial reform organization, Americans for Financial Reform
(``AFR''), submitted a single set of comments on behalf of twenty-one
consumer, civil rights, privacy, and open government groups. Two
privacy groups that joined that set of comments also submitted their
own comments, as did one open government group, which submitted 840
substantially identical comment letters from consumers.\5\ There was
one additional consumer submission. Finally, one member of Congress
commented on the proposed Policy Statement.
---------------------------------------------------------------------------
\5\ One consumer submitted the same letter directly to the
Bureau.
---------------------------------------------------------------------------
Almost all comments concerned the public database component of the
proposed Policy Statement. Industry commenters generally opposed the
public database. Although they endorsed the intended goals of the
public database, many industry commenters asserted that the database
would confuse consumers and unfairly damage the reputation of credit
card issuers. The disclosure of issuer names in the public database was
a particular focus of these comments. Some industry commenters further
asserted that the Bureau lacks legal authority to disclose individual-
level complaint data.
Consumer groups and consumers also endorsed the goals underlying
the public database proposal. The AFR submission supported the public
database, and urged the Bureau to include all narrative fields, subject
to certain privacy protections. The two privacy groups that joined the
AFR submission also offered their own written comments advising the
Bureau to be mindful of the privacy risks associated with broader
disclosure.
Many submissions included comments directed to the Bureau's process
for handling credit card complaints. To the extent that these comments
also relate to the Policy Statement, the Bureau addresses them below.
To the extent that they relate only to the Complaint System and not to
any associated impact on disclosure, the Bureau does not address them
in this final Policy Statement.\6\ In response to such feedback,
however, Consumer Response has and will continue to refine and improve
its Complaint System over time.\7\
---------------------------------------------------------------------------
\6\ To take one example, one credit union association commented
that the Policy Statement should address the sanction that will
apply to an issuer if it fails to respond to a complaint in a timely
fashion.
\7\ Consumer Response already maintains several feedback
mechanisms for participants in the Complaint System.
---------------------------------------------------------------------------
III. Summary of Comments Received, Bureau Response, and Resulting
Policy Statement Changes
This section provides a summary of the comments received by subject
matter. It also summarizes the Bureau's assessment of the comments by
subject matter and, where applicable, describes
[[Page 37560]]
the resulting changes that the Bureau is making in the final Policy
Statement. All such changes concern the public database. There are no
changes to the proposed policy for the Bureau to issue its own
complaint data reports.
A. The Policy Statement Process
One trade association commented that the Bureau should engage in a
public rulemaking under the Administrative Procedures Act to provide
the public with an opportunity to comment on all aspects of the
initiative. One issue that the rulemaking should address, according to
this commenter, is the link between the availability of complaint
information and informed consumer decision-making.
The Bureau is committed to transparency and to robust engagement
with the public regarding its actions. Although not required by law,
the Bureau solicited and received public comment on the proposed Policy
Statement. The Bureau received substantial public feedback expressing a
range of viewpoints, and it has carefully considered the comments
received, as described in detail below. As stated in the final Policy
Statement, the Bureau plans to study the effectiveness of its policy on
an ongoing basis, and plans to continue to engage with the public,
including regulated entities, as it assesses the efficacy of its
complaint disclosure policy.
B. Legal Authority for Public Database
Several trade associations commented that the Dodd-Frank Act does
not authorize the Bureau to create the proposed public consumer
complaint. The associations make two arguments.
First, they contend that the Dodd-Frank Act expressly delineates
the circumstances and manner in which the Bureau may collect, resolve,
and share consumer complaints with others. The public database is not
included. By negative inference, therefore, they argue that the Dodd-
Frank Act does not authorize the database.
Section 1013(b)(3) of the Dodd-Frank Act requires the Director of
the Bureau to establish a unit to collect, monitor, and respond to
consumer complaints regarding consumer financial products and
services.\8\ This provision requires the Bureau to present an annual
report to Congress that includes information and analysis of complaint
numbers, types, and resolutions, and it authorizes the Bureau to share
consumer complaint information with prudential regulators, the Federal
Trade Commission, and other Federal and State agencies, subject to
certain confidentially and data protection standards. According to the
associations, by delineating entities with which the Bureau may share
consumer complaint information,\9\ Congress meant such entities to be
the exclusive recipients of such information.\10\ Furthermore, the
associations argue, by specifying that the Bureau may share such
information only to the extent that these specific recipients agree to
protect the confidentiality of the information shared, Congress
manifested its intention that this information should otherwise remain
confidential.\11\
---------------------------------------------------------------------------
\8\ See 12 U.S.C. 5493(b)(3).
\9\ One commenter argues that, by specifying in Section
1013(b)(3) that the Bureau should report to Congress only complaint
numbers, types, and resolutions, Congress intended to limit the
Bureau to compiling that information. The commenter argues that the
collection and reporting of other information--including narrative
information from consumers--is not authorized.
\10\ One commenter further asserts that Section 1022(c)(6),
which authorizes and in some cases requires the Bureau to share
confidential supervisory information with other agencies,
demonstrates that Congress intended to exclude the public as an
acceptable recipient of such information.
\11\ To the same effect, the trade associations contend that by
directing the Bureau to share consumer complaint information in a
manner that protects data integrity, Congress manifested its
intention that the Bureau share only information that is validated,
reliable, and objective--standards that the associations argue are
not met by the complaint data, including, in particular, complaint
narratives.
---------------------------------------------------------------------------
The associations also argue that Section 1034 of the Dodd-Frank
Act, which requires the Bureau to establish ``reasonable procedures to
provide a timely response to consumers * * * to complaints against, or
inquiries concerning, a covered person,'' does not authorize the
creation or publication of a public consumer complaint database that,
instead of aiding complainants, enables data mining and market
research.\12\ The associations also contend that, by directing the
Bureau in Section 1034(d) to enter into agreements with other affected
federal agencies to facilitate the joint resolution of complaints,
Congress intended for the Bureau to handle consumer complaints in
accordance with the procedures of these other agencies, which publish
only aggregated complaint data.
---------------------------------------------------------------------------
\12\ 12 U.S.C. 5534(a).
---------------------------------------------------------------------------
Second, the associations argue that the Dodd-Frank Act's
restrictions on publishing confidential information block the
implementation of the proposed public database. They contend that
Section 1022(c), which authorizes the Bureau to ``monitor for risks to
consumers in the offering or provision of consumer financial protects
or services, including developments in markets for such products or
services,'' \13\ and to ``make public such information * * * as is in
the public interest,'' only permits the Bureau to make the resulting
information public through aggregate reporting ``designed to protect
confidential information.'' \14\ By using non-aggregated formats, the
associations contend, the proposed database risks compromising the
confidentiality of individual complaint information.
---------------------------------------------------------------------------
\13\ 12 U.S.C. 5512(c)(1).
\14\ 12 U.S.C. 5512(c)(3)(B).
---------------------------------------------------------------------------
One commenter also argues that Section 1022(c)(4) prohibits the
Bureau from collecting or sharing information like zip codes or the
identities of card issuers. Although Section 1022(c)(4)(A) authorizes
the Bureau to ``gather information from time to time regarding the
organization, business conduct, markets, and activities of covered
persons and service providers,'' Section 1022(c)(4)(C) prohibits the
Bureau from using this authority to ``obtain records from covered
persons and service providers participating in consumer financial
services markets for purposes of gathering or analyzing the personally
identifiable financial information of consumers.'' \15\ The commenter
asserts that zip codes and card issuer names constitute personally
identifiable information that the Bureau may not collect or share. The
same commenter cites Section 1022(c)(8), which requires the Bureau, in
``collecting information from any person, publicly releasing
information held by the Bureau, or requiring covered persons to
publicly report information,'' to ``take steps to ensure that
proprietary, personal, or confidential consumer information that is
protected from public disclosure under Section 552(b) or 552a of title
5, United States Code, or any other provision of law, is not made
public under this title.'' \16\ The commenter asserts that this
provision requires the Bureau to keep consumer complaint information
confidential to the extent that any law, including but not limited to
the Freedom of Information Act (``FOIA'') or the Privacy Act, requires
such confidentiality. The commenter argues that credit card issuer
narratives and complaint rates by zip codes constitute trade secrets of
credit card issuers that the Trade Secrets Act, 18 U.S.C. 1905,
prohibits the Bureau from disclosing.
---------------------------------------------------------------------------
\15\ 12 U.S.C. 5512(c)(4)(A), 5512(c)(4)(C).
\16\ 12 U.S.C. 5512(c)(8).
---------------------------------------------------------------------------
The Bureau disagrees with these arguments. First, the Dodd-Frank
Act expressly authorizes the disclosure addressed in the Policy
Statement,
[[Page 37561]]
which cannot, therefore, be barred by negative inference. Second, there
are no applicable confidentiality restrictions that apply to the data
that will be disclosed in the public database.
Section 1022 of the Dodd-Frank Act permits the Bureau, in support
of its rulemaking ``and other functions,'' to monitor and assess risks
to consumers in the offering or provision of consumer financial
products or services.\17\ In monitoring and assessing such risks, this
provision authorizes the Bureau to gather information regarding the
``business conduct'' of covered persons and service providers.\18\ The
provision expressly states that ``consumer complaints'' are among the
types of information that the Bureau may gather for this purpose.\19\
---------------------------------------------------------------------------
\17\ 12 U.S.C. 5512(c)(1).
\18\ 12 U.S.C. 5512(c)(4)(A).
\19\ 12 U.S.C. 5512(c)(4)(B)(i).
---------------------------------------------------------------------------
Not only does section 1022 permit the Bureau to gather or compile
consumer complaint information, it also contemplates that the Bureau
may disclose such information to the public under certain
circumstances. Section 1022(c)(3)(B) states that the Bureau ``may make
public such information obtained by the Bureau under this section as is
in the public interest, through aggregated reports or other appropriate
formats designed to protect confidential information * * *'' \20\
Although commenters focus on the fact that this subparagraph permits
the Bureau to disclose consumer complaint information in aggregated
reports, they ignore the fact that the subparagraph also permits the
Bureau to disclose such information in a non-aggregated format as long
as it protects the confidentiality of certain information in accordance
with the other provisions of Section 1022(c).
---------------------------------------------------------------------------
\20\ 12 U.S.C. 5512(c)(3)(B).
---------------------------------------------------------------------------
Nothing in Section 1013(b)(3) suggests that Congress, in describing
one database containing consumer complaint information and the manner
in which its contents are to be reported to Congress or shared with
other Federal or State agencies, sought to limit the Bureau's authority
to disclose information to the public. Likewise, there is no reason to
interpret Section 1034, which requires the Bureau to establish
procedures to provide a timely ``response'' to consumers to their
complaints, to mean that the Bureau may only disclose consumer
complaint information publicly to complainants, and even then, only to
the extent necessary to ``respond'' to their complaints.
The Bureau also disagrees that subpart D of the Bureau's Interim
Final Rules on the Disclosure of Records and Information,\21\ which the
Bureau promulgated pursuant to section 1022(c)(6), precludes the Bureau
from disclosing publicly any information contained within a consumer
complaint database. Commenters are correct to point out that subpart D
generally restricts the authority of the Bureau to publicly disclose
``confidential information,'' including ``confidential consumer
complaint information.'' \22\ However, such disclosure restrictions
only apply to the extent that consumer complaint information is
confidential in nature. The Bureau's regulations define ``confidential
consumer complaint information'' to mean ``information received or
generated by the [Bureau], pursuant to [sections 1013 and 1034 of the
Dodd-Frank Act], that comprises or documents consumer complaints or
inquiries concerning financial institutions or consumer financial
products and services and responses thereto, to the extent that such
information is exempt from disclosure pursuant to 5 U.S.C. 552(b) [the
FOIA].'' \23\ Because the information to be disclosed in the public
database is not exempt from disclosure under the FOIA, as discussed in
more detail in part III.D.1.a below, such information does not
constitute ``confidential consumer complaint information.'' As a
result, there is no applicable rule that precludes the Bureau from
making such information available to the public.
---------------------------------------------------------------------------
\21\ See 12 CFR 1070.40 through 1070.47.
\22\ See 12 CFR 1070.41 (prohibiting Bureau employees from
disclosing confidential information other than as provided in
subpart D); 12 CFR 1070.2 (defining ``confidential information'' to
include ``confidential consumer complaint information'').
\23\ 12 CFR 1070.2(g).
---------------------------------------------------------------------------
C. The Impact of the Public Database on Consumers
Consumer groups, privacy groups, and consumers commented that the
public database would help consumers make more informed decisions and
avoid ``bad actors.'' They also noted that consumers can draw their own
conclusions from the public database. Several noted that data do not
need to be fully verified or random to be of some use to outside
parties. For example, the data might alert outside researchers and
consumers to potentially harmful trends.
Industry commenters, by contrast, asserted that the public database
would mislead consumers because its contents would be unverified,
unrepresentative, lacking in context, and open to manipulation. Each of
these general assertions is addressed below. Section D addresses
industry comments that disclosure of particular data fields--issuer
name, zip code, credit card complaint type, and discrimination fields--
would be especially inappropriate or misleading.
1. Verification
Several trade associations commented that the Bureau should not
disclose unverified data. Some argued that the Bureau should exclude
complaints lacking factual foundation or legal merit. Others stated
that consumer complaints were primarily statements of opinion, and not
subject to objective verification. Several also argued that complaints
resolved without any showing of company fault should be excluded as
lacking foundation. One trade association stated that releasing
unverified complaint data deprives issuers of due process. Privacy and
consumer groups commented that the lack of verification presented only
minimal risks to issuers because there are controls to ensure that
complaints must come from actual cardholders, and issuers are given
adequate time to dispute their identification.
The Bureau agrees with industry commenters that its complaint
process does not provide for across the board verification of claims
made in complaints. However, as it has previously indicated, the Bureau
plans to specifically disclaim the accuracy of complaints when the data
are made available to consumers. Outside of its own affirmative data
reporting, the Bureau will allow the marketplace of ideas to determine
what the data show.
While the Bureau does not validate the factual allegations of
complaints, it does maintain significant controls to authenticate
complaints. Issuer names are verified using card numbers and by other
procedures. Each complaint is checked to ensure that it is submitted by
the identified consumer or from his or her specifically authorized
representative. Each submission is also reviewed to determine if it is
a complaint, an inquiry, or feedback about the Bureau. Submissions in
the latter two categories are not forwarded to the identified company
for handling as complaints. Further, each complaint is checked to
prevent duplicate submissions by a consumer who has already filed with
the Bureau a complaint on the same issue. Complaints are only forwarded
to companies when they contain all the required fields, including the
complaint narrative, the consumer's narrative statement of his or her
fair resolution, the consumer's contact information, and
[[Page 37562]]
the name of a card issuer within the scope of Section 1025 of the Dodd-
Frank Act.
2. Representativeness
Several trade associations commented that it is inappropriate for
the Bureau to publish data that is not randomly sourced. Non-random
complaints, they contend, cannot provide consumers with useful
information. One trade association commented that academics and
researchers would not use such unreliable data.
The Bureau will inform consumers and any other public database
users that the data reflect only the credit card complaints that
consumers submit to the Bureau. Even though similar limitations apply
to other public complaint databases, however, experience shows that
outside parties have, in fact, made reasonable use of non-random
complaint databases disclosed by other agencies. The trade associations
did not offer any examples of misuse of currently available non-random
data sets or challenge the utility of the examples cited by the Bureau.
In addition to those examples, the Bureau notes that two outside
companies have recently repackaged for consumer use drug and medical
device data mined from the AERS and MAUDE public complaint databases
maintained by the Food and Drug Administration.\24\
---------------------------------------------------------------------------
\24\ M. Beck, Searching for Side Effects, Wall Street Journal
Online, Jan. 31, 2012.
---------------------------------------------------------------------------
The trade associations also fail to acknowledge that consumers
currently make credit card choices with little or no knowledge of
consumer complaints. It is true that more robust data sets might, in
theory, be assembled. Consumers would be better informed if the public
database included complaint data from issuers' internal processes or
even surveys of complainants and non-complainants. But that does not
mean that less complete data sets worsen the status quo. So long as
consumers are aware of the limitations of the data, there is little or
no reason to believe that complaint data should make the market less
informed and transparent.
Industry comments on representativeness also recognized that the
Bureau is expressly authorized to use complaint data to set priorities
in its supervision process. Some industry comments also recognized that
the data could play a role with respect to other statutory obligations,
such as fair lending enforcement or market monitoring. If complaint
data can provide the Bureau with meaningful information, then logically
they may also prove useful to consumers and other reviewers. If the
data lacked such potential, Congress would not have pointed to public
complaints as a basis to set important Bureau priorities.\25\
Furthermore, credit card issuers have told Consumer Response on
numerous occasions that they learn valuable information from consumer
complaints. If the data inform issuers, they have the potential to
inform consumers as well.
---------------------------------------------------------------------------
\25\ See 12 U.S.C. 5493(b)(3)(D).
---------------------------------------------------------------------------
3. Context
Several trade associations commented that Bureau disclaimers about
the lack of verification or representativeness will not effectively
warn consumers about the limitations of the public database. The
associations expressed concern that consumers and the media will
inevitably see or portray the information as being endorsed by the
Bureau, notwithstanding the Bureau's disclaimers. In addition, one
trade group commented that the marketplace of ideas cannot prevent
consumers from being misled by the public database. Another commented
that the database fails to distinguish complaints of major and minor
significance and that without that context, the data are open to
misinterpretation.
The Bureau acknowledges the possibility that some consumers may
draw (or be led to) erroneous conclusions from the data. That is true,
however, for any market data. In addition, the Bureau's two-part
disclosure policy--first, its own affirmative reports of data findings
that it believes may inform consumers, and second, a public database
that researchers and others can mine for possible data trends--is
intended to minimize any consumer confusion about the scope of the
Bureau's own conclusions with respect to the complaint data. The Bureau
is open, however, to further suggestions from trade associations,
issuers, and other concerned stakeholders on how best to provide
additional context for the public database.
4. Manipulation
Several trade associations commented that third parties like debt
negotiation companies could use complaint filing as a strategic tool to
aid their clients. One trade association commented that outside parties
may artificially inflate complaint counts for litigation purposes.
Several trade associations claimed that one outside party has filed
numerous fraud complaints about a single merchant, allegedly for
improper purposes.
The Complaint System has a number of protections against
manipulation. For one, the burden of submitting a complaint is not
negligible. Consumers must affirm that the information is true to the
best of their knowledge and belief. The consumer is asked for a
verifiable account number. If none is provided and the consumer is
unable to produce verifiable documentation of the account (such as a
statement), the complaint is not pursued further. As described further
at part III.D.1.b below, when an issuer offers a reasonable basis to
challenge its identification, the Bureau does not plan to post the
relevant complaint to the public database unless and until the correct
issuer is identified. Furthermore, duplicate complaints from the same
consumer are consolidated into a single complaint.
The Bureau maintains additional controls after complaints are
submitted and issuers are able to alert the Bureau to any suspected
manipulation. If issuers find this combined package of controls
insufficient in practice, the Bureau will consider suggestions for
addressing any problems identified, including enabling an issuer to
flag in the public database any complaint entry that the issuer
reasonably believes is not submitted in good faith by or on behalf of
an individual consumer.
D. The Impact of Specific Public Database Fields on Consumers and
Credit Card Issuers
1. Issuer Names
a. Legal Authority
Several trade associations commented that the Bureau lacks
authority to include issuer names in the public database or its own
data reporting. The associations argue that the disclosure of this
information is prohibited by Section 1022(c)(8), which requires the
Bureau to take steps to protect from public disclosure confidential
proprietary information that is exempt from disclosure under the FOIA.
Specifically, they argue that the names of issuers are properly subject
to Exemption 4 of the FOIA, which permits agencies to withhold trade
secrets or confidential commercial information that businesses provide
to it, and that the Bureau must, therefore, withhold from publication
the names of credit card issuers cited in complaints. Courts generally
hold that Exemption 4 applies when the submission of confidential
commercial information is required of a business and the disclosure of
such information would result in competitive harm to the business or
would impair the ability of
[[Page 37563]]
an agency to obtain similar information in the future. The associations
argue that both of these prongs--competitive harm and impairment--are
satisfied with respect to the disclosure of credit card issuer names.
They argue that the disclosure of issuer names would make issuers
reluctant to respond (and/or reticent in responding) to consumer
complaints and would cause competitive harm if the disclosed complaints
unfairly or misleadingly identify them as bad actors.
The Bureau does not agree that issuer names are subject to
Exemption 4. As a threshold matter, Exemption 4 does not protect the
names of credit card issuers because such information does not
constitute ``confidential'' commercial information. The identities of
the credit card issuers who do business with consumers are not
typically secrets kept by the credit card issuers. By and large,
consumers know this information and report it to the Bureau in their
complaints. Even to the extent that the true names of credit card
issues are not known to consumers when they file their complaints, this
information typically becomes known to consumers as part of the
complaint investigation and resolution process. Information which is in
the public domain is not ``confidential'' and is therefore not subject
to Exemption 4.\26\
---------------------------------------------------------------------------
\26\ See CNA Fin. Corp. v. Donovan, 830 F.2d 1132, 1154 (D.C.
Cir. 1987) (``To the extent that any data requested under FOIA are
in the public domain, the submitter is unable to make any claim to
confidentiality--a sine qua non of Exemption 4'') (italics in
original); Northwest Coal. for Alt. to Pesticides v. Browner, 941 F.
Supp. 197, 202 (D.D.C. 1996) (``If the information at issue is
publicly available through other sources, no showing of competitive
harm can be made.'').
---------------------------------------------------------------------------
Further, even if one assumed that the names of credit card issuers
constitute ``confidential'' commercial information, this information
still does not qualify for protection under Exemption 4. To qualify for
such protection, information must be likely either: ``(1) To impair the
Government's ability to obtain necessary information in the future; or
(2) to cause substantial harm to the competitive position of the person
from whom the information was obtained.''\27\ The Bureau concludes that
the information at issue does not satisfy either prong of this test.
---------------------------------------------------------------------------
\27\ Nat'l Parks and Conservation Ass'n v. Morton, 498 F.2d 765,
770 (D.C. Cir. 1974).
---------------------------------------------------------------------------
First, the proposed disclosure of credit card issuer names is
unlikely to impair the Bureau's ability to obtain similar information
in the future. As noted above, it is usually consumers who provide the
Bureau with the names of credit card issuers to which their complaints
pertain. The decision by consumers to submit complaints against
particular credit card issuers is not likely to be affected by the
Bureau's policy of disclosing the names of the issuers to which
complaints apply. The Bureau also finds unavailing arguments that its
proposed policy of disclosing issuer names would make issuers reluctant
to participate further in the resolution of consumer complaints.
Section 1034 of the Dodd-Frank Act requires issuers to respond to
consumer complaints. Courts generally agree that the disclosure of
information will not impede an agency's efforts to obtain such
information in the future when the information is provided pursuant to
statutory obligation.\28\
---------------------------------------------------------------------------
\28\ See Ctr to Prevent Handgun Violence v. Dep't of the
Treasury, 981 F. Supp. 20, 23 (D.D.C. 1997).
---------------------------------------------------------------------------
Second, the Bureau disagrees with commenters that the proposed
policy of disclosing credit card issuer names is likely to cause credit
card issuers substantial competitive harm. It is conceivable that
consumer complaints could contain false or misleading allegations
against a particular credit card issuer and that publication of the
names of credit card issuers associated with such complaints could
expose those issuers to unwarranted public criticism, reputational
harm, and perhaps even a loss of existing or prospective customers.
However, such harms can be mitigated through the use of disclaimers
that warn consumers that the public database contains data reflecting
unverified complaints that consumers submit to the Bureau. Even to the
extent that such disclaimers are not sufficient to mitigate these
harms, courts are clear that Exemption 4 is designed to protect against
harms that flow from competitors' use of the released information, not
from any use made by the public at large or by customers.\29\ Thus,
even the prospect of unwarranted public criticism and harassment,\30\
embarrassment,\31\ or distortions of the disclosed information,\32\ are
not grounds for application of Exemption 4. Moreover, any harm that
arises from publishing the names of credit card issuers is one that all
issuers in the industry share. Harms shared among competitors do not
constitute competitive harms for purposes of Exemption 4.\33\
---------------------------------------------------------------------------
\29\ See id.
\30\ See id.
\31\ See Gen. Elect. Co. v. Nuclear Regulatory Comm'n, 750 F.2d
1394, 1402 (7th Cir. 1984) (``[T]he competitive harm that attends
any embarrassing disclosure is not the sort of thing that triggers
exemption 4.'').
\32\ See Silverberg v. Dep't of Health and Human Svcs, Civ. A.
No. 89-2743, 1991 WL 633740, at *4 (D.D.C. Jun. 14, 1991) (holding
that business ``may suffer embarrassment from potential distortions
of [the disclosed] information, but the case law is clear that the
government can not withhold confidential information under Exemption
Four of FOIA on the grounds it may cause embarrassment'').
\33\ See People for the Ethical Treatment of Animals v. Dep't of
Agric., No. Civ. 03 C 195-SBC, 2005 WL 1241141, at *7 (D.D.C. May
24, 2005) (holding that competitive harm would not arise from
disclosure of information where ``all banks would suffer the same
alleged harm'').
---------------------------------------------------------------------------
The associations also argue that FOIA Exemption 8 requires the
Bureau to protect the names of issuers from disclosure. Exemption 8
authorizes Federal financial regulators to protect information relating
to the examination of financial institutions. The associations contend
that consumer complaints constitute confidential supervisory
information and that the disclosure of these complaints would threaten
the regulatory relationship between financial institutions and the
Bureau.
The Bureau disagrees. As noted, Exemption 8 protects information
that is ``contained in or related to examination, operating, or
condition reports prepared by, on behalf of, or for the use of an
agency responsible for the regulation or supervision of financial
institutions.'' \34\ The scope of this exemption is broad in that it
applies not only to financial institution examination, operating, or
condition reports, but also to all manner of information that relates,
even indirectly, to the supervision process. Notwithstanding the
breadth of Exemption 8, it typically applies only to information that
supervisory agencies either generate themselves or receive from
regulated financial institutions or from other supervisory agencies.
Exemption 8 does not typically apply to information, like credit card
issuer names, that consumers supply to supervisory agencies outside of
the supervisory context, except to the extent that the agencies later
utilize such information for supervisory purposes.
---------------------------------------------------------------------------
\34\ 5 U.S.C. 552(b)(8).
---------------------------------------------------------------------------
Commenters argue otherwise by citing a 1991 FOIA request response
letter that the Office of the Comptroller of the Currency (``OCC'')
sent to a FOIA requester.\35\ In the letter, the OCC applies Exemption
8 to deny a request for the names of banks associated with consumer
complaints received by the OCC. As its primary authority for its
decision, the OCC cites an unpublished 1988 district court opinion in
Consumers Union v. Office of the Comptroller of the Currency.\36\ In
that case, the court applied the following
[[Page 37564]]
rationale to protect the identities of banks named in consumer
complaints:
---------------------------------------------------------------------------
\35\ OCC Interpretive Ltr., 1991 WL 338374 (Jan. 14, 1991).
\36\ No. 86-1841, slip. op. (D.D.C. Mar. 11, 1988).
Irrespective of the fact that consumers provided the information
to defendant and that disclosure of the identities of the banks
against which complaints were made probably would not undermine
public confidence, the portion of the computer printout to which
plaintiff seeks access falls under exemption 8 because this
information is directly derived from and `contained in * * *
examination reports * * * prepared by, * * * or for the use of'
defendant. The uncontroverted evidence shows that the bank charter
numbers in the computer printout are contained in examination
reports that fall within the meaning of Exemption 8 because the bank
charter numbers are matters contained in larger reports, reflecting
all consumer complaints against banks, which defendant forwards to
its District offices. These larger reports are `examination reports'
within the meaning of Exemption 8 because they analyze and summarize
information concerning consumer complaints.\37\
---------------------------------------------------------------------------
\37\ Id. at 2-3.
Unlike the complaint information at issue in Consumers Union,
however, the information at issue here is not part of an examination
report. Also, it is not presented within the context of a Bureau
investigation of issuer conduct. Rather, the complaints exist in raw
form as part of a database intended for public use and study.
Accordingly, the Bureau does not believe that Consumers Union is
analogous.
b. Other Comments on Issuer Name Disclosure
Consumer groups commented that the disclosure of issuer names
represents a significant aspect of the Bureau's policy. They noted that
other complaint databases that disclose the identity of specific
companies--like NHTSA--have created pressure on companies to improve
whatever metrics are measured by the public database. As a result,
these groups expect the Bureau's public database to cause issuers to
compete more effectively on customer service and product quality.
Together with privacy and open government groups, consumer groups
commented that outside groups can use the issuer data to help consumers
make more informed decisions about credit card use, a factor also cited
by the numerous consumers who submitted comments through the open
government organization, OMB Watch.
Industry groups disputed that disclosing issuer names serves these
or any policy purposes. They commented that this form of disclosure
would unfairly damage issuers' reputation and competitive position. One
trade association indicated that the inclusion of issuer names could
implicate safety and soundness concerns, particularly in light of viral
media. Another commented that disclosing issuer names would serve only
as ``fodder for plaintiffs' lawyers.'' One noted that the public
database would not take account of the size and nature of the credit
card business at different financial services providers, which would
cause consumer confusion. Another suggested that debt sellers would
attract fewer complaints than issuers that collected their own debts.
Trade groups agreed that if issuer names were included, they should
be verified. Several noted that consumers would be particularly likely
to name the merchant or other partner in connection with private label
or co-brand cards, and not the actual issuer. Some noted that card
numbers would not be sufficient for verification because the system
will accept complaints without a number, and some complaints--like
declined application complaints--will arise even when there is no card
number. Several trade associations argued that some complaints are
really merchant disputes and that the issuer should not be named at
all.
The Bureau believes that these industry comments fail to
acknowledge the system controls that are in place to verify that a
complaint is from a cardholder and that the issuer is properly
identified. No issuer will be associated with a complaint if it offers
a reasonable basis to dispute a commercial relationship with the
consumer. Currently, the Complaint System provides issuers 15 days to
contest issuer identity, which experience has shown to be sufficient.
As noted earlier, there are also system controls to avoid double-
counting duplicate complaints from the same consumer.
For many complaints, credit card account numbers provide a reliable
method to verify the identity of the issuer. The Bureau agrees that
some complaints may identify the issuer as the merchant or other
partner associated with a co-brand or private label card. In such
cases, the account number provided will not match to the name provided.
As a result, the Bureau confirms the account number with the consumer,
then substitutes the name of the correct issuer. The merchant or other
partner is not named. The Bureau also recognizes that there are cases
in which no credit card number is available to the consumer, such as
declined application complaints. In these cases, the Bureau works
directly with the consumer to identify the correct issuer from issuer
correspondence. If the correct issuer cannot be identified in this
manner, the case will be closed and no data added to the public
database.
The Bureau acknowledges, as it did in connection with the proposed
Policy Statement, that there are significantly varying views among
stakeholders about whether this kind of data is useful to consumers.
However, the Bureau continues to believe that this disclosure may allow
researchers to inform consumers about potentially significant trends
and patterns in the data. In addition, given that companies have made
competitive use of other public databases, the Bureau anticipates that
disclosure has the potential to sharpen competition over product
quality and customer service.
Furthermore, as several trade associations conceded and as
previously noted above, Congress itself recognized that the Bureau may
properly use consumer complaint data to set supervision, enforcement,
and market monitoring priorities.\38\ If the Bureau is able to use
complaint data in this way, there is good reason to allow consumers and
outside researchers to weigh the importance of complaint data in their
own research, analysis, and decision-making. Outside review of this
kind will also help ensure that the Bureau remains accountable for
tackling the complaints that it receives.
---------------------------------------------------------------------------
\38\ See, e.g., 12 U.S.C. 5493(b)(3)(D).
---------------------------------------------------------------------------
Finally, the Bureau notes the general acceptance by consumer and
industry groups that normalization can improve data utility. Thus,
although trade associations uniformly opposed the release of issuer
names in the public database, many recognized the importance of
normalizing the data that the Bureau decides to release. Only a
minority of trade groups suggested that normalization was not workable
and urged that issuer names not be disclosed for this reason as well.
One association suggested that normalization cover open accounts,
closed accounts with a balance, accounts without a balance that closed
within the last year, and prospective accounts declined within the last
year. Consumer groups also recognized the importance of normalizing
data, but none offered any indication of the appropriate metrics for
market share. The Bureau agrees with industry commenters that, if
possible, normalization should make some account for closed accounts
with a balance and declined applications because these may generate
complaints. The Bureau intends to work further with commenters on
specific normalization
[[Page 37565]]
proposals, and welcomes further operational suggestions on the point.
2. Zip Codes
Consumer groups commented that the Bureau should add additional
location fields, such as city and census tract. Several trade
associations, however, commented that zip code disclosure created risks
to privacy because zip codes can be combined with other data to
identify consumers, particularly in sparsely-populated rural zip codes.
Trade associations also commented that zip code data may be
misunderstood to imply discriminatory conduct, leading to unfounded
allegations of discrimination.
The Bureau is mindful of the privacy implications of zip code
disclosure. As a result, it will limit zip code disclosures to 5
digits, even if a consumer provides the full 9-digit zip code.
Furthermore, as it analyzes narrative disclosure, the Bureau will
account for zip code disclosures in assessing privacy risks. The Bureau
will also analyze whether there are ways to disclose more granular
location fields without creating privacy risks, as suggested by some
commenters.
The Bureau may, as one trade group noted, investigate zip code data
for indications of ``improper trends.'' The Bureau believes that
consumers and outside researchers should have the same opportunity.
3. Discrimination
Several trade associations warned against disclosure of any data
that consumers submit in the discrimination field of the complaint
form. These groups commented that in light of the seriousness of such
allegations, the Bureau should not disclose this field unless and until
it has investigated the allegations and determined that they have
factual support. In support of their position, these commenters note
that some consumers who check the discrimination field on the intake
form fail to include any allegations of discrimination in the narrative
field.
The Bureau is continuing to refine its methods for identifying
discrimination allegations from consumers that submit complaints.
Accordingly, the Bureau does not plan to disclose discrimination field
data in the public database at this time. In the interim, the Bureau
will continue to study the conditions, if any, necessary for the
appropriate disclosure of such information at the individual complaint
level. The Bureau may also report discrimination data at aggregated
levels in its own periodic complaint data reports.
4. Type of Credit Card Issue
Trade and consumer groups agreed that the Bureau could improve this
data field in several respects. First, a consumer should be able to
select several issues for a given complaint. Second, the issue
categories should be better explained and differentiated. One trade
association also commented that the Bureau should not rely on consumers
for this data point.
The Bureau agrees that a consumer should be able to ``tag'' a
complaint as implicating more than one issue. It is working to develop
the required functionality. In addition, the Bureau is weighing
possible improvements to the issue categories and is considering the
extent to which Bureau staff should ``tag'' complaints as raising
certain issues. The Bureau welcomes further input from stakeholders on
how to improve the issue categories.
5. Issuer Disposition
Consumer groups commented on the need to include data about the
issuer's response, the consumer's assessment of that response, and the
timing of each of those steps, so that a user of the public database
would know how fast complaints are handled and how often an issuer
response is disputed. Consumer groups also urged the addition of more
resolution-related data categories, such as categories that would
explain why a complaint remains unresolved.
Several trade associations commented that the ``Closed without
relief'' issuer response category was not meaningful and should be
revised. These groups claimed that the category suggests an
inappropriate response even though certain complaints are appropriately
closed without any form of relief, such as meritless complaints or
complaints that have already been appropriately handled by means of the
issuer's internal complaints process. In addition, there will be
complaints appropriately closed with non-monetary relief, which, under
the Bureau's current system, do not meet the monetary criteria for
``Closed with relief.'' As a result, trade groups expressed concern
that resolution rates would be undercounted. On that basis, some trade
groups asked the Bureau to restore its prior resolution-related
categories: full, partial, and no resolution. Others urged that the
Bureau subdivide the ``Closed with relief'' category into monetary and
non-monetary relief subcategories.
In light of these comments, the Bureau has made several changes to
the Complaint Systems' issuer response categories.\39\ First, where an
issuer provides relief to the consumer, the issuer may categorize the
complaint as either ``Closed with monetary relief'' or ``Closed with
non-monetary relief.'' To qualify for the ``Closed with monetary
relief'' category, the company's response must provide objective and
verifiable monetary relief that is measurable in dollars. To qualify
for ``Closed with non-monetary relief,'' the response must provide the
consumer with objective and verifiable relief that does not meet the
definition of monetary relief. These categories reduce any risk that
reviewers fail to accord appropriate significance to cases that issuers
close with non-monetary relief. Second, the Bureau has added a ``Closed
with explanation'' response category, which may be used when the issuer
believes that the complaint does not merit substantive relief, and
instead provides a full explanation to that effect to the consumer.
This category recognizes that in some instances, a thorough explanation
will serve to resolve the consumer's complaint. At the same time, it
allows reviewers and consumers to see in more detail how issuers,
collectively and separately, resolve the complaints filed against
them.\40\
---------------------------------------------------------------------------
\39\ Consumer Response has provided detailed guidance to
institutions participating in the Complaint System regarding these
changes. Institutions should not rely on the summary description
provided herein.
\40\ If the company provides no substantive or explanatory
response, it must designate the complaint as ``Closed.'' In
conjunction with the ``Closed with explanation'' category, this
residual category differentiates issuers that--having opted against
substantive relief--choose not to explain their conduct to
consumers.
---------------------------------------------------------------------------
6. Date Fields
Finally, the Bureau agrees with the commenters who urged the
inclusion of relevant dates in the public database. Initially, the
Bureau will be able to include the date that a complaint is sent to the
Bureau and the date that the Bureau forwards it to the relevant
company.\41\ The Bureau is currently developing the technical ability
to publish other date fields including the date that a company
responds. When this is feasible, the Bureau plans to include additional
date fields in the public database.
---------------------------------------------------------------------------
\41\ There may be a lag between the two dates in part because,
as noted above, consumers do not always submit complaints with
sufficient information. In addition, some complaints are received
via channels that trigger additional processing steps at the Bureau.
For example, a Web-based complaint will move to the relevant company
faster than a hard-copy complaint received from another agency that
must be input into the Bureau's Web-based system.
---------------------------------------------------------------------------
[[Page 37566]]
E. Potential Impacts of Undisclosed Fields
The Bureau received a number of comments about data fields that the
proposed Policy Statement did not list for disclosure in the public
database. The Bureau is not shifting any of these fields into the
disclosed category in the final Policy Statement, though several fields
remain under assessment for potential inclusion at a later date.
1. Consumer Narratives
The issue of disclosing consumer narratives generated the most
comments. Each consumer comment letter submitted by OMB Watch requested
access to narratives ``to help me make better financial decisions and
avoid bad actors.'' Consumer, civil rights, open government, and
privacy groups uniformly supported disclosure on the grounds that it
would provide consumers with more useful information on which to base
financial decisions and would allow reviewers to assess the validity of
the complaint. As noted, these groups submitted a coordinated proposal
that would give the consumer a default option to submit narrative
information for public disclosure. Recognizing the need to protect
privacy interests, the commenters' proposal calls for the Bureau to use
algorithms to detect personally identifiable information in narratives
slated for disclosure, with back-up manual review by staff and
consumers of any narratives that the algorithm identifies. Subject to
FOIA limitations, however, the proposal would also provide a consumer
the chance to opt out of narrative disclosure, in whole or in part.
Narratives that the consumer opts out would not be disclosed in the
normal course.
The two privacy groups expounded on privacy risks in the most
detail, echoing the Bureau's acknowledgment that a detailed narrative
may enable re-identification even if it does not contain standard
personally identifiable information like a name or account number. One
privacy group noted that the privacy risk from ``non-identifiable''
data is increasing all the time. The other noted that after it
established its own online complaint system, it received a number of
``extraordinarily detailed and unique complaints'' that would have been
inappropriate to disclose without express consent and heavy redaction
or summarization. Although this group supported disclosure on an opt-in
basis, it urged the Bureau to study a large sample of complaint
narratives before resolving on its final course.
Trade groups and industry commenters uniformly opposed disclosure
of consumer narratives. Several suggested that if the Bureau resolved
to disclose narratives, it might inadvertently disclose personally
identifiable information, with potentially significant consequences to
the affected individuals. These commenters also argued that narrative
disclosure might undermine the Bureau's mission to the extent that
consumers, fearing potential disclosure of their personal financial
information, became reluctant to file complaints. Some industry
commenters argued against narrative opt-ins or opt-outs, claiming that
consumers would not take time to read them or to understand the
consequences of their choices. One privacy group also cautioned against
the use of opt-in or opt-out approaches on grounds that consumers do
not generally understand them and will usually select the default
option, undermining the notion that a consumer has thereby
``consented'' to publication. As a result, the privacy group urged that
the Bureau explore the use of data agreements, whereby users could have
access to select narratives subject to a contractual agreement not to
attempt re-identification.
While acknowledging the general lack of consensus in this area, the
Bureau notes that almost all commenters agreed that the privacy risks
of narrative disclosure must be carefully addressed if narrative
disclosure is to take place. Accordingly, the Bureau will not publish
narrative data until such time as the privacy risks of doing so have
been carefully and fully addressed. In addition to assessing the
feasibility of redacting personally identifiable information (``PII'')
and other re-identifying narrative information, by algorithmic and/or
manual methods, the Bureau will carefully consider whether there are
ways to give submitting consumers a meaningful choice of narrative
disclosure options.
2. Responsive Issuer Narratives
Consumer groups argued that issuers should have the same ability as
consumers to offer their responsive narratives for either public
disclosure or private communication to the consumer. According to these
commenters, this mechanism would protect consumer privacy, allow for
effective communication between consumers and issuers, and permit
issuers to respond publicly to public complaint narratives. Trade
associations disagreed, arguing that the Gramm-Leach-Bliley Act
prohibits them from publicly disclosing any PII about their customers.
In light of the Bureau's current disclosure position on consumer
narratives, however, the Bureau is not resolving this issue at this
point.
F. Addition of New Data Fields
Several consumer groups requested the Bureau to add new data fields
for collection and disclosure via the public database. One group
suggested that the database identify the specific card product, not the
issuer alone. As noted, several groups urged that location data be
provided at the city or census tract level to help identify
discriminatory practices. To that same end, several groups urged the
collection of demographic data on a voluntary basis.
The Bureau is open to the inclusion of additional data fields and
will continue to work with external stakeholders to address the value
of adding such fields. The Bureau notes, however, that additional data
categories will logically fall into one of two groups, each of which
implicates different policy concerns and trade-offs. First, the Bureau
can disclose new data fields by adding them to the intake form for
consumers to complete. These fields impose additional burden on the
consumer and may make the submission of a complaint that much less
likely. Second, the Bureau can derive additional data fields from a
complaint submitted on the existing intake form. Thus, the Bureau could
tag complaints by issue or by other criteria. New fields of this type
would not impose a burden on consumers, but they would impose an
additional burden on the Complaint System and the Bureau's resources.
G. When Complaint Data Will Be Added to the Public Database
One consumer group commented that data should be uploaded 10 days
after the submission of a complaint. This group also urged that the
issuer be required to respond substantively to the complaint within
that same 10-day window.\42\ Several trade associations, however, noted
that the complaint process may allow up to 60 days for a substantive
response and, on that basis, argued that data for a given complaint
should not be uploaded until the 60-day period has run. Finally, one
privacy group endorsed the proposed 30-day lag between a consumer
submitting a complaint and the Bureau adding the applicable data to the
public database.
---------------------------------------------------------------------------
\42\ Under the Bureau's current system, the company has 15 days
from its receipt of the complaint to state its initial response to
that complaint. That initial response can seek up to an additional
45 days to finalize the response.
---------------------------------------------------------------------------
The Bureau's rationale for the 30-day lag was to ensure that
issuers have
[[Page 37567]]
sufficient time to determine whether they are the identified issuer
before any data about the complaint is disclosed. Experience shows,
however, that issuers do not need more than 15 days from their receipt
of the complaint to make this determination. As a result, the Bureau
proposes to revise the posting schedule. Under the revised approach,
the Bureau will add field data subject to disclosure to the public
database once the issuer has made a timely response within the 15-day
window (``Closed with monetary relief,'' ``Closed with non-monetary
relief,'' ``Closed with explanation,'' ``Closed'' or ``In progress'')
or has failed to make any response within 15 days. This means that
almost all complaints will be subject to posting at or before the 15-
day mark, improving the timeliness of data in the public database.
However, if the company can make a reasonable showing within the 15
days that the consumer's identification is incorrect, the complaint
will not be published unless and until the correct issuer is
identified.\43\
---------------------------------------------------------------------------
\43\ The Bureau will consider requests for more than 15 days to
determine identity only on an exceptional, case-by-case basis. If
the Bureau were to authorize such an extension, it would not post
the relevant complaint to the database in the interim.
---------------------------------------------------------------------------
Once data for a given complaint has been posted to the public
database, any new data fields for that complaint will be added to the
public database as they become available. Thus, if a company makes a
late response, its response will be included in the public database,
but that response would also show as untimely. The Bureau currently
proposes to update the public database once each day, subject to the
initial lag period that applies to a given complaint.
H. Posting Data for Complaints Submitted to Other Regulators
One consumer group commented that the public database should
include data on complaints that the Bureau forwards to other agencies.
This group also commented that the Bureau should encourage other
agencies to submit complaints to the same public database.\44\
---------------------------------------------------------------------------
\44\ Along the same lines, one trade group objected to the
disclosure of issuer names in part because the Bureau's database
would only include complaints against larger financial institutions.
---------------------------------------------------------------------------
The Bureau agrees that the utility of the public database would be
improved by the inclusion of as many complaint records as possible. As
a result, it is open to other regulators providing parallel complaint
data for inclusion in the public database. Until that can be achieved,
however, the Bureau does not believe it would be that useful to include
referred complaints in the public database. The Bureau would not be
able to describe how and when a referred complaint was responded to, or
whether the consumer accepted or disputed the outcome. In addition, the
Bureau would not have verified the existence of a commercial
relationship between the company and the consumer.
I. Public Database Tools
Consumer groups recommended a number of particular tools for
accessing the public database. One group urged that the tools directly
generate ranking data. Another argued that the access system should be
able to generate percentage shares for one variable in terms of
another.
The Bureau will use a data platform to make the complaints publicly
available. This platform has a number of important features. First,
users can search and filter the data across any of the data fields.\45\
Second, users can build their own data visualizations, which can then
be embedded on other Web sites and shared via social media. These
visualizations can stay up-to-date with the Bureau's public database as
it receives new data. This makes it easy for reviewers to disseminate
information from the database, reducing transaction costs in the
marketplace of ideas. Third, the platform allows users to submit public
comments for potential refinements and improvements to the public
database. Fourth, the data will be provided in a machine-readable
format via an Application Programming Interface. This will allow third
parties to build their own tools for leveraging the data, further
reducing transaction costs and improving dissemination.
---------------------------------------------------------------------------
\45\ For example, the system will enable a user to know the 5-
digit zip code distribution of all billing dispute claims, or the
complaint-type distribution of all complaints associated with one
issuer or one time period.
---------------------------------------------------------------------------
J. Extension of Policy Statement to Complaint Data for Other Consumer
Products and Services
The Concurrent Notice published in the Federal Register describes
the Bureau's proposal to extend the Policy Statement to all consumer
products and services within the Bureau's jurisdiction. Responsive
comments are due on or before July 19.
IV. Final Policy Statement
The text of the final Policy Statement is as follows:
1. Purposes of Credit Card Complaint Data Disclosure
The Bureau receives credit card complaints from consumers. The
Bureau intends to disclose certain information about credit card
complaints in a public database and in the Bureau's own periodic
reports.
The purpose of this disclosure is to provide consumers with timely
and understandable information about credit cards and to improve the
functioning of the credit card market. By enabling more informed
decisions about credit card use, the Bureau intends for its complaint
data disclosures to improve the transparency and efficiency of the
credit card market.
2. Public Access to Data Fields
Data from complaints that consumers submit will be uploaded to a
publicly accessible database, as described below.
a. Complaints Included in the Public Database
To be included in the public database, complaints must: (a) Not be
duplicative of another complaint at the Bureau from the same consumer;
(b) not be a whistleblower complaint; (c) within the scope of the
Bureau's authority under section 1025 of the Consumer Financial
Protection Act; and (d) be submitted by a consumer (or his or her
authorized representative) with an authenticated commercial
relationship with the identified issuer. The public database will
initially include data from credit card complaints submitted on or
after June 1, 2012.
b. Fields Included in the Public Database
For included complaints, the Bureau will upload to the public
database certain non-narrative fields that do not call for PII. The
Bureau plans to include these fields:
(i) Bureau-assigned unique ID number;
(ii) Channel of submission to Bureau;
(iii) Date of submission to Bureau;
(iv) Consumer's 5-digit zip code;
(v) Subject matter;
(vi) Date of submission to company;
(vii) Company name;
(viii) Company response category;
(ix) Whether the company response was timely; and
(x) Whether the consumer disputed the response.\46\
---------------------------------------------------------------------------
\46\ Additional fields remain under consideration for potential
inclusion.
---------------------------------------------------------------------------
The consumer generates data for fields (iv), (v), (vii), and (x).
The Bureau will authenticate the consumer's identification of the
relevant company
[[Page 37568]]
in field (vii), and finalize the entry in that field as
appropriate.\47\ The Bureau intends to use the name of the issuer as
disclosed in Nilson Report data on the credit card market. If a company
demonstrates by the 15-day deadline that it has been wrongly
identified, no data for that complaint will be posted unless and until
the correct issuer is identified. At the 15-day mark, however, the
Bureau will post the complaint data with the originally identified
issuer in field (vii) so long as the Bureau has card number or
documentary data to support the identification. If the Bureau cannot
reasonably identify the company, however, the complaint will be closed
without posting to the public database.
---------------------------------------------------------------------------
\47\ The consumer's card number generally will enable
authentication of the correct issuer. If a card number is not
available, the Bureau works directly with the consumer to identify
the correct issuer from issuer correspondence such as statements or
letters. If the correct issuer cannot be identified in this manner,
no data is posted to the database.
---------------------------------------------------------------------------
The complaint system automatically populates the two date fields,
(iii) and (vi). The Bureau completes fields (i), (ii), and (ix).\48\
The issuer completes field (viii). If it selects ``Closed with monetary
relief'' for field (viii), the issuer will also enter the amount of
monetary relief provided, although that information will not be
included in the public database.\49\ Field (viii) will show as ``In
progress'' if the issuer responds with a request within 15 days for the
full 60-day response period. The issuer's later response will then
overwrite the ``In progress'' data entry.
---------------------------------------------------------------------------
\48\ If a response is untimely, at either the 15 or 60-day mark,
field (ix) will show that the issuer did not respond on a timely
basis. The issuer's substantive response, if it eventually makes
one, will still be shown in field (viii), but the untimeliness entry
will remain.
\49\ The Bureau is not planning to disclose the consumer's
claimed amount of monetary loss and, as a result, believes it would
be inappropriate to disclose, in the individual case, the amount of
relief provided by the issuer. The Bureau, however, may include non-
individual data on monetary relief in its own periodic reports. The
Bureau has determined not to include the consumer's claimed amount
of monetary relief because a review of complaints shows that
consumers have had difficulty stating the amount and prefer to
provide a narrative description of the relief that they believe to
be appropriate.
---------------------------------------------------------------------------
c. When Data Is Included in the Public Database
The Bureau will generally add field data to the public database for
a given complaint within 15 days of forwarding the complaint to the
company in question. If the company responds ``Closed with monetary
relief,'' ``Closed with non-monetary relief,'' ``Closed with
explanation,'' ``Closed,'' or ``In progress'' before the 15-day
deadline for response, the Bureau will then post applicable data for
that complaint to the public database. If the company fails to respond
at all by the 15-day deadline, the Bureau will also post data for that
complaint at that point. In this case, the issuer response category
field will be blank and the untimely response field will be marked. As
noted above, if a company demonstrates by the 15-day deadline that it
has been wrongly identified, no data for that complaint will be posted
unless and until the correct issuer is identified. Once the Bureau
discloses some data for a given complaint, it will add to the public
database any new complaint data that are subject to disclosure as they
become available. Subject to these various restrictions, data will be
posted to the public database on a daily basis.
d. Public Access
A public platform for the public database will enable user-defined
searches of the posted field data. Each complaint will be linked with a
unique identifier, enabling reviewers to aggregate the data as they
choose, including by complaint type, issuer, location, date, or any
combination of these variables. The data platform will also enable
users to save and disseminate their data aggregations. These
aggregations can be automatically updated as the public database
expands to include more complaints. Finally, users will be able to
download the data or leverage it via an Application Programming
Interface.
e. Excluded Fields
The public database will not include personally identifying fields
such as a consumer's name, credit card number, or address information
other than a 5-digit zip code. At least until it can conduct sufficient
further study, the Bureau will not post to the public database the
consumer's narrative description of ``what happened'' or his or her
description of a ``fair resolution.'' The Bureau also will not post a
company's narrative response. These narrative fields may contain
personally identifiable information or other information that could
enable identification. The possibility of disclosure may also suppress
complaints and/or reduce the specificity of complaint narratives,
potentially undermining the effectiveness of the complaint process. In
addition, the company's response may contain material protected from
disclosure under consumer privacy laws. The Bureau intends to study the
potential inclusion of narrative fields as described further in section
4 of this Policy Statement.
3. Regular Bureau Reporting on Complaints
At periodic intervals, the Bureau intends to publish reports about
complaint data, which may contain its own analysis of patterns or
trends that it identifies in the complaint data. So far, the Bureau has
published three reports containing aggregate complaint data.\50\ The
Bureau intends for its reporting to provide information that will be
valuable to consumers and other market participants. Before determining
what reports to issue beyond those relating to its own handling of
complaints, the Bureau will study the volume and content of complaints
that it has received in a given reporting period for patterns or trends
that it is able to discern from the data. If the data will support it,
the Bureau intends for its reports to include some standardized metrics
that would provide comparisons across reporting periods. The reports
will also describe the Bureau's use of complaint data across the range
of its statutory authorities during a reporting period. Because
monetary relief data will not be included in the individual-level
public database, the Bureau anticipates such data will be included at
non-individual levels in its own periodic reporting.
---------------------------------------------------------------------------
\50\ See note 2.
---------------------------------------------------------------------------
4. Matters for Further Study
Going forward, the Bureau intends to study the effectiveness of its
credit card complaint disclosure policy in realizing its stated
purposes. In addition, the Bureau will analyze the narrative fields
submitted by consumers and issuers. The analysis will assess whether
there are practical ways to disclose narrative data in a manner that
will improve consumer understanding without undermining privacy
interests or the effectiveness of the credit card complaint process and
without creating unwarranted reputational injury to issuers.
5. Effect of Policy Statement
This Policy Statement is intended to provide guidance regarding the
Bureau's exercise of discretion to publicly disclose certain data
derived from consumer complaints. The Policy Statement does not create
or confer any substantive or procedural rights on third parties that
could be enforceable in any administrative or civil proceeding.
Authority: 12 U.S.C. 5492(a), 5493(b)(3)(C), 5496(c)(4),
5511(b)(1), (5), 5512(c)(3)(B).
[[Page 37569]]
Dated: June 14, 2012.
Richard Cordray,
Director, Bureau of Consumer Financial Protection.
[FR Doc. 2012-15163 Filed 6-21-12; 8:45 am]
BILLING CODE 4810-AM-P