CONSUMER FINANCIAL PROTECTION BUREAU - PDF document

1 CONSUMER FINANCIAL PROTECTION BUREAU APR
CONSUMER FINANCIAL PROTECTION BUREAU APRIL2021 Complaint Bulletin C ountyleveldemographic overviewconsumer complaints ��1 CONSUMER FINANCIAL PROTECTION BUREAU Table of contentsTable of contentsIntroductionComplaint data2.1Complaint process2.2ConsiderationsComplaint analysisFuture workConsumer resources �� &#x/Att;¬he; [/;ott;&#xom ];&#x/BBo;&#xx [6;.68;&#x 55.;禙&#x 298;&#x.4 6;.72;&#x ]/S;&#xubty;&#xpe /;oot;r /;&#xType;&#x /Pa;&#xgina;&#xtion;&#x 000;&#x/Att;¬he; [/;ott;&#xom ];&#x/BBo;&#xx [6;.68;&#x 55.;禙&#x 298;&#x.4 6;.72;&#x ]/S;&#xubty;&#xpe /;oot;r /;&#xType;&#x /Pa;&#xgina;&#xtion;&#x 000;2 CONSUMER FINANCIAL PROTECTION BUREAU 1. IntroductionIn July 2011, the Consumer Financial Protection Bureau (CFPB) began accepting consumer omplaintsSince thenconsumers have submittedapproximately 2.9 millioncomplaints to the CF

2 PBabout a variety of consumer financial
PBabout a variety of consumer financial products and services, including more than 700,000 complaints since the declaration of thecoronavirus (COVID19) national emergency on March 13, 2020onsumer complaints are integral to the CFPB’s work. By collecting, investigating, and responding to consumer complaints, the CFPBheardirectly from consumersand can better understand the types of challenges theyare experiencing in the marketplaceThe also has insight into how companies are responding to their customers’ concernsThis information supports the CFPB’s work to supervise companies, enforce federal consumer financial laws, propose rules, identifyand assess emerging issues, and develop tools that help empower consumers to make informed financial decisions.In this Complaint Bulletin, the CFPBanalyzes complaints submitted by consumers by countyUsing race and ethnicity estimates from the U.S. Census 2019 American

3 Community Surveyach of the more than 3,0
Community Surveyach of the more than 3,000 counties in the United Stateshave been grouped based the white, nonHispanic percentage of the population.Counties where the nonwhite or Hispanic populationsmakeup 61or moreof the total population are referredto as “predominantly minority counties”; whereas, counties where the nonwhite or Hispanicpopulations make up SeeDoddFrank Wall Street Reform and Consumer Protection Act of 2010, Pub. L. No. 111203 (DoddFrank Act), Section 1002(4) (“The term ‘consumer’ means an individual or an agent, trustee, or representative acting on behalf of an individual.”).Id.1021(c)(2).This report is based on dynamic data and may differ from other public reports.SeeU.S. Census 2019 American Community Survey (“2019 American Community Survey”), available athttps://www.census.gov/programssurveys/acs The American Community Survey provides a wide range of im

4 portant statistics (e.g., race, ethnicit
portant statistics (e.g., race, ethnicity, education, language, employment, etc.) for every community in the nation.). ��3 CONSUMER FINANCIAL PROTECTION BUREAU 40% or lessof the total population are referred to as “predominantly white, nonHispanic counties”for the purposes of this Complaint BulletinKey findings of this bulletin include:In 2020, the CFPBreceived more complaints per capita from consumers living in predominantly minority counties.In 2020, consumers living in predominately minority counties submitted more complaints on a per capita basis in nearly every product category about which the CFPBaccepts complaints.From 2019 to 2020, complaints increased at a greater rate in predominantly minority countiescompared to predominantly white, nonHispanic countiesThis Complaint Bulletinis organized as follows. Section 2 provides an overview of the complaint data used in this report, as well a

5 s important considerations for this anal
s important considerations for this analysis. Section 3 summarizecomplaints submitted by consumers at the county level.Section 4describes the CFPB’s ongoing work to better understand the communities who are submitting complaints to the CFPBand how the problems they experience varyFinally, Section 5 highlights consumer resources the CFPBpublished during the pandemic. The 2019 American Community Survey reports onthe percentage of the population identifying as HispanicBlack or African AmericanAsian Native Hawaiian and Other Pacific IslanderSome other raceand Two or more races �� &#x/Att;¬he; [/;ott;&#xom ];&#x/BBo;&#xx [6;.68;&#x 55.;禙&#x 298;&#x.4 6;.72;&#x ]/S;&#xubty;&#xpe /;oot;r /;&#xType;&#x /Pa;&#xgina;&#xtion;&#x 000;&#x/Att;¬he; [/;ott;&#xom ];&#x/BBo;&#xx [6;.68;&#x 55.;禙&#x 298;&#x.4 6;.72;&#x ]/S;&#xubty;&#xpe /;oot;r /;&#xType;

6 &#x /Pa;&#xgina;&#xtion;&#x 000;4 CONSUM
&#x /Pa;&#xgina;&#xtion;&#x 000;4 CONSUMER FINANCIAL PROTECTION BUREAU 2. omplaint dataThis Complaint Bulletinrelies primarily on data provided duringthe consumer complaint process(Section 2.1)Information collected during that process provides a richdataset to study consumer problems in the marketplace; however, these data should be considered in thecontext which they are collectedand analyzed(Section 2.2)2.1Complaint processCongress directed the CFPBto facilitate the centralized collection of, monitoring of, and response to consumer complaints regarding consumer financial products or servicesThe CFPB’s Office of Consumer Response (Consumer Response) performs this statutorilymandated function, analyzingand sharingcomplaint datato inform the marketplace and to empower consumers to take more control over their financial lives.The CFPBreceives consumer complaints through its website, by referral from the White Hous

7 e, congressional offices, and other fede
e, congressional offices, and other federal and state agencies, and by telephone,mail, email, and fax.When consumers submit complaints online or over the phone, the CFPBasks them to identify the consumer financial product or service with which they have a problem, as well as the type of problem they are having with that product or service. The CFPBroutes consumers’ complaints about financial products and servicesand any documents they providedirectly to financial companies, and works to get consumers a timely response, generally within 15 daysThe CFPBexpects companies to provide complete, accurate, and timely responses tailored to the issues described in each consumer’s complaint. When a company cannot take action on a complaintbecause it was submitted by unauthorized third partieswas the result of fraud, scams or business identity theftor the company cannot confirm SeeDoddFrank Act § 1013(b)(3Id.In 20

8 20, consumers submitted complaints about
20, consumers submitted complaints about a variety of consumer financial products and services: credit or consumer reporting; debt collection; mortgages; credit cards; checking or savings accounts; student loans; money transfers, money services, and virtual currencies; vehicle loans or leases; personal loans; payday loans; prepaid cards; credit repair; and, title loans. ��5 CONSUMER FINANCIAL PROTECTION BUREAU a commercial relationship with the consumerthe company can provide an administrative response that includes a statement or other evidence supporting this response.As part of its commitment to transparency, the CFPBpublishes consumer financial product and service complaints that the CFPB sent to companies for responsein the Consumer Complaint Database Complaints are published after the company responds, confirming a commercial relationship with the consumer, or after 15 days, whichever comes firs

9 t. Complaints referred to other regulato
t. Complaints referred to other regulators, such as complaints about depository institutions with less than $10 billion in assets, are not published in the Consumer Complaint Database. Narratives from complaints are published if the consumer opts to share their narrativepublicly and after the CFPBtakes steps to remove personal information. For information about complaints and how the complaint process worksvisit consumerfinance.gov or read the 2020 Consumer Response Annual Report . 2.2onsiderationThis Complaint Bulletinprovidehighlevel overview of thecommunities from which the CFPBreceivcomplaints in 2020, based on countylevel demographic informationhere are certain limitations to this analysis, including:The CFPBdoes not collect race and ethnicityinformation during the complaint processonsumers provide their mailing address and have the option to provide their age and servicemember status10This information can be u

10 sedalong with other public informationap
sedalong with other public informationapproximate which communities are submitting complainto the CFPB Researchers have used the public Consumer Complaint Database to better understand experiences across different communitiesSee e.g., Raval, Devesh, Which Communities Complain to Policymakers? Evidence from Consumer Sentinel(Oct. 2020)Economic Inquiry, Vol. 58, Issue 4, pp. 16281642, available athttp://dx.doi.org/10.1111/ecin.12838 Begley, Taylor A. and Purnanandam, Amiyatosh, Color and Credit: Race, Regulation, and the Quality of Financial Services(Aug. 2020), available at http://dx.doi.org/10.2139/ssrn.2939923 Some researchers have also attempted to uncover differences in company responses across different communities. See e.g.Haendler, Charlotte and Heimer, Rawley, The Financial Restitution Gap in Consumer Finance: Insights from Complaints Filed with the CFPB (Jan. 2021), available at http://dx.doi.org/10.2139/

11 ssrn.3766485 This complaint bulletin wil
ssrn.3766485 This complaint bulletin will not look at outcomessuch as relief provided to consumers; instead, it will focus on complaint submission rates, changes to those rates over time, and the types of products consumersabout which consumers complain.Future work will analyze complaint information at a more granular level than what is published in the public Consumer Complaint Database Section 4) 10“Older consumers” and “servicemembers” are both selfidentified. Servicemembers refers to servicemembers, veterans, and military families. “Older consumers” refers to consumers who voluntarily reported their age as 62 or older. ��6 CONSUMER FINANCIAL PROTECTION BUREAU and to identifyvariationsor patternsin problems and issues thatdifferent communities experiencein the consumer financial marketplace.For this analysis, the CFPBrelies on countylevel race and ethnicity information.

12 Ongoing and future work will explore ZI
Ongoing and future work will explore ZIPcodeand census tractlevel information to analyzecomplaint demographics at a more granular level. The results of this Complaint Bulletin are consistent withother studies examining communities thatsubmitcomplainto policymakers.11In Section 3, complaint counts are sometimes expressed on a per capita basis, based on the population of the county, not the number of consumers of the product in the countyue per capita value would consider only the numberof participants in a given marketFor examplecredit card complaints would be expressed as a count per credit card holders 11See e.g., Raval, Devesh, supranote 9 study examined data from the Consumer Sentinel Networkand found higher complaint rates in more heavily Black, more educated, higher income, older, and more urban communities, and higher rates of complaints from Black and college educated communities for complaints submitted to

13 the CFPBcompared to the Federal Trade C
the CFPBcompared to the Federal Trade Commission or the Better Business Bureaus �� &#x/Att;¬he; [/;ott;&#xom ];&#x/BBo;&#xx [6;.68;&#x 55.;禙&#x 298;&#x.4 6;.72;&#x ]/S;&#xubty;&#xpe /;oot;r /;&#xType;&#x /Pa;&#xgina;&#xtion;&#x 000;&#x/Att;¬he; [/;ott;&#xom ];&#x/BBo;&#xx [6;.68;&#x 55.;禙&#x 298;&#x.4 6;.72;&#x ]/S;&#xubty;&#xpe /;oot;r /;&#xType;&#x /Pa;&#xgina;&#xtion;&#x 000;7 CONSUMER FINANCIAL PROTECTION BUREAU 3. Complaint analysishis Complaint Bulletinrelieson demographic estimates from the U.S. Census 2019 American Community Surveyto divide counties into one of five groups based on minority percentage12Minority percentage was calculated for each countby dividing the nonwhiteHispanic population by the total population13ounties where thetotalpercentage of these values w61%or more are considered predominantly minority counties. Counties w

14 here the total percentage was less than
here the total percentage was less than or equal to 40% are considered predominantly white, nonHispanic communities.Each complaint was mapped to a county, using the mailing address provided by the consumer in their complaint submission, which was thenassigned to one offive groups20%, 2140%, 4160%, 6180%, and 81100% minority. For example, a complaint submitted by a consumer who reported a mailing address in Chicago, Illinois (Cook Countywas assigned to the 41%60% groupComplaints where theaddress could not be mapped were excluded from this analysis.14COUNTIES BY MINORITY PERCENTAGEFigure 1shows the county breakdown based on information provided in the American Community Survey. In this figure, range denotes predominantly minority countiesand blue denotes predominantly white, nonHispaniccounties 12See2019 American Community Surveysupranote 13Id.14Approximately % of complaints received during 2020 are excluded from thi