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Government watch
CFPB:
What It Means to Be a Data-Driven Agency
ViewpoinT
By Tristram Wolf, Ballard Spahr LLP
In Viewpoints, payments professionals share their perspectives on the industry. Paybefore’s goal is to present many points of view to o er readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore. This article is intended for general information purposes only and should not be construed as legal advice. Readers are urged not to act upon the information without rst consulting
an attorney.
The Consumer Financial Protection Bureau fre- quently represents itself as a “data-driven agency” —a concept central to the agen- cy’s stated mission to “use data purposefully, to analyze and distill data to enable informed decision-making in all internal and external functions.”
A major facet of this approach has been the use and publication of consumer complaints, a fairly novel approach by a U.S. federal agency, at least in its scope and scale. In his prepared remarks at the Americans for Financial Reform event on July 16, 2015—the CFPB’s fourth anniversary—Director Richard Cordray highlighted the role of consumer complaints in the CFPB’s decision-making and in educating consumers. According to Cordray, the purpose of the database is “to educate the public and improve
the functioning of the marketplace” and that the direction provided by issues in consumer complaints has “turned out to be foundational to all [the bureau’s] work.”
Industry takes issue with whether the CFPB lives up to the goal of being data-driven. A November 2015 American Banker article claims that based on undisclosed CFPB documents and interviews
with current and former agency o cials, the CFPB’s consumer complaint database is widely considered inaccurate and un- trustworthy. The article references egregious instances of duplicative complaints as well as the misiden- ti cation of companies. Cordray red back at the publication saying its report was “itself riddled with inaccuracies about the database and how it works” and cited the CFPB’s Inspector General audit report, which found a “relatively small” number of complaints
with inaccuracies. But the editors noted that Cordray does not dispute any of the examples given in the article.
Concerned from the Start
Many in the industry have submit- ted comments to the bureau during proposed policymaking for the creation of the public database
and the publication of consumer narratives, citing a variety of other grievances with CFPB practices. Many companies argue that con- sumer complaints are not su - ciently screened to ensure that they’re indicative of valid com- plaints based on legitimate facts. These companies are concerned that the presence of unveri ed complaints in the database could skew public perceptions toward them. Likewise, they’re worried
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