The CFPB sees credit complaints, reports

The Consumer Financial Protection Bureau (CFPB) released its semi-annual report on April 6, detailing everything the agency has done for most of the past year. In a 100-page document, the agency explains its advocacy efforts to help consumers, enforcement actions taken against businesses and individuals, data generated for different industries or proposed regulations.

The report also contains some interesting data. For example, if we examine the analysis of complaints, we find that the Office received approximately 872,400 complaints, a 33% increase over the previous reporting period. Interestingly, 70% of these complaints were about credit or consumer reporting issues, followed by debt collection at 13%. Complaints about credit cards, which seem to be a subject of great interest to the agency, represent barely 4% of total complaints.

Credit reporting is therefore an area in which the agency has carried out work and plans to continue in 2022. consumption” in which he found that consumers in predominantly black and Hispanic neighborhoods, as well as younger consumers and those with low credit scores, are significantly more likely than other consumers to have disputes appear on their credit reports. This is part of a series of reports focusing on trends in the consumer financial market.

Another area where consumers have raised concerns about credit issues is buy it now, pay later (BNPL), particularly regarding the impact on their credit ratings if they make no payment. The CFPB devotes a few pages of the report to explaining the survey launched in December 2021 to collect data and information on the risks and benefits of these loans. This investigation is one of only two information-gathering orders under section 1022(c)(4) of the Consumer Financial Protection Act that the Bureau has issued in the past year. The other was against large technology companies operating payment systems in the United States, namely Amazon, Apple, Facebook, Google, PayPal and Square.

On new technologies, the CFPB published in March 2021 the “Request for Information on Artificial Intelligence and Machine Learning” jointly with four other federal financial regulatory agencies to collect information on the use of intelligence artificial by financial institutions. The agencies sought information from the public about how financial institutions are using AI in their operations, including fraud prevention, personalizing customer services, credit underwriting and other operations.

Another topic the regulator is bringing back is open banking and the ability to provide more access to consumer data. In 2020, the CFPB published the “Consumer Data Access Advance Notice of Proposed Rulemaking” seeking comments and information on the costs and benefits of consumer data access; competitive incentives; standard parameter; access range; consumer control and privacy; and data security and accuracy. According to the report, the CFPB is still reviewing comments received in response to this regulatory proposal.

Read also: CFPB closes consultation on ‘junk fees’ with credit card late fees in sight

In addition to the topics mentioned above in credit report, BNPL or open banking, the CFPB has given special attention and dedicated resources to the investigation of “junk fees”.

On Monday, April 11, the agency closed its public consultation on junk fees and sources with knowledge of the matter told Reuters the Bureau may consider rewriting some rules on late fee caps and taking a tougher line. in terms of application.

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