Complaints With the CFPB Complaint Database

According to Money:

"In 2017, consumers filed 42,094 gripes against 49 large banks, according to research from LendEDU, a company that runs a marketplace for student loans and refinancing. To rank the banks, LendEDU weighted CFPB complaints against a bank’s deposit account holdings. The worst offender? When it comes to CPFB complaints specifically tied to banking activity or services (as opposed to, say, a credit card), Minnesota-based TCF Bank remains sits at the top of the list, LendEDU found."

sowhat logoNever mind the fact that Money doesn't edit their articles before publishing them ("TCF remains sits at the top of the list"?). This is a bad data hack of a so far ineffective CFPB complaint system. Ratios like complaints per $1 billion in deposits are blunt, dumb, and dangerous for media amplification.

We downloaded the CFPB database to do our own analysis. What we found was that more than half of the nearly 240,000 complaints submitted had to do with credit reporting and debt collection. Can't weight that against deposits, can you?

The LendEDU analysis only included banking-related complaints. We looked at all complaints. Wells Fargo--the current poster child for consumer abuse--had a total of 8,979 complaints. The bank says it does business with one in three--or about 42 million--US households. That means 99.98% of Wells Fargo's customers saw no need to seek help from the paternal industry watchdog. The number of complaints was even lower at popular whipping boys like BofA and Chase.

On the other hand, consumers lodged nearly 31,000 complaints in 2017 against Equifax. Of course, they did experience a well-publicized data breach. There was no data breach at Experian (that we know of, at least), and that firm had 21,588 complaints filed against them with the CFPB. That 8,333% more complaints than TCF had submitted about them.

Even Navient Solutions was complained about more often than Wells, BofA, or Chase, with almost 11,900 complaints filed with the CFPB.

Bottom line: Money's article is skewed and biased. And the analysis from LendEDU--who said it uses total bank deposits as a weighting factor because the mix of consumer accounts is not readily available across the industry--isn't valid.

Steve Williams
Partner
Cornerstone Advisors

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