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This week, the CFPB announced that it has added complaints about credit reports and money transfers to its complaint database. Before this addition the complaint database consisted of bank accounts, credit cards, mortgages and student loans. With the new information, the database will now include more than 113,000 complaints. As we have stated in prior updates, the CFPB is continuing to work on its plans to build a massive database that contains general information about consumers’ spending and borrowing habits irrespective of whether the consumer has initiated a complaint to the CFPB.
Because credit reporting agencies are subject to supervisory examinations, it makes sense for complaints about these companies to be within the database. The slippery slope, in my opinion, is the information about money transfer complaints because many companies that are not within the CFPB’s supervisory or general jurisdiction transfer money. For example, broker-dealers and insurance companies, especially those that are affiliated with banks, transfer money all of the time. But broker-dealers are not within the CFPB’s jurisdiction because they are regulated by the SEC. And insurers are also explicitly excluded from the CFPB’s jurisdiction. Will the CFPB nonetheless investigate a complaint against a broker-dealer or insurance company arising out of a money transfer issue, or will the CFPB refer the matter to the SEC, FINRA or insurance commissioner? I think that the CFPB will likely investigate the complaint and justify its ability to do so by stating that it is investigating whether the broker-dealer or insurance company is violating a law that the CFPB enforces. We have seen the CFPB do that with the mortgage insurers, and there is little reason to believe that it will stop there. If any of you want to see the complaints in the database, the link is here: http://www.consumerfinance.gov/complaintdatabase/.
Have a great weekend and remember that all of our prior updates are on our website, www.cfpaguide.com/weeklyupdates.