(July 9, 2021) Consumer complaints about federal student loans fell off during the coronavirus crisis, but protests about overdraft fees on checking accounts surged due to financial institutions attempting to help consumers have access to economic impact payments (EIPs), according to the complaint bulletin issued late last week by CFPB.
The bureau’s bulletin looks at consumer complaints related to three actions taken by Congress in response to the coronavirus crisis. Those were: suspension of monthly payments for federal student loans, issuance of EIPs to eligible households; and promulgation of an interim final rule in support of the Center for Disease Control and Prevention (CDC)’s eviction moratorium.
The bulletin said the key takeaways from the bureau’s analysis of these actions showed:
- Federal student loan complaint volume decreased significantly following suspension of payments; however, borrowers reported issues with customer service and sometimes experienced delays in getting responses to their complaints.
- The customer service issues in student loan complaints raise concerns about servicers’ preparedness for student loan borrowers resuming payments, particularly borrowers who have experienced a decrease in income.
- Renters have submitted few complaints about third-party debt collectors, or attorneys, who are attempting to carry out an eviction; more often, renters described issues with collections for past evictions or expressed concerns about negative credit reporting.
- Consumers reported being charged overdraft fees on their checking accounts when funds advanced by their financial institutions—so consumers could have access to all of their EIP funds—were later reversed.
Regarding the overdraft fees, the bulleting notes that financial institutions – as a courtesy to consumers who had overdrawn deposit accounts – advanced to their members or customers an amount equal to the negative balance so those consumers could reap full advantage of the EIP. However, the bulletin notes, those advances were later reversed, typically 30 days after the advance.
According to the bulletin, a limited number of complaints were received that consumers did not realize that an advance was posted to their account. “Many of these consumers reported learning of the advance only after the funds were debited from their accounts several weeks later,” the bulletin asserts.
“In response to these complaints, several financial institutions reiterated the intention of the advance was so that consumers could make full use of their stimulus payments,” the bulletin states. “In some limited circumstances, financial institutions refunded overdraft fees charged to the consumers’ accounts, stating they were refunding the fees as a courtesy.” A breakdown of what sort of financial institution (credit union, bank or other) refunded the fees was not provided.
LINK:
CFPB Complaint Bulletin: COVID-19 issues described in consumer complaints
(April 30, 2021) More complaints – particularly about credit or consumer reporting — were received in 2019 and 2020, on a per capita basis, from consumers living in predominantly minority counties than from consumers in predominantly white, non-Hispanic counties, the CFPB said this week in its April 2021 Complaint Bulletin.
Additionally, the bureau said, those consumers living in counties with the highest minority percentages submitted complaints at more than four times the rate compared to counties with the lowest percentage of minority populations.
Credit or consumer reporting appears to cause significantly more issues for consumers in predominantly minority counties, the bureau said, and added that consumers living in predominantly minority counties submitted more complaints on a per capita basis in nearly every one of the 11 product categories about which the agency accepts complaints.
The agency also gave some insights to future reporting: it said it will soon expand its demographic collection to include household size and income. That will include, CFPB said, enhancing the agency complaint form to give consumers the option to provide household size and household income when submitting a complaint.
Any additional information the bureau may need to help better understand the experiences of diverse communities that submit complaints will also be explored in the future, CFPB said.
LINK:
CFPB April 2021 Complaint Bulletin
(March 26, 2021) More than a half million complaints – up 54% from the previous year – were fielded in 2020 by the CFPB, reflecting the financial impact of the coronavirus crisis, the agency said this week. In a release, the bureau said it handled 542,300 complaints last year, with well more than half of those (58%) emanating from credit and consumer reporting objections. Debt collection (15%), credit card (7%), checking or savings (6%), and mortgage complaints (5%) were other major areas of complaints, the agency said.
Starting in April 2020, the bureau said, the month after the financial impact of the coronavirus crisis became apparent, consumers began to submit more than 3,000 complaints each month mentioning “coronavirus” keywords. Ultimately, by year’s end, more than 32,000 complaints mentioning the effects of the COVID-19 disease (or related keywords) were submitted last year, the CFPB said.
Complaints received about consumer and credit reporting claiming inaccurate information on their reports, the bureau said, outdistanced the total from the year before. The CFPB said consumers mostly submitted the complaints about Equifax, Experian, and TransUnion, the three largest Nationwide Credit Reporting Agencies (NCRAs).
The reporting companies, according to CFPB, provided closure responses noting that a dispute would be filed on the consumer’s behalf, but otherwise failed to address the issues consumers raise in their complaints. The bureau also said the NCRAs mentioned suspected third-party activity in their responses to consumers, but did not detail steps taken to authenticate consumers or to address the issues raised in their complaints.
“While the NCRAs typically provided substantive and comparatively detailed responses to the majority of complaints in prior years—including providing details of dispute investigations and outlining steps taken for consumers that are attempting to address identity theft—this year, the CFPB observed that the NCRAs stopped providing complete and accurate responses in many of these complaints,” the agency said.
Later this year, the agency said, it will release a separate report on complaints submitted about the NCRAs that are related to incomplete or inaccurate information on the consumers’ credit reports. The report, CFPB said, will be in keeping with reporting requirements under the Fair Credit Reporting Act (FCRA).