Another Bureaucracy

Dec 5, 2011 by

With about 2 million employees (excluding the Postal Service and the military), the Federal government is the U.S’ largest employer. I tend to think that should be enough to get the job done well, so my usual reaction to the announcement of a new government bureaucracy is an Archie Bunker-like “aww jeez.” That said, I’m not so tightly principled that I ignore and boycott the services offered by government. I’ve little compunction about slurping at the public trough like everybody else once politicians who didn’t earn my vote have decided to borrow even more money from the Chinese to buy yet another bucketful of “slop.” Maybe that makes me part of the problem.

Consumer Financial Protection Bureau

The Dodd-Frank Wall Street Reform (ha!) and Consumer Protection Act of 2010—a by-product of the 2008 U.S. financial meltdown—created the Consumer Financial Protection Bureau, or CFPB, which launched operations in July 2011.  The Bureau’s website says it’s “…focused on one goal: watching out for American consumers in the market for consumer financial products and services.” I’m unclear exactly what that means, other than the Bureau may need to upgrade its writing staff. CFPB’s website also describes its mission:

“The central mission of the Consumer Financial Protection Bureau (CFPB) is to make markets for consumer financial products and services work for Americans — whether they are applying for a mortgage, choosing among credit cards, or using any number of other consumer financial products.”

Again, the writing grates a bit, but on the alleged substance: The CFPB intends to “make markets…work for Americans.”  Make markets work for Americans…hmmm. Ambitious? Vague? Arrogant? Misguided? Meaningless? Yes, all of these potentially apply, and more. But let’s move on.

What the CFPB Does

If you have a complaint about your mortgage, your credit card, or a need to “tell your story,” the CFPB may be of interest, as these three opportunities dominate its website’s homepage. The CFPB also seeks to better educate consumers about all types of consumer debt with the aim of improving decisions and, one presumes given the Bureau’s genesis, help Americans grasp that borrowing more money than one can afford to repay tends to turn out badly, individually and nationally. (The blaring irony that the politicians who created the CFPB seem oblivious to this elementary tenet of money management is a subject for someone else’s blog.)

Credit Card Complaint Data

CFPB recently released an “Interim Report on CFPB’s Credit Card Complaint Data,” which summarizes the first three months of the Bureau’s credit card “Consumer Response” complaint system.

From 21 July 2011 to 21 October 2011 consumers submitted 5,074 credit card complaints to CFPB. Of these, 4,254 (84%) had been sent by CFPB to the credit card issuer for “review and response.” The CFPB says that card issuers report the status of 74% (3,151) of these complaints as either “full resolution” or “partial resolution.”

When the card issuer reports the complaint resolved, the CFPB gives consumers the opportunity to dispute the issuer’s response. 71% of complaining consumers did not dispute the issuer’s claim of resolution. Depending perhaps on your ideological bent, one may gravitate toward one of two opposing conclusions: 1) The CFPB is proving instrumental in resolving consumer credit card complaints, or 2) the CFPB is wasting the time and money of all parties involved by interjecting itself in a process best handled directly between card issuer and cardholder.

If I Have a Credit Card Complaint

Though I’m sure wonderful, well-meaning individuals staff the CFPB, the Bureau would not be my first resort if I had a complaint about my credit card account. I’d follow these steps:

  1. Cut out the bureaucratic middleman and take my complaint, in writing (on paper in the postal mail) with back-up documentation, directly to the credit card issuer. My monthly credit card statement includes useful instructions for making complaints or disputes.
  2. If the issue were not resolved to my satisfaction, I’d terminate my account and consider it my civic duty to file a complaint with the Federal Trade Commission. Though the FTC does not resolve individual consumer complaints, it aggregates complaints to help detect patterns of wrongdoing that can lead to investigations and prosecutions.
  3. If my complaint involved loss of money, I’d consider a Small Claims Court filing.
  4. Finally, I would submit a complaint to the CFPB, if doing so were not overly time consuming.
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