Black Knight Financial Services (BKFS) is working to create a prototype of an industry-level report to provide detailed information on the consumer complaints the Consumer Financial Protection Bureau (CFPB) receives, promoting greater understanding for regulators and servicers.
The CFPB Complaint Tracking Report, produced by Black Knight, will incorporate data contributed by both servicers and CFPB. Dori Daganhardt, VP of product marketing and market strategy at Black Knight, said she expects the report to help level the playing field in terms of transparency and education. She said the servicers and regulators will work together to determine the level of granularity contained in the report.
"We're very excited to be able to partner with the industry to create this kind of report and provide this type of information," she said.
The rate at which the Bureau receives complaints has been surging upward almost since day one. When CFPB opened in July 2011, it began receiving consumer complaints about credit cards and eventually expanded to include other aspects of financing such as mortgages, bank accounts, consumer loans, debt collection, and money transfers. The number of complaints received nearly doubled from 2012 (91,000) to 2013 (163,700), and as of December 31, 2013, the Bureau reported having received 310,000 complaints in its first two and a half years of existence.
"Consumer complaints have become central to the work of this agency. They enable us to listen to, and amplify, the concerns of any American who wants to be heard," CFPB Director Richard Cordray said in a release earlier this year. "They are also our compass. They make a difference by informing our work and helping us identify and prioritize problems for potential action."
Approximately 37 percent of those complaints (about 60,000) were related to mortgages, making that the top complaint category (debt collection was second with 19 percent), according to CFPB. Most of the mortgage complaints concerned problems that stemmed from consumers' inability to pay, such as loan modifications or foreclosures.
The idea for a CFPB Complaint Tracking Report was born from Black Knight's recent participation in a working subcommittee of the National Mortgage Servicing Association. Mortgage servicers requested that Black Knight produce such a report to include CFPB- and servicer-contributed data.
Such a report would benefit those involved in two main ways, according to Black Knight: first, providing a way to for servicers to benchmark their management performance relative to the rest of the mortgage industry. Servicers will be able to check their book of business against the rest of the industry (which remains anonymous) by using aggregate charts and graphs.
The second benefit the report provides is standardizing the reporting to CFPB to facilitate an improvised and unbiased understanding of all the complaint cases CFPB receives.
This report is not just for industry players, however. Consumers also stand to benefit from a report of this type, according to Black Knight.
"I think it's a great opportunity for another level of consumer education," Daganhardt said. "I think once there's a better understanding of what processes and procedures are followed when it comes to consumer complaints, to be able to provide a more holistic look into that will be beneficial not only for the industry and the regulators but for the consumers themselves. The individual consumer has their story, and they know their specific experience. I think for them to be able to see a more holistic view of what's happening with similar types of complaints will be helpful."
Providing the context around the consumer's complaint will help paint a more accurate picture of the case and the players involved, according to Bob Caruso, EVP of servicing, sales, and strategy at Servicelink.
"If Company A has more complaints than Company B, at the surface level, that means Company A must have something wrong with it." Caruso said. "If company A is bigger than company B and they both have the same complaint level, that would mean Company A should have more complaints, but relative to the size of the company."
Also, the report will provide a more specific definition of exactly what constitutes a complaint, which will better help servicers assist consumers with their grievances, Caruso said.
"We want to be able to define, is it a real complaint, what's the complaint about, is it within our control as a servicer, and if it is, what are we doing about those kinds of things," he said.
Daganhardt said it's early in the process of gathering data for the report, but she hopes to get 80 percent of the market represented.
"I'm encouraged by the committees we've had," she said. "We've socialized the report template, if you will, in several different forms, and we've had a lot of positive feedback. It seems like the industry wants to be able to have this more holistic view. I'm very hopeful that we'll get responses fairly quickly. We already have the first cut of the layout of what contributed data we'd like to have, but we'll have to finalize that with everyone, obviously. We know how to do this and we've done this many times before, so all of those ingredients are a recipe for success."