In its annual report, the CFPB Ombudsman’s Office included two broader issues within its analysis on systemic issues – the memorialization of ex parte communications and consumers’ options to identify concerns with their companies, as provided in the CFPB’s public Consumer Complaint Database.
The Ombudsman’s Office received 1,412 individual inquiries in fiscal year (FY) 2016, a 21 percent increase from the 1,166 received in FY 2015. The second half of the fiscal year accounted for nearly all of this increase, with the third and fourth quarter of FY 2016 up about 41 percent from the same period in FY 2015. Individual persons accounted for 1,160 of the inquiries received in FY 2016.
In addition to individual inquiries, the Ombudsman’s Office reviewed systemic issues that may be affecting consumers or financial entities nationwide.
Memorialization of ex parte communications
The Ombudsman’s Office reviewed the CFPB ex parte policy, the process to memorialize communications at the CFPB, and any internal guidance for memorializing ex parte communications; met with the relevant CFPB offices involved in memorializing ex parte communications; sought additional feedback from outside stakeholders; and analyzed the ex parte documentation posted on regulations.gov over a specified timeframe.
“In FY 2016, some groups shared with the Ombudsman an inability to locate documented ex parte communications to proposed rules or noticed that the documentation of such communications were publicly available in noticeably varying timeframes on regulations.gov. We decided to study the issue further to see if we could be of assistance to both the CFPB and the public,” the report stated.
The CFPB ex parte policy is set out in CFPB Bulletin 11-3, in which an ex parte presentation is defined as “any written or oral communication by any person outside the CFPB that imparts information or argument directed to the merits or outcome of a rulemaking proceeding.”
The CFPB requires that disclosure be made for both oral and written ex parte communications by the external party making the communication, with a timing requirement, or, alternatively, by the relevant CFPB staff. Such memorialized communications later are published on regulations.gov.
In its review, the Ombudsman’s Office observed that there was not a consistent format used in posting the ex parte communications information on regulations.gov, although a template is available to CFPB staff.
“Additionally, documents were posted in varying timeframes after the communication, from one day to approximately five months, which we learned was not related to any process delays at the regulations.gov resource. We also noted examples of communications made prior to publication of the proposed rule that were included in the docket as ex parte communications although not required by the bureau’s policy,” the report stated.
Earlier this year, the Ombudsman’s Office recommended that the CFPB standardize the agency’s process for memorializing ex parte communications regarding proposed rules, particularly as the CFPB anticipated an active proposed rulemaking schedule in 2016.
“We understand that the CFPB plans to issue a revised ex parte policy which will update the timeframe in which disclosures must be made when memorializing such communications. In conjunction with the new policy, the CFPB shared that it is updating and standardizing the internal process and accompanying process map for CFPB staff receiving ex parte communications,” the report stated.
Consumer issue selections
Also, some groups expressed concerns to the Ombudsman’s Office about the specificity of options available to consumers to identify the issue with their company when submitting consumer complaints and, in turn, the data then available for analysis in the public Consumer Complaint Database.
“The feedback we received from a few groups included that for checking accounts, for example, it is difficult to determine which issue categories incorporate concerns relating to overdraft. Although only one issue category option for this product does include the word ‘overdraft,’ we understand that other issue categories offer examples that consumers may use for overdraft issues. As a result, we learned that some database users review the consumer complaint narratives to understand whether the consumer complaints they are analyzing are regarding overdrafts. Publication of the narrative that accompanies a consumer complaint in the database is optional for the consumer,” the report stated.
The Ombudsman’s Office recommended to the Office of Consumer Response that the database should provide additional sub-issues for some product issue areas and shared concerns about the “noticeable differentiation” across products in the specifications of issues/sub-issues which database users have for their analyses.