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51 » VISIT US ONLINE @ DSNEWS.COM WATCHDOG SAYS CONTROLS FOR CFPB COMPLAINT DATABASE CAN BE ENHANCED Opportunities exist to enhance the manage- ment controls over the Consumer Financial Pro- tection Bureau (CFPB)'s controversial Consumer Complaint Database, according to a recent audit from the Office of the Inspector General for both the Federal Reserve and the CFPB. e database was launched in 2012 as a way to help consumers make informed and responsible decisions about financial transactions, and to ensure the transparent and efficient operations of markets for consumer financial products. e Bureau generated some controversy in June 2015 when it began publishing consumers' narratives of complaints; some analysts and stakeholders in financial markets say that since the CFPB does not verify the allegations made in the complaints, in some cases the Bureau may just be offering up the biased opinions of disgruntled individuals for everyone to see. In order to assess the effectiveness of the CFPB's controls over the accuracy and complete- ness of the database, the OIG performed an audit of these controls relevant to the database covering processes from January 1, 2014, through June 30, 2014, and complaints in the database through June 30, 2014. e OIG identified areas in which management controls could be improved in order to enhance the database's ac- curacy and completeness. "e Office of Consumer Response (Con- sumer Response) has implemented controls to monitor the accuracy of complaint data in the in- ternal case management system, which contains all consumer complaints received by the CFPB, but it has not established separate management controls to ensure the accuracy of data extracted from the system and included in the Consumer Complaint Database," the OIG said in its report. e OIG said it analyzed 254,835 complaints and found "several noticeable inaccuracies." While the OIG said the number of complaints with inaccuracies it found was relatively small, "enhancing existing controls would help ensure that as the number and types of complaints published increase, overall reliability of the data is maintained." e audit also found that Consumer Re- sponse does not: » Review all closing responses posted by companies, which includes verifying whether the closing response the company selects is consistent with the definition; » Consistently publish untimely closing responses posted by companies in the Con- sumer Complaint Database. e audit also revealed that consumers were being allowed 60 days to dispute responses from the companies instead of 30 days, as was stated in Consumer Response publications, and that con- sumers were not consistently being offered the opportunity to dispute untimely responses from companies. Also, the OIG found that the public was not being consistently notified by Consumer Response when the database was not updated, although the website asserted that complaint data are refreshed daily. e OIG made recommendations to improve the operational controls to improve the accuracy and transparency of the database, based on the audit. "In its response to our draft report, Con- sumer Response concurs with our recommenda- tions and indicates that it has already initiated actions to address them," the OIG said in its report. "Consumer Response also stated that it implemented a system change to update the process for untimely company responses and related consumer disputes, and it is replacing the DT Complaint Database." SENATE BILL WOULD GIVE COMMUNITY BANKS A SAY IN REGULATORY PROCESS U.S. Sens. Mike Rounds (R-South Dakota) and Angus King (I-Maine) have introduced a bill that would give community banks, small businesses, and credit unions a say in the CFPB's rulemaking process. S.1963, also known as the Bureau of Consumer Financial Protection Advisory Board Enforce- ment Act, would create a small-business advisory board within the CFPB. It would also make permanent community bank and credit union panels within the CFPB. Under the new bill, each panel would be required to adequately represent members from rural and underserved areas, according to Rounds' announcement. "As the CFPB continues to make decisions that affect every American, it is critical for rural areas, community banks, small businesses, and credit unions to have a voice," said Rounds, a member of the Senate Banking Committee. 'is is particularly important in rural states like South Dakota. Our bill makes certain that voice will be heard." e CFPB currently has four advisory boards for setting policy, only one of which, the Consumer Advisory Board, is required by Dodd- Frank. e new bill would create an additional advisory committee for small businesses in addi- tion to codifying two existing advisory boards, the Community Bank Advisory Board and the Credit Union Advisory Council. "Small businesses, community banks, and credit unions are invaluable forces in America's economy, and they deserve a seat at the table as the CFPB makes important and far-reaching fi- nancial decisions," King said. "Rural communities in Maine, South Dakota, and all across the nation rely on these institutions to create jobs and grow the local economy. I'm proud to stand with Sen. Rounds, my fellow former governor, on behalf of rural America." According to Rounds, groups supporting the new bill include the Independent Community Bankers of America, the American Land HED Association, and the Credit Union National As- sociation. e bill introduced by Rounds and King is one in a series of bills introduced this year in an attempt to gain regulatory relief for community banks and credit unions, many of which have said they have had difficulty operating due to the increasing cost of compliance with the new regu- latory regime under Dodd-Frank. Many of those institutions have either gone bankrupt or merged with other institutions in the last five years. A similar bill, H.R. 1195, passed in the House in April. In late July, the House Financial Services Committee approved a series of bills that would offer regulatory relief to community banks and smaller financial institutions. "After five long years of Dodd-Frank's misguided regulatory assault on Main Street, I'm pleased the Financial Services Committee once again acted to provide regulatory relief for our community financial institutions and the hardworking Americans they serve. Washing- ton's one-size-fits-all rulemaking has shifted Dodd-Frank's compliance costs down to many individuals and families—forcing them to absorb higher cost of credit while reducing their access to popular financial products," said Rep. Randy Neugebauer (R-Texas). "is 'new normal' is unacceptable. As chairman of the Financial Institutions and Consumer Credit Subcommittee, I will continue to work in a bipartisan manner and advocate for well-tailored consumer protection that does not infringe upon consumer choice or the ability of the American people to achieve greater opportunity."

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