Alert December 11, 2012

CFPB Ombudsman Releases First Annual Report

The CFPB’s ombudsman released its first annual report detailing its activities from July 2011 through September 30, 2012. The report discussed the role of the Ombudsman—to provide “a fair process as between consumers, the providers of consumer financial products and services and the CFPB”—and also the issues it has dealt with over the past 10 months.  The report noted that the Ombudsman has handled over 700 individual consumer inquiries, ranging from questions concerning the CFPB’s interactions with consumers to website usage, and has also undertaken two systemic reviews.

The first review related to consumers’ lack of knowledge about the consumer complaint process. According to the report, consumers remain unclear about how the complaint process works, noting, for example, that consumers did not understand the timing for certain steps in the process. The Ombudsman recommended that the CFPB provide additional information to consumers about the process in any future oral or written communications. The second systemic review concerned the presence of enforcement attorneys at supervisory exams. The CFPB takes an integrated approach to supervision and enforcement—enforcement attorneys are present at the beginning, middle and end of the supervisory examination. This practice, a cause for concern among providers of consumer financial products and services, was examined by the Ombudsman, which spoke individually to bank officials, outside consultants and CFPB staff. As a result, the Ombudsman recommended that the CFPB review its approach and, until a full review is complete, establish ways to clarify the role of the enforcement attorney at the supervisory examination.