Pandemic contributing to rising number of complaints, new supervisory approach, bureau chief tells panel

About 5% of complaints received by the federal consumer financial protection agency since the year began specifically referenced coronavirus, the director of the agency told a Senate panel Wednesday.

Consumer Financial Protection Bureau (CFPB) Director Kathleen Kraninger also told the Senate Banking Committee that the agency has developed a supervisory program to target consumer risk related to the pandemic.

Kraninger told the committee that from Jan. 1 through July 26, consumers submitted more than 270,000 complaints to the CFPB, and more than 14,000 of the complaints specifically referenced coronavirus. She said that each month from March through June set a new monthly record for complaints received by the bureau.

“In March 2020, we saw a notable increase in inquiries related to trouble making mortgage payments,” she reported to the committee in her written testimony. “Those inquiries also highlighted concerns about when deferred payments would be due after the CARES Act forbearance period.”

She said those complaints were instrumental in prompting the bureau to “work expeditiously with our interagency colleagues to address the lump sum payment issue and the concerns regarding consumer confusion around CARES Act forbearance options.”

Still, pandemic-related complaints are relatively few of the rising number of complaints received by the bureau. For example, credit and consumer reporting continues to draw the most complaints overall, accounting for 63% of all complaints received in May and June (which totaled 36,369 complaints in May and 36,388 in June).

In other comments, the bureau director told the committee that the bureau has developed a “new, targeted supervisory approach” dubbed “Prioritized Assessments” to focus on the institutions and markets that pose the greatest risk of consumer harm resulting from pandemic-related issues.

In her written testimony, Kraninger said the program consists of “high-level inquiries designed to obtain information entities to assess the impact on consumer financial product markets due to pandemic-related issues.” She said the assessments will allow the CFPB to identify potential risk to consumers across a large number of organizations “while continuing to reduce the burden on institutions and allowing examiners to continue to work safely from their home-duty stations.”

Oral Testimony of Director Kraninger Before the Senate Banking Committee