LAKE FOREST, Ill.—The CFPB Thursday released three years of complaints consumers have made against financial companies, and the data shows that overdrafts are low on the list of services that trouble Americans, reports one economist, who suggests the CFPB should pay close attention to what consumers are saying.
Analysts have stated that the CFPB is zeroing in on overdrafts, and will come out with proposed rules this year that may do away with the service across all payment channels, costing CUs potentially $6 billion in annual revenue.
“Less than one of five complaints on checking deal with overdrafts, and, overall, less than one out of 62 complaints is on overdrafts,” said Michael Moebs, economist and CEO at Moebs Services, who compiled results of the 410,007 total complaints. “Less than one in 20,000 checking account holders have complaints on overdrafts. Senator Elizabeth Warren and CFPB Director Richard Cordray need to study these complaints and observe what the American citizen is telling us.”
Moebs sees the CFPB’s releasing the data as “a huge positive step forward for the CFPB. With this data, priorities can be established and problems put in proper perspective.”
Moebs said ten prime complaint categories emerged (see chart below). Leading the list were complaints on mortgages.
“The next two categories also pertained to loans, and in total the top three complaint categories are loans,” said Moebs.
Deposit Accounts were in the fourth category but only represent one out of nine of all complaints filed, said Moebs.
“Interestingly payday loans represent less than 1% of complaints, as do prepaid cards. This is a strong message to Director Cordray,” said Moebs. “Mr. Cordray needs to start concentrating more on what the American citizens want – better loan data, loan processing and loan compliance.”
Checking is at the top of the list when it comes to deposit services. Almost three out of four deposit complaints are with checking accounts. Other deposit services and transactions such as money market deposit accounts come in a very distant second place, said Moebs.
Savings and CDs follow checking and other deposit services. “Cashing a check but not having an account with the financial institution, while highly mentioned by consumer advocates, does not even score 1.00% on the list of complaints,” Moebs explained. “Checking does dominate deposit complaints. Most of the other deposit complaints are way down the list of priorities that the CFPB should consider.”