Director Kraninger Remarks During Financial Literacy and Education Commission Public Meeting
Good morning. Despite these difficult times, I’m pleased to be with you all today to kick off my first meeting as vice-chair of the Financial Literacy and Education Commission.
There is no doubt that COVID-19 has had a devastating impact on our country, our economy, and our individual lives. It has also affected the financial well-being of many consumers. I want to focus my remarks today on how the Bureau is taking action to protect consumers, in cooperation with other FLEC and government partners.
First, the Bureau continues to hear directly from consumers through our complaint system. In March and April, the Bureau received approximately 36,700 and 42,500 complaints respectively – the highest monthly complaint volumes in the Bureau’s history. While credit reporting and debt collection continue to receive the most complaints overall, for consumers mentioning COVID-19 and related terms, mortgages and credit cards top the list.
A significant portion of complaints as a result of the pandemic are about issues consumers encounter when seeking alternative payment options for their mortgages, credit cards, auto loans and leases, student loans, and other loans. Consumers report that they are seeking changes to loan terms, such as suspension of payments, lower interest rates, longer loan terms, and other ways to postpone or lower monthly payments because they have lost their jobs or are working fewer hours.
The Bureau’s complaint system and other stakeholder engagement mechanisms are important in informing the Bureau’s work, including our supervisory and enforcement activity. I want to make clear that at all times, and particularly during this unprecedented crisis, we will not hesitate to take public enforcement action against companies or individuals that engage in unfair, deceptive, or abusive acts or practices, or otherwise violate consumer financial law. We are monitoring the marketplace in real time and coordinating on an ongoing basis with Federal and State agencies and regulators. We are taking, and will continue to take, swift action when we identify companies or individuals that violate the law to exploit consumers.
Consumer complaints also inform the Bureau’s educational work. A common concern we heard from consumers is that they will have to make a balloon payment at the end of the mortgage forbearance. While Congress didn’t specify the accommodation to come after the forbearance period in the CARES Act, the intent clearly is to help consumers through this uncertain period. Regulators across the board have made clear that the focus is on accommodating consumers. After discussion with HUD and FHFA, the CFPB updated our materials for consumers to reflect that there will not be a lump sum payment after a CARES Act forbearance period if the borrower cannot afford it. We have also supported FHFA and HUD in their efforts to provide clear scripts to their servicers in talking with their customers.
Providing clear, accurate information to consumers about their rights, protections, and options is critical, and the Bureau has made that a top priority. The Bureau has resources in a variety of formats on key topics of concern, including what scams consumers should be watching out for, how to protect their credit, and their mortgage options. Staying informed, engaged and proactive will help consumers weather this crisis. I encourage those listening to reference consumerfinance.gov/coronavirus for information on how consumers can protect their finances during the pandemic.
Part of being a consistent and reliable source of information to educate and empower consumers means highlighting the tools of our interagency partners, and it means strengthening our current partnerships. On April 15, the CFPB and FHFA announced a Borrower Protection Program to share mortgage servicing information to protect borrowers during the coronavirus national emergency. Under the program, the CFPB is sharing complaint information and analytical tools with FHFA via a secure electronic interface; and FHFA will share data, with appropriate protections, about forbearances, modifications and other loss mitigation initiatives undertaken by Fannie Mae and Freddie Mac.
I look forward to continuing to work with FLEC members on ways we can promote consumer resiliency and recovery in the coming months. And I appreciate the many efforts of our partner agencies that are being highlighted in today’s meeting. Thank you.
The Consumer Financial Protection Bureau (CFPB) is a 21st century agency that helps consumer finance markets work by making rules more effective, by consistently and fairly enforcing those rules, and by empowering consumers to take more control over their economic lives. For more information, visit www.consumerfinance.gov.