The Consumer Financial Protection Bureau on Tuesday released its August complaint snapshot, which indicates that consumers across the country have been filing a large number of complaints about access to banking services. Further, many consumers complained that when they tried to open new accounts, they were ambushed with negative reports previously not provided to them.
The monthly report shows that as of Aug. 1, the CFPB received 94,200 complaints about services provided by banks, credit unions and nonbank financial firms.
There are more than 200 million deposit accounts open nationwide, according to the bureau.
Consumers most frequently complained about consumer and credit reporting data used to screen applicants for new accounts, saying that they often learned about negative information for the first time during the application process. They also complained about having difficulty addressing potential errors on their reports, which may have hindered them in opening accounts.
“Deposit accounts are an essential component of millions of consumers’ financial lives,” noted Richard Cordray, director of the CFPB. “We are concerned that consumers continue to face difficulties accessing and managing this cornerstone financial tool.”
The complaints in part reflect the overall difficulty experienced by the underbanked — that is, the 37 million people who don’t have access to traditional bank accounts, said Joy Hackenbracht, a consumer banking project research officer at The Pew Charitable Trusts.
Overdraft fees are the major reason many consumers do not have access to traditional banking services, she said.
“Consumers describe issues with the amount, the frequency and the number of times they were paying these fees,” Hackenbracht told CRM Buyer.
A large number of complaints concern account overdrafts due to confusion about the availability of funds, according to the bureau. Consumers also registered complaints about the amount of time funds were placed on hold.
The CFPB earlier this year sent a letter encouraging the 25 largest retail banks to offer lower-risk deposit accounts to help customers avoid overdrawing their accounts, according to spokesperson Walter Suskind.
The bureau issued a separate notice warning banks to take steps to make sure credit information about customers was accurate.
A third topic reflected in the complaints is the prolonged process of resolving disputed transactions, of particular concern to consumers who believed they were the victims of fraud. Consumers often said they were not given provisional credit, and that the process to resolve the disputes took much too long.
Bank of America, JPMorgan Chase, Wells Fargo and Citibank were the targets of the most complaints.
Overall, the bureau handled 954,400 complaints as of Aug. 1.
During July, the biggest number of complaints about financial products or services involved debt collectors. The bureau received 24,000 complaints in the overall category during the month, and 6,546 involved debt collection practices. Credit reporting was second, with 5,382 complaints. Mortgages were third, with 3,910 complaints.
For the three-month period ending in July, the biggest year-over-year increase involved student loan complaints, which rose 64 percent. The bureau received 1,050 complaints during the period, compared with 639 complaints the year earlier. The bureau began receiving complaints about servicing federal student loans in February 2016.
The most frequent complaint about student loans from October 2014 to August 2015 involved dealing with lenders or servicers, CFPB’s Suskind told CRM Buyer. Thirty-eight percent of the complaints involved problems borrowers faced when they could not repay their loans.
Alaska accounted for the largest overall complaint volume increase during the three months ending in July when compared with year-ago figures, followed by Wyoming and Colorado.
Credit reporting services, led by Equifax, Experian and TransUnion, led all companies in overall complaints.