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CFPB Examines Consumer Complaint Data Among Races

The Consumer Financial Protection Bureau (CFPB) has released its first report analyzing complaint submission patterns by U.S. Census tract, “Consumer Complaints Throughout the Credit Life Cycle, by Demographic Characteristics.” The report finds that the complaints from wealthier communities and communities with higher percentages of white, non-Hispanic residents were more frequently about loan origination and performing servicing, while the complaints from communities of color and lower income communities were more frequently about credit reporting, identity theft, and delinquent servicing.

The findings of the report were based on the nearly one million consumer complaints submitted to the CFPB between 2018 and 2020, matching relevant consumers to census tract-level U.S. Census demographic data.

“Today’s report confirms that the experiences and concerns of communities, with consumer financial products and services, vary by race and wealth,” said CFPB Acting Director Dave Uejio. “Our consumer complaint data is a crucial tool for understanding varying consumer experiences, including across racial and economic divides.”

The report found that consumers from lower income and predominantly Black and Hispanic communities submitted credit reporting and delinquent servicing complaints at a higher rate per resident than consumers from higher-income and predominantly white, non-Hispanic communities, who were more likely to submit complaints related to loan origination and performing servicing. Asian-American and Pacific-Islander communities had higher rates of submitting credit reporting complaints than predominantly white, non-Hispanic communities; however, they also had a lower share of delinquent servicing complaints.

Key findings of the report include:

  • Complaints about loan originations increased by nearly 50% over the course of 2020, driven largely by mortgage complaints. This increase was centered in higher-income neighborhoods and neighborhoods with fewer people of color.
  • Neighborhoods with the highest share of white, non-Hispanic consumers submit complaints about loan originations at more than twice the rate of neighborhoods with the highest share of Black consumers.
  • Consumers from neighborhoods with the highest share of Black residents submit the most complaints per resident. Census tracts with the greatest share of Black residents (95% and over) have estimated complaint rates that are double the rates for tracts with the lowest share (5% and under).
  • Lower income census tracts (those at or below 40% of their area’s median income) submit around 30% more complaints per resident than census tracts at around 100% of their area’s median income.
  • Lower-income and communities of color are more likely to submit complaints about credit reporting, identity theft, and delinquent servicing, while higher-income and majority white, non-Hispanic communities are more likely to submit complaints about origination and performing servicing.

About Author: Eric C. Peck

Eric C. Peck has 20-plus years’ experience covering the mortgage industry, he most recently served as Editor-in-Chief for The Mortgage Press and National Mortgage Professional Magazine. Peck graduated from the New York Institute of Technology where he received his B.A. in Communication Arts/Media. After graduating, he began his professional career with Videography Magazine before landing in the mortgage space. Peck has edited three published books and has served as Copy Editor for Entrepreneur.com.
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