Mortgage, credit card issues top concerns for Illinois consumers, policy brief shows

Illinois consumers issue more complaints about bank accounts and student loans than consumers nationwide, says Woodstock Institute

CHICAGO—Issues with mortgages and credit cards were the top complaints Illinois consumers submitted to the Consumer Financial Protection Bureau (CFPB)’s consumer complaint database, a new policy brief from Woodstock Institute shows. The policy brief examines data from the CFPB’s online consumer complaint database and compares Illinois’ complaint data by issue and product with national complaint data. The complaint database was established in June, 2012 and includes consumer complaints on a number of financial products, including: mortgages, credit cards, credit reports, bank accounts, student loans, consumer loans, and money transfers.

“Despite reforms to the financial services industry, Illinois consumers continue to face challenges with mortgage lenders, credit cards, bank accounts, and more,” says Courtney Eccles, Policy Director of Woodstock Institute. “Given the ongoing problems with mortgage lenders’ foreclosure prevention efforts and issues in the credit card market, it is not surprising that these two issues generate the most complaints.”

The policy brief found:

  • Illinois residents submitted 4,651 complaints to the CFPB complaint database website, nearly half of which (48 percent) were related to mortgages;
  • Credit card complaints accounted for 20 percent of complaints submitted by Illinois residents, and the two biggest issues were billing disputes (13 percent) and APR or interest rate issues (11 percent);
  • Complaints related to bank accounts or services made up 18 percent of the total and over two-thirds of those focused on opening/closing/managing an account (40 percent) or deposits and withdrawals (29 percent);
  • The CFPB sent Illinois complaints to 147 different financial institutions or companies, but roughly half of those went to five major banks, including Bank of America (773), Chase (576), Citi (366), Wells Fargo (359), and Capital One (256).
  • Bank account complaints and student loan complaints were a slightly higher percentage of Illinois’ total than they were nationally, while credit card complaints, consumer loan complaints, and money transfer complaints accounted for a slightly smaller percentage of the total in Illinois than they did nationally.

The brief provides five policy recommendations to strengthen and expand the CFPB’s complaint database and provide advocates and regulators with a better understanding of consumers’ concerns, banks’ responses, and areas where additional regulation might be needed:

  • Add complaints related to high-cost loan products, including payday, installment, and auto title loans;
  • Allow the consumer to include a narrative, anonymously if the consumer chooses, with each complaint file;
  • Include company response narratives, and consumer dispute narratives when applicable, to each complaint file, edited to preserve the privacy of the consumer;
  • Collect and disseminate data that allows for fair lending analysis; and
  • Aggregate the data at the smallest geography possible consistent with the need to protect the privacy of the consumer.

“Data from the CFPB can alert us to problematic financial products and practices before they grow out of control,” said Eccles. “Collecting and reporting additional data about the specific incidents, including the consumer’s description of the complaint and information about race and gender, can bring to light potentially discriminatory products and services.”

The consumer complaint database has already proved a useful tool for consumers, advocates, and regulators alike. Through continued expansion of the available information and types of products included, the database can continue to guide effective regulation and serve as a mechanism for helping consumers resolve outstanding issues with financial institutions in an easy and expedient fashion.

For more information, contact Courtney Eccles at ceccles@woodstockinst.org or (262) 352-3185.