As many know, I am a close follower of the CFPB's complaint portal. In this post I'd like to call attention to some confusion I see as it relates to an "Interim" response to a consumer complaint. Cutting to the chase, in my opinion, the Bureau should clarify the "Elements" required in an Interim Response or change their “Timely Response” definition to 60 Days.
Are there requirements for the substance of my company’s "interim" response?
Section 8 of the most recent Company portal manual describes the requirements for responding to consumer complaints. Within this section, the CFPB defines "Response" and "Interim response." An Interim Response is used when the company places a complaint “In progress.”
While the “Elements of a response” are clearly defined, the elements of an acceptable Interim response are not. This begs the question: Since the manual doesn’t outline a lesser set of “Elements,” should we assume that the Elements of a response still stand, even for an Interim Response?
Below you will see the Dodd Frank requirements, also repeated in the Company Portal Manual, and an explanation as to why I feel the Bureau creates a gray area in this matter.
Company Portal Manual
8.1 Providing a timely response
"The CFPB requests that your company provide a response to each complaint through the portal within 15 calendar days of the complaint being sent to your portal. Note that CFPB response time requirements do not replace or necessarily satisfy certain statutory or regulatory requirements (other than those found in section 1034(b), 12 U.S.C. 5534(b) of the Dodd-Frank Wall Street Reform and Consumer Financial Protection Act of 2010). When a complaint cannot be closed within 15 calendar days, your company may indicate that your work to close the complaint is “In progress” and provide a final responsive explanation to the consumer through the portal within 60 calendar days of the complaint being sent to your portal."
(a)Timely regulator response to consumers
The Bureau shall establish, in consultation with the appropriate Federal regulatory agencies, reasonable procedures to provide a timely response to consumers, in writing where appropriate, to complaints against, or inquiries concerning, a covered person, including:
(1) steps that have been taken by the regulator in response to the complaint or inquiry of the consumer;
(2) any responses received by the regulator from the covered person; and
(3) any follow-up actions or planned follow-up actions by the regulator in response to the complaint or inquiry of the consumer.
(b)Timely response to regulator by covered person
A covered person subject to supervision and primary enforcement by the Bureau pursuant to section 5515 of this title shall provide a timely response, in writing where appropriate, to the Bureau, the prudential regulators, and any other agency having jurisdiction over such covered person concerning a consumer complaint or inquiry, including:
(1) steps that have been taken by the covered person to respond to the complaint or inquiry of the consumer;
(2) responses received by the covered person from the consumer; and
(3) follow-up actions or planned follow-up actions by the covered person to respond to the complaint or inquiry of the consumer.
Why does this matter?
Today, based on the Company Portal Manual, you are required to provide a response in 15 calendar days, even when you choose “In progress.” With “In progresss,” the company provides an interim response directly to the consumer and the CFPB within 15 calendar days while preparing the final response explanation. The Company Portal Manual states the following:
“Your interim responsive explanation to the consumer and the CFPB, indicating that the complaint could not be closed within 15 calendar days and that your final responsive explanation to the consumer will be provided through the portal at a later date.”
The way I read this, you could be left out of compliance with the Dodd Frank Act simply by using the CFPB’s guidance here.
The CFPB has stated consistently that a “Response” is due in 15 calendar days. Therefore, it can be safely said, the CFPB has defined “Timely Response” as 15 Calendar Days.
The Dodd Frank elements of a response describe the minimum elements of a response. What must that interim response include?
The Company Portal manual states:
“The CFPB requires that all portal users provide, at a minimum, a response with the following elements” and goes on to quote the section 1034 of the Dodd Frank Act.
The problem – If a timely response has been established as 15 calendar days, and the elements of a response have been clearly defined, are you out of compliance if you do not include the elements of a response required by Dodd Frank in your “Interim” “In progress” response?
Examples of “Interim” responses:
We need more time to research your complaint. The company takes your complaint seriously. We are currently working on your issues and will respond when completed.
Clearly, the elements are not contained within the interim response examples above. One could assume the “final responsive explanation” issued at the end of the “In Progress” process would have those elements. However, if the elements were not delivered within the parameters of a “Timely” response, did the company issue a “Response” “Timely”?
If the complaint arrives January 1st and an Interim Response is issued without the Elements on January 10th, with the Final Response Explanation including the Elements, being issued on February 28th, was this a Timely Response?
I would recommend that each company review their response program and answer some of these questions. The Bureau has a gap. They require a 15 day (Timely) response (which includes the Elements of a Response), however their system and guidance indicate the elements, as prescribed by the Dodd Frank Act, are not required with an Interim Response? Or, at least this is not clear.
The Bureau should clarify the Elements required in an Interim Response or change their “Timely Response” to 60 Days.