CFPB To Begin Accepting Small Business Loan Complaints
Unhappy with your small business loan? The CFPB wants you to complain to the federal government about it. Small business loans including term loans, credit lines, and business credit cards, among other products, and lenders both small and large banks and non-banks such as online or marketplace lenders will soon all answer to the CFPB.
“Subject to an assessment of feasibility, the Bureau’s consumer response team will build the infrastructure to intake and analyze small business lending complaints,” a new priority report says.
That would add a new category alongside mortgages, student loans, vehicle loans, and payday loans.
Accepting these reports will likely mean that small business lenders would have to respond directly to the CFPB. Companies who receive a lodged complaint typically have 15 days to provide an answer. Both the complaint and the answer are stored in a public database that anyone can view.
In their report, the CFPB states that “existing research suggests that significant discrimination against minorities may exist in the small business lending market.” However, no link to any such research is provided and historically they’ve made such judgments (with stunning inaccuracy) by guessing the racial makeup of last names.
The CFPB accepts a wide range of complaints. Some companies have been reported simply because a company representative came off as rude over the phone. In other cases, company customer service was reportedly too slow or website outages caused undue stress.
Small business lenders can’t be penalized by the CFPB, but receiving a disproportionate number of complaints could certainly place one on a regulatory radar.
Over the next two years, “the Bureau will build a small business lending team and begin market research and outreach for rulemaking on business lending data collection,” the report promised.Last modified: February 29, 2016
Sean Murray is the President and Chief Editor of deBanked and the founder of the Broker Fair Conference. Connect with me on LinkedIn or follow me on twitter. You can view all future deBanked events here.