CARY, N.C. -

A pair of legal experts with decades of compliance experience shared a strategy that might help finance companies clear the latest hurdle placed in front of them by the Consumer Financial Protection Bureau — complaints being pushed out online for all the public to see.

The CFPB finalized its policy last month on why the regulator chose to allow these complaints to be made available, a move Michael Thurman said “sounds unfair to me.”

Thurman spent more than 20 years of his nearly three-decade career at firms including Keesal, Young & Logan as well as Loeb & Loeb before opening his own firm about a year ago. Thurman explained to SubPrime Auto Finance News that what the CFPB is orchestrating now is something unlike almost anything he’s seen previously.

“We were all taught there are two sides to every story. But in this case, the company doesn’t get a chance to tell its side,” Thurman said. “Instead, the company must choose from ‘a set list of structured company response options’ created by the CFPB.

“If the options are as vague as those used on the CFPB complaint database for describing consumer complaint, they won’t be very helpful,” he continued. “I seriously doubt a company will be able to select the option: ‘This complaint is a complete fabrication.’

“More importantly,” Thurman went on to say, “the CFPB admits that it ‘is not committing to verify the details contained in each complaint narrative.’ So what’s the value of a set of unverified complaints?  If a group of Facebook or Twitter followers elects to barrage an auto finance company with a bunch of unverified complaints, how does that add any information to the public’s or the regulator’s knowledge about the company?

“For a data-driven, information-based 21st century regulator, it appears this new consumer complaint process will operate more like a rumor mill,” he added.

Also sharing her thoughts about the ramifications of the CFPB complaint database protocol was Jonna Boyle, president of Iron Compliance, a consulting firm in Arlington, Texas. Boyle previously served in compliance posts at SFG Finance, Santander Consumer USA and Triad Financial and is a board member of the National Automotive Finance Association.

“The impact of this policy may be largely determined by if and how the industry responds to the complaint narratives that are published on the CFPB's website,” Boyle said. “If the industry remains silent and chooses not to provide any of the structured responses, the impact could be minimal.”

Boyle then touched on whether finance companies should designate a staff member to watch the CFPB complaint database or even add more compliance personnel.

“Providing responses could open the door to an increase in complaint volume, but not enough to require additional staff in the short term,” Boyle said. “The smart strategy would be to respond to complaints as required, but opt out of the public response.

“It’s better if finance companies avoid drawing attention to themselves in such a pro-consumer forum,” she continued. “However, if a company chooses to stand their ground and publicly disagree with a consumer, they should also be ready to publicly declare when a consumer is right. Responding selectively will not go unnoticed. It’s all or nothing.”

Boyle added that she would advise finance companies not to make their CFPB complaint database responses public.

“All public complaint forums such as the Better Business Bureau and online complaint boards are optional, and the CFPB has chosen to make this public response optional for now,” she said. “As long as the finance companies are responding to the complaint as required, no other action is necessary.”