119 Washington Ave. Albany, NY 12210 Phone 518.462.6831Fax 518.935.2852
www.empirejustice.org August 31, 2015
Director Richard Cordray
Consumer Financial Protection Bureau 1700 G St. N.W.
Washington, D.C. 20552 Docket No.: CFPB-2015-0030
Re: CFPB RFI - Feedback on Consumer Complaint Narratives and Data Normalization Dear Director Cordray,
Empire Justice Center appreciates the opportunity to provide feedback on the addition of consumer complaint narratives to the CFPB public database and how it is operating in practice. As an Americans for Financial Reform (AFR) member organization, we support their comments and would like to offer feedback related to a specific region in New York State that we believe further illustrates the need to revisit the scrubbing policy for zip codes.
Empire Justice Center is a statewide legal services organization with offices in Albany, Rochester, Westchester, and Central Islip (Long Island). We provide support and training to legal services and other community-based organizations, undertake policy research and analysis, and engage in legislative and administrative advocacy. We also represent low income
individuals, as well as classes of New Yorkers, in a wide range of poverty law areas including consumer law. Our consumer unit focuses on foreclosure defense and mortgage lending issues, though we also have experience with debt collection, credit reporting and other non-mortgage consumer cases.
We analyzed data for three different 3-digit zip codes in the Greater Rochester area and were able to identify a variety of details related to consumer issues and the companies that were being complained about in that region. Attached is a summary of our analysis of the complaints filed with the CFPB for zip codes 144XX, 145XX, and 146XX in Western New York. These zip codes comprise the majority of the zips in the Rochester, NY, MSA in Livingston, Monroe, Ontario, Orleans, Wayne, and Yates counties.
However, as described below, we were not able to analyze any possible disparate impact by race/ethnicity, income level, or neighborhood of the consumers filing those complaints. As we show below, we are concerned that the demographics within these broad 3-digit zip code groups vary dramatically - from dense inner city neighborhoods with a high concentration of poverty to sprawling wealthier suburban neighborhoods.
Page 2 of 5 For example, some of the zip codes within 146XX (such as 14611, 14619, and 14621) include neighborhoods that are low to moderate income with multiple census tracts that are majority minority residents, while others (such as 14626) are comprised of higher income neighborhoods and are predominantly white.
The table below of six zip codes beginning with 146 shows how the demographic makeup (race, income) of each is dramatically different.
Table: Race and Income Demographics for a Sample of 146XX Zip Codes
*Average adjusted gross income, 2012 Source: city-data.com
The average adjusted gross income in these zip codes ranges from $23,168 (14611) to $53,590 (14626).
Three of these zip codes (14611, 14619, and 14621) have a more than three-quarters majority of non-white residents.
o The zip with the highest percentage non-white population is 14611 with 83% non-white residents (also the lowest income at $23,168).
o The zip with the lowest percentage non-white population is 14626 with just 14% non-white residents (also the highest income $53,590). Our analysis of complaints in the 146XX zip codes shows:
Mortgages were the most complained about financial product.
The top 5 complaints were (see Tables 3-12) 1. Mortgage complaints at 34%.
o The most complained about company was HSBC (20%).
o The most complained about issue was loan modification, collection, and foreclosure (45%).
2. Debt collection complaints at 15%.
o The most complained about company was Citibank (7%). % white % non-white Income*
14606 Gates 59% 41% $ 35,090 14611 Rochester 17% 83% $ 23,168 14619 Rochester 20% 80% $ 31,642 14620 Rochester 68% 32% $ 43,789 14621 Rochester 19% 81% $ 23,858 14626 Greece 86% 14% $ 53,590 Demographics City ZIP Code
Page 3 of 5
o The most complained about issue was continued attempts to collect debt not owed (34%).
3. Credit card complaints at 15%.
o The most complained about company was Citibank (21%).
o The most complained about issue was identity theft/fraud/embezzlement (19%).
4. Bank account or service complaints at 14%.
o The most complained about company was RBS Citizens (21%).
o The most complained about issue was account opening, closing, or management (40%).
5. Credit reporting complaints representing 11% (61) of the total number of complaints.
o The most complained about company was Equifax (43%).
o The most complained about issue was incorrect information on credit report (62%).
The top 5 most-complained-about companies across all complaints were (see Tables 12-15) 1. HSBC (9%) 2. Bank of America (9%) 3. Wells Fargo (8%) 4. Citibank (8%) 5. JPMorgan Chase (7%)
Without access to 5-digit zip codes, it is impossible to determine if the complaints are
concentrated within any specific demographic. For instance, are the HSBC mortgage servicing complaints mostly from low income and/or minority zip codes, or mostly from high income white zip codes? Is Citibank attempting to collect debt not owed from low income
neighborhoods more often than high income neighborhoods? Is Equifax less likely to address the credit reporting mistakes of folks living in majority minority neighborhoods? The answers to these questions could guide outreach and education efforts to the folks that need it most while also informing policy decisions.
We already know from two reports that Empire Justice Center released earlier this year that:
Foreclosures, while prevalent throughout the MSA, were more concentrated in majority minority neighborhoods. (See Michael Hanley and Ruhi Maker, “In the Eye of the Storm: Why the Threat of Foreclosure Damage Continues,” March 19, 2015, as found at:
http://www.empirejustice.org/publications/reports/new/in-the-eye-of-the-storm.html#.VdxyUk10y70.)
Predominantly minority neighborhoods (80-100% non-white) in the city of Rochester experienced little to no home purchase lending in 2012 and 2013, while lending was robust in other parts of the Rochester area. (See map below.) (For full report, see Barbara Van Kerkhove, “The River Runs Dry II: The Persistent Mortgage Drought in Rochester’s Communities of Color,” July 28, 2015, as found at:
http://www.empirejustice.org/publications/reports/new/river-runs-dry-2.html#.Vbkf1_nzm3E.)
Page 4 of 5 Concentration of Home Purchase Loans Made in the City of Rochester &
Parts of Monroe County, 2012 & 2013
(1 dot = 1 loan origination; 1st lien non-high-cost loans on 1-4 family owner-occupied site-built dwellings)
With five digit zip code level information from the complaint narratives, we would be able to analyze if a critical mass of mortgage servicing complaints were concentrated within certain income or racial groups or in the bounds of certain neighborhoods. The same is true for all consumer complaints about financial services products. This would not only provide the CFPB with pertinent information for potential enforcement action but also give a much needed voice to consumers historically targeted by predatory practices.
While we appreciate the privacy concerns of making more detailed information about
complainants public, we need to have a robust conversation about capturing the disparate impact of even seemingly benign policies. Our nation’s longtime experience with the publicly available Home Mortgage Disclosure Act (HMDA) data, including census tract data and applicant
Page 5 of 5 Publishing consumer narratives is definitely a step in the right direction and we applaud the CFPB for the actions taken to protect consumers. We look forward to our continuing dialogue on this important issue.
Yours truly,
Ruhi Maker, Esq. Senior Attorney
Eleanor (Ellie) Pepper Regional Coordinator, HOPP
Anchor Partner Program
Alysha Alani Legal Intern
Consumer Financial Protection Bureau
Consumer Complaint Database
Data from Rochester, NY
ZIP Codes: 144XX, 145XX, 146XX
Ruhi Maker, Esq., Senior Attorney Alysha Alani, Legal Intern
Page 2 of 16
Summary of CFPB Consumer Complaint Data 2011-2015
Most complained about consumer financial products and services in the Greater Rochester Area ZIP codes 144XX – 146XX
(see Tables 1-2 and Figures 1-2)
1. Mortgages, 33% (352)
o The most complained about company was HSBC, 17% (58).
o The most complained about issue was loan modification, collection, and foreclosure, 47% (166).
2. Credit cards, 17% (182)
o The most complained about company was Citibank (19%).
o The most complained about issue was billing disputes (18%). 3. Debt collection, 16% (176)
o The most complained about company was Encore Capital Group (6%).
o The most complained about issue was continued attempts to collect debt not owed (36%). 4. Bank accounts or services, 12% (134)
o The most complained about company was First Niagara (17%).
o The most complained about issue was account opening, closing, or management (43%). 5. Credit reporting, 9% (99)
o The most complained about company was Equifax (47%).
o The most complained about issue was incorrect information on credit report (64%). 6. Student loans, 7% (72)
o The most complained about company was Navient (33%).
o The most complained about issue was repaying a loan (43%). 7. Consumer/Auto loans, 5% (52)
o The most complained about company was Wells Fargo (15%).
o The most complained about issue was managing the loan or lease (60%).
8. Money transfers, prepaid credit cards, and other financial services each accounted for less than 1% of the total number of complaints (1,078).
Page 3 of 16
The top 5 most complained about companies across all complaints in ZIP codes 144XX - 146XX
(see Table 13) 1. Bank of America, 8% (90) 2. Citibank, 8% (83) 3. HSBC, 7% (78) 4. Wells Fargo, 7% (76) 5. JPMorgan Chase, 7% (72)
In comparison, data reported in the CFPB’s Monthly Complaint Report Vol. I - July 2015 ranked Bank of America as the 3rd most complained about company nationwide since July 21, 2011, trailing Equifax in 1st place and Experian in 2nd.
The most complained about consumer financial products and services in 146XX ZIP codes
(see Tables 1-2 and Figure 2)
1. Mortgages, 34% (194)
The most complained about company was HSBC, 20% (39).
The most complained about issue was loan modification, collection, and foreclosure, 45% (87). 2. Debt collection, 15% (88).
The most complained about company was Citibank, 7% (6).
The most complained about issue was continued attempts to collect debt not owed, 34% (30). 3. Credit cards, 15% (84).
The most complained about company was Citibank, 21% (18).
The most complained about issue was identity theft/fraud/embezzlement, 19% (16). 4. Bank accounts or services, 14% (77).
The most complained about company was RBS Citizens, 20% (15).
The most complained about issue was account opening, closing, or management, 40% (31). 5. Credit reporting, 11% (61).
The most complained about company was Equifax, 43% (26).
The most complained about issue was incorrect information on credit report, 62% (39). 6. Student loans, 6% (33).
The most complained about company was Navient, 36% (12).
Page 4 of 16
The top 5 most complained about companies across all complaintsin 146XX ZIP codes
(see Table 15) 1. HSBC, 9% (50) 2. Bank of America, 9% (49) 3. Wells Fargo, 8% (48) 4. Citibank, 8% (44) 5. JPMorgan Chase, 7% (38)
Page 5 of 16
TABLE 1: Complaint Volume by Product and ZIP Code
FIGURE 1: Complaint Volume by Product for All ZIP Codes
Bank Account or Service Consumer/ Auto Loan Credit Card Credit Reporting Debt Collection Money Transfer Mortgage Other Financial Service Payday Loan Prepaid Credit Card Student Loan All Products 21 9 38 19 32 3 72 2 0 1 14 211 36 13 60 19 56 2 86 0 0 0 25 297 77 30 84 61 88 1 194 0 0 2 33 570 # 134 52 182 99 176 6 352 2 0 3 72 1078 % 12% 5% 17% 9% 16% 1% 33% <1% 0% <1% 7% 100% Product ZIP Code All ZIP Codes 144XX 145XX 146XX
Page 6 of 16
FIGURE 2: Complaint Volume by Product and ZIP Code 3
Page 7 of 16
TABLE 2: Top 5 Complaints per ZIP Code
1 2 3 4 5 144XX Mortgage Complaints Credit Card Complaints Debt Collection Complaints Bank Account or Service Complaints Credit Reporting Complaints 145XX Mortgage Complaints Credit Card Complaints Debt Collection Complaints Bank Account or Service Complaints Student Loan Complaints 146XX Mortgage Complaints Debt Collection Complaints Credit Card Complaints Bank Account or Service Complaints Credit Reporting Complaints
All ZIP Codes Mortgage
Complaints Credit Card Complaints Debt Collection Complaints Bank Account or Service Complaints Credit Reporting Complaints
ZIP Code Top 5 Complaints
Mortgage complaints were the top complaint in all 3 ZIP codes. Mortgage complaints were 34% (72) of complaints in 144XX.
Mortgage complaints were 29% (86) of complaints in 145XX.
Mortgage complaints were 34% (194) of complaints in 146XX.
Page 8 of 16
TABLES 3-12: Complaints by Issue
The most frequently reported issue among debt collection complaints in 146XX was continued attempts to collect debt not owed (34%).
TABLE 4 3
TABLE 3
Page 9 of 16
TABLE 6 3
TABLE 7 3
The top 3 issues reported among credit card complaints in 146XX were 1. Identity theft/fraud/embezzlement (19%)
2. Billing disputes (17%) 3. Late fees (10%)
TABLE 5 3
144XX 145XX 146XX All ZIP Codes
8 18 31 57 10 6 19 35 0 3 2 5 1 7 23 31 2 2 2 6 TOTAL 21 36 77 134 Using a debit or ATM card
Type of Complaint
Account opening, closing, or management Deposits and withdrawals
Making/receiving payments, sending money Problems caused by my funds being low
Bank Account or Service Complaints
Frequency
TABLE 6
The most frequently reported issue among bank account or service complaints in 146XX was account opening, closing, or management (40%).
Page 10 of 16 144XX 145XX 146XX All ZIP Codes
0 0 3 3
1 4 6 11
13 11 39 63
5 4 13 22
TOTAL 19 20 63 102 Credit monitoring or identity protection
Type of Complaint
Unable to get credit report/credit score Incorrect information on credit report Credit reporting company's investigation
Credit Reporting Complaints
Frequency
The most frequently reported issue among credit reporting complaints in 146XX was incorrect information on credit report (62%).
TABLE 7
The most frequently reported issue among student loan complaints in 146XX was problems when the consumer was unable to pay (46%).
TABLE 8 3
The most frequently reported issue among consumer/auto loan complaints in 146XX was managing the loan or lease (18%).
Page 11 of 16
Note: While complaint volume is low for some products, this does not mean that problems do not exist. Rather, we need to increase outreach and encourage consumers to voice complaints about these products.
The only issue reported under money transfer complaints in 146XX was incorrect/missing disclosures or information.
TABLE 11 TABLE 10 3
The only issue reported under prepaid card complaints in 146XX was unauthorized transactions / transaction issues.
TABLE 12
Page 12 of 16
TABLES 13-16: Top 10 Most Complained About Companies Across All Complaints by ZIP Code
Rank Company Number of
Complaints 1 Bank of America 90 2 Citibank 83 3 HSBC 78 4 Wells Fargo 76 5 JPMorgan Chase 72 6 Equifax 46 7 Capital One 40 8 M&T Bank 39 9 RBS Citizens 34 10 Ocwen 33
All ZIP Codes
Rank Company Number of Complaints
1 Bank of America 20 2 Citibank 15 3 JPMorgan Chase 12 4 HSBC 11 5 Capital One 11 6 Equifax 10 7 Ocwen 10 8 Wells Fargo 9 9 RBS Citizens 8 10 Nationstar Mortgage 8 144XX
Rank Company Number of
Complaints 1 Citibank 24 2 JPMorgan Chase 22 3 Bank of America 21 4 Wells Fargo 19 5 HSBC 17 6 M&T Bank 13 7 Capital One 11 8 Ocwen 11 9 Equifax 10 10 Navient 10 145XX
Rank Company Number of Complaints
1 HSBC 50 2 Bank of America 49 3 Wells Fargo 48 4 Citibank 44 5 JPMorgan Chase 38 6 Equifax 26 7 RBS Citizens 24 8 Experian 20 9 M&T Bank 19 10 Capital One 18 146XX T A B L E 1 5 T A B L E 1 6 T A B L E 1 3 T A B L E 1 4 TABLE 9 3
Page 13 of 16
FIGURE 3: Greater Rochester Area ZIP Code Map
Page 14 of 16
TABLE 16: City and ZIP Code Key, 144XX
ADAMS BASIN 14410 ALBION 14411 ALTON 14413 AVON 14414 BELLONA 14415 BERGEN 14416 BRANCHPORT 14418 BROCKPORT 14420 BYRON 14422 CALEDONIA 14423 CANANDAIGUA 14424 FARMINGTON 14425 CASTILE 14427 CHURCHVILLE 14428 CLARENDON 14429 CLARKSON 14430 CLIFTON SPRINGS 14432 CLYDE 14433 CONESUS 14435 DANSVILLE 14437 DRESDEN 14441 EAST ROCHESTER 14445 E WILLIAMSON 14449 FAIRPORT 14450 FANCHER 14452 FISHERS 14453 GENESEO 14454 GENEVA 14456 GORHAM 14461 GROVELAND 14462 HALL 14463 HAMLIN 14464 HEMLOCK 14466 HENRIETTA 14467 HILTON 14468 BLOOMFIELD 14469 HOLLEY 14470 HONEOYE 14471 HONEOYE FALLS 14472 IONIA 14475 KENDALL 14476 KENT 14477 KEUKA PARK 14478 LAKEVILLE 14480 LEICESTER 14481 LE ROY 14482 LIMA 14485 LIVONIA 14487 LIVONIA CENTER 14488 LYONS 14489
TABLE 17: City and ZIP Code Key, 145XX
MACEDON 14502 MARION 14505 MENDON 14506 MIDDLESEX 14507 MORTON 14508 MOUNT MORRIS 14510 MUMFORD 14511 NAPLES 14512 NEWARK 14513 NORTH CHILI 14514 NORTH GREECE 14515 NORTH ROSE 14516 NUNDA 14517 OAKS CORNERS 14518 ONTARIO 14519 ONTARIO CENTER 14520 OVID 14521 PALMYRA 14522 PAVILION 14525 PENFIELD 14526 PENN YAN 14527 PERKINSVILLE 14529 PERRY 14530 PHELPS 14532
Page 15 of 16 PIFFARD 14533 PITTSFORD 14534 PORTAGEVILLE 14536 PORT GIBSON 14537 PULTNEYVILLE 14538 RETSOF 14539 ROMULUS 14541 ROSE 14542 RUSH 14543 RUSHVILLE 14544 SCOTTSVILLE 14546 SENECA CASTLE 14547 SHORTSVILLE 14548 SILVER LAKE 14549 SILVER SPRINGS 14550 SODUS 14551 SODUS POINT 14555 SONYEA 14556 SOUTH BYRON 14557 SPENCERPORT 14559 SPRINGWATER 14560 STANLEY 14561 UNION HILL 14563 VICTOR 14564 WALWORTH 14568 WARSAW 14569 WATERPORT 14571 WAYLAND 14572 WEBSTER 14580 WEST 14585 BLOOMFIELD WEST HENRIETTA 14586 WILLARD 14588 WILLIAMSON 14589 WOLCOTT 14590 WYOMING 14591 YORK 14592
TABLE 18: City and ZIP Code Key, 146XX
ROCHESTER 14604-14605 GATES 14606 ROCHESTER 14607-14608 IRONDEQUOIT 14609 BRIGHTON 14610 ROCHESTER 14611 GREECE 14612 IRONDEQUOIT 14613-14614 ROCHESTER 14615-14616 IRONDEQUOIT 14617 BRIGHTON 14618 ROCHESTER 14619 ROCHESTER 14620 ROCHESTER 14621 IRONDEQUOIT 14622 ROCHESTER 14623 GATES 14624 PENFIELD 14625 GREECE 14626 ROCHESTER 14627 ROCHESTER 14638-14639 ROCHESTER 14642-14647 ROCHESTER 14649-14653 ROCHESTER 14692 ROCHESTER 14694
Page 16 of 16
TABLE 19: Demographics in a Sample of 146xx Zip Codes
This table illustrates the diversity in demographics within ZIP codes starting with the same three digits. ZIP codes with a majority (<50%) non-white population are highlighted in blue.
City ZIP Code
Racial Demographics Total
Population Income*
White alone Non-white
Gates 14606 59% 41% 28,255 $35,090 Rochester 14611 17% 83% 17,396 $23,168 Rochester 14619 20% 80% 14,749 $31,642 Rochester 14620 68% 32% 25,141 $43,789 Rochester 14621 19% 81% 33,802 $23,858 Greece 14626 86% 14% 30,041 $53,590
*Average adjusted growth income, 2012 SOURCE: city-data.com
