By: Alan Zibel | The Wall Street Journal
WASHINGTON—Bank of America Corp. accounted for the largest share of consumer complaints lodged with the Consumer Financial Protection Bureau over the past 16 months, highlighting the challenges the nation’s second-largest bank faces as it tries to simplify its sprawling operations.
The CFPB’s expanded database, unveiled Thursday, shows the majority, or nearly 55%, of the more than 90,000 complaints filed with the agency relate to mortgages, the latest indication of the problems banks face in response to a surge in foreclosures. Credit cards ranked as the second-biggest source of complaints, accounting for almost 22% of the total.
Complaints about Bank of America outpaced Wells Fargo & Co. and J.P. Morgan Chase & Co., whose consumer operations are comparable in size. The Charlotte, N.C.-based bank accounted for about 23% of the total complaints related to mortgages, credit cards, student loans and other consumer products filed with the agency since December 2011, according to a Wall Street Journal analysis of CFPB data. Wells Fargo accounted for nearly 14%, and J.P. Morgan 11%.
Agence France-Presse/Getty Images Bank of America accounted for about 23% of the total complaints to the CFPB over the past 16 months.
The biggest source of complaint leveled against Bank of America related to mortgages, with the bank accounting for about 31% of all mortgage-related complaints. Bank of America, along with other banks, has been criticized by regulators for failing to verify whether a homeowner belongs in foreclosure and has paid out more than $50 billion in legal settlements related to the mortgage crisis.
Bank of America has been trying to dig its way out of the ill-fated 2008 purchase of mortgage lender Countrywide Financial. It has scaled back mortgage lending operations of late, cutting off relationships with mortgage brokers. The bank slipped to the fifth-largest mortgage lender in the U.S. in the fourth quarter of last year, according to trade publication Inside Mortgage Finance, but remains the second-largest servicer of mortgage loans.
“Our need to get these issues completely behind us is still high,” Bank of America Chief Executive Brian Moynihan said in a television interview with Charlie Rose earlier this week.
Wells Fargo accounted for about 16% of mortgage-related complaints, while J.P. Morgan accounted for about 10%.
A Bank of America spokesman said virtually all complaints forwarded from CFPB to the bank have been resolved. “The servicing of mortgage loans in delinquency or foreclosure predictably results in more frequent customer concerns, as reflected in figures for all institutions in the report,” the spokesman said. “We have been intensely focused on improving the process for our mortgage servicing customers.”
A Wells Fargo spokesman said: “When we get complaints directly from our customers or through the CFPB, we thoroughly investigate them and if we’ve made a mistake, we work to do what’s right for our customer.”
A J.P. Morgan spokeswoman said the bank is looking “to resolve customer issues as quickly as possible. Our customer satisfaction ratings have improved dramatically in the last year.”
The CFPB provided limited detail about specific complaints and didn’t validate the factual charges behind them. CFPB officials said they verify that each consumer is an actual customer of a financial institution before adding a complaint to the database. The 2010 Dodd-Frank financial law allows the agency to make a complaint database accessible to the public.
The banking industry, which has long opposed release of the data, criticized the CFPB’s move and said it could unfairly damage an institution’s reputation. “A better service to consumers would have allowed for collaboration between the CFPB and financial institutions to determine if a complaint is indeed valid, prior to publication,” said Richard Hunt, chief executive of the Consumer Bankers Association.
Officials at the consumer bureau said the database will help consumers make better decisions and give regulators a tool to track and better police the financial industry. “The ability to create and utilize new data that illuminates what is happening to consumers, in real time, can be immensely valuable,” CFPB Director Richard Cordray said at a hearing Thursday in Iowa.
The database, expanded from a narrower list of 19,000 complaints lodged against credit-card firms released last summer, includes searchable information about individual complaints, including the names of the firms, the type of complaint and the customer’s ZIP Code.