By Jennifer Buffaloe, Sr. Director, Customer Success, and Lauretta Campestre, AVP, Success Strategy, CallMiner

We’ve all heard the rumors and seen the news – the Consumer Financial Protection Bureau (CFPB) is facing potential defunding, which could reshape the landscape of consumer protection in the United States. While regulations like FDCPA, UDAAP and FCRA still stand, reduced enforcement has the potential to shift where consumer complaints and actions come from, as well as to shift the trust consumers have in businesses.

Source: CFPB public complaint database & reporting

Over the past 20 years, the CFPB has issued $19 billion in consumer relief, spanning monetary compensation, principal reductions and cancelled debt. Further, the Bureau has imposed approximately $5 billion in civil penalties on companies violating consumer financial laws. Without the same level of federal oversight, companies may face increased scrutiny from consumers, state regulators, and even civil litigation. Are you prepared for the shift?

Let’s explore what could change, the potential impacts, and what you should be considering to ensure consumer trust and protection.

Understanding the CFPB’s role: Enforcement, not regulation

The CFPB’s power lies in enforcement. Designed to protect consumer financial rights, it has been the watchdog to ensure organizations comply with existing regulations, including:

• FDCPA (Fair Debt Collection Practices Act)
• UDAAP (Unfair, Deceptive, or Abusive Acts and Practices)
• FCRA (Fair Credit Reporting Act)

However, with potential defunding and reduced proactive enforcement, businesses might feel a momentary sigh of relief. But is this really a win?

Potential impact & what we need to know

While changes in enforcement may be on the horizon, customer complaints and concerns won’t stop. You need to understand the potential impacts to your business.

• Shift in complaints submission: Without the CFPB database, direct complaints will shift to the states' Attorney Generals, the Better Business Bureau, and civil and class action lawsuits. This can drive complaint volume to your business that you may not be staffed for or have the systems in place to handle.

Source: CFPB Consumer Complaints

• Shift in consumer trust and expectations: Consumers might question who is holding companies accountable to fair financial practices. Consumers have come to expect standard complaint collection and swift responses. If you don’t have a transparent message about your approach to consumer protection and complaint response in the market, you may see consumer churn as a result.
• Shift in legislation: States will likely pick up where the CFPB left off – creating bespoke legislation to protect their residents. These would require action by companies to stay compliant in any given state, whether that is updating policy or incorporating new systems and teams.

What should businesses consider?

1. Self-regulation: Protecting your reputation - With reduced federal oversight, self-regulation is more important than ever. Ensuring you have a way to monitor regulatory requirements and can analyze common failure points for continuous improvement will be key to ensuring consumer protection and brand protection.
2. Public relations efforts: Building consumer trust - In a landscape where consumers might question who’s keeping businesses accountable, transparency and fair practices are powerful differentiators. The CFPB has shaped consumer expectations to complaint responses. Consumers will still expect to be able to issue complaints and get responses in a timely manner, with or without the CFPB.
3. Legal preparations: Anticipating civil challenges - In lieu of the CFPB complaint database, more consumers may seek enforcement through civil means. The regulations themselves are not going away, so there is the potential to see a shift in the legal landscape, as consumers seek advice elsewhere and as law firms aggressively market to dissatisfied consumers. Businesses need to be prepared for an increase in individual and class action lawsuits.
4. Monitoring legislative changes: Staying ahead of the curve - If states take the lead in consumer protection, businesses will be expected to navigate a fragmented and increasingly complex regulatory landscape. The challenge is not just about staying compliant, but also about staying agile in an environment where rules and enforcement can vary widely state to state. It’s important to keep a watchful eye on continued regulatory changes and consider grass roots engagements to influence a more balanced enforcement approach.
5. Scaling self-regulation: Embracing technology - With the potential increase in complaint volumes and the complexity of compliance requirements, leveraging technology is no longer optional – it’s essential. Artificial intelligence (AI)-powered tools, like conversation intelligence and data analytics, enable businesses to monitor consumer sentiment, identify compliance risks, and scale self-regulation efforts efficiently.

The question is, how effectively are you utilizing technology to navigate these challenges?

Conclusion: Stay ahead, stay compliant, stay trusted

The potential defunding of the CFPB isn’t just a shift in enforcement, it’s a shift in responsibility. Consumers expect that their concerns are being heard and actioned in a timely manner. Brands can reassure trust by:

• Anticipating legal changes by staying abreast of new legislation and considering grassroots influence
• Engaging with customers early and often, communicating your approach, responding to complaints timely and building trust with your consumers during this shift
• Strengthen self-regulation policies to protect your brand’s reputation
• Embracing today’s technology solutions – alongside the right partners – to help ensure your business is doing right by your customers, remaining compliant to laws, and continuous improvement for future legislation

Are you ready for the shift?

If the landscape of consumer protection changes, are you ready to navigate it? Conversation intelligence allows businesses to actively monitor consumer vulnerability and ensure compliance, fostering a culture of continuous improvement – building trust and safeguarding your reputation.

If you’re a CallMiner customer, engage with your customer success team today and let’s discuss how you’re preparing:

• Complaint management: Create workflows that identify and notify your teams to respond to customer complaints no matter what the channel. Leverage complaint data across conversations to uncover root causes complaints. Finally, conduct personalized outreach to close the loop on consumer complaints.
• Federal and state regulatory compliance: Guide your agents in real time and through proactive coaching to comply with state and federal regulatory requirements.
• Legal research: Allow legal staff to leverage AI for summarization and classification, making review and research of customer engagements more efficient.

Hear how CallMiner customers are tackling compliance to mitigate regulatory risk, increase revenue and ensure customer trust:

• Exeter Finance integrated conversation intelligence to migrate risks associated with regulatory compliance

• Radius uses conversation intelligence to understand their agents and customers to increase revenue and mitigate risk.

Stay ahead. Stay compliant. Stay trusted.