{"id":5044,"date":"2023-05-01T19:38:46","date_gmt":"2023-05-01T19:38:46","guid":{"rendered":"https:\/\/africanamericanvoice.net\/?p=5044"},"modified":"2023-05-02T19:41:50","modified_gmt":"2023-05-02T19:41:50","slug":"credit-reporting-topped-cfpb-debt-collection-complaints-in-2022","status":"publish","type":"post","link":"https:\/\/africanamericanvoice.net\/?p=5044","title":{"rendered":"Credit Reporting Topped CFPB Debt Collection Complaints in 2022"},"content":{"rendered":"\n


by\u00a0Charlene Crowell, Special to The Informer<\/a><\/p>\n\n\n\n

Despite the rate of inflation slowing from last year\u2019s 40-year high, elevated household costs still plague most families. Findings from recent reports from the Consumer Financial Protection Bureau (CFPB) and the New York Federal Reserve help illuminate the top financial concerns of consumers.    <\/p>\n\n\n\n

Congress requires CFPB to monitor and regularly publish reports on key credit issues. One such report is an annual compilation and analysis of the concerns consumers bring to its attention. Known as CFBP\u2019s Consumer Response Annual Report, the 2022 edition shares that nearly two million consumers from every state as well as American territories such as Puerto Rico and the Virgin Islands filed complaints last year.  <\/p>\n\n\n\n

Regardless of how complaints are filed \u2014 website, telephone or mail \u2014 each is monitored to assess compliance with consumer laws and risks in the marketplace. The agency allows up to 60 days from the date they receive complaints to provide a final response to the CFPB and the consumer. Last year, more complaints, per capita, came from Georgia than any other state, followed by Delaware, Florida and the District of Columbia.<\/p>\n\n\n\n

Nearly 95% of these complaints in\u00a02022 were about credit or consumer reporting; debt collection, credit card, checking or savings account; and mortgages.<\/p>\n\n\n\n

For example, 76% of last year\u2019s complaints \u2014 or 978,00 total \u2014 were about the three national credit reporting bureaus, Equifax, Experian and TransUnion. More than half of 2022 complaints in this category came from consumers under the age of 62, reflecting the importance of credit bureaus\u2019 role in determining which consumers can access affordable credit to buy a home, secure auto financing, or obtain a credit card. <\/p>\n\n\n\n

According to CFPB\u2019s report, \u201cConsumers also sometimes reported that they met the disclosed terms of credit card reward offers, but the rewards were not given. Some consumers said they applied for credit cards that included account opening bonuses, but the reward bonuses were not issued. Other consumers reported that they lost accrued awards when their credit cards were closed.\u201d  <\/p>\n\n\n\n

But CFPB found credit repair questions had the greatest percentage of growth last year \u2014 up 94% from 2021.  <\/p>\n\n\n\n

\u201cConsumers often expressed dissatisfaction with the benefits they received from credit repair companies, often stating that the cost of the services offered was not worth the benefits provided,\u201d CFBP stated. \u201cIn their responses, companies sometimes stated that they were unable to guarantee specific results.\u201d  <\/p>\n\n\n\n

By contrast, debt collection concerns, a long-time leader in consumer complaints, dropped 5% to the second-highest complaint area with 115,900 requests. Despite the decrease in number of debt collection complaints, the leading reason remains the same since 2013: consumers being hounded for debts they do not owe. <\/p>\n\n\n\n

To be clear, though, a growing number of consumers are still struggling with debt. The New York Federal Reserve\u2019s 2022 Quarterly Report on Household Debt and Credit<\/a> noted that credit card balances increased $61 billion in the fourth quarter to $986 billion, surpassing the pre-pandemic high of $927 billion. Additionally, auto loan balances increased by $28 billion in the fourth quarter, consistent with the upward trajectory seen since 2011. And student loan balances now stand at $1.60 trillion, up by $21 billion from the previous quarter.  <\/p>\n\n\n\n

\u201cCredit card balances grew robustly in the 4th quarter, while mortgage and auto loan balances grew at a more moderate pace, reflecting activity consistent with pre-pandemic levels,\u201d said<\/a> Wilbert van der Klaauw, economic research adviser at the New York Fed. \u201cAlthough historically low unemployment has kept consumer\u2019s financial footing generally strong, stubbornly high prices and climbing interest rates may be testing some borrowers\u2019 ability to repay their debts.\u201d <\/p>\n\n\n\n

A related blog<\/a> by the Fed showed that an increasing number of younger borrowers are beginning to miss some credit card and auto loan payments:<\/p>\n\n\n\n

\u201cAs interest rates rise, so does the cost of borrowing, and higher interest rates result in higher minimum monthly payments for credit card balances. On the other hand, most auto loans are fixed-rate loans, so only auto loans taken out more recently faced these higher rates. This difference between credit card debt (variable rates) and auto loans (fixed rate) is consistent with the pattern of delinquencies rising faster for credit cards than for auto loans and may be evidence of higher interest rates driving some of the increase in delinquency.\u201d  <\/p>\n\n\n\n

After acknowledging the effects of rising inflation, the Fed\u2019s blog raised questions about the long-term effects of these and other financial stress points.  <\/p>\n\n\n\n

\u201cAmericans have been facing higher prices everywhere though \u2014 including on purchases they may be putting on their credit cards \u2014 at the grocery store, at the gas pump, and for many other types of goods. It is possible that increasing prices \u2014 and correspondingly, debt service payments\u2014are cutting into borrowers\u2019 balance sheets and making it more difficult for them to make ends meet, particularly as real disposable income fell in 2022,\u201d concluded the Fed.\u00a0<\/p>\n\n\n\n

Source: Published without changes from Washington Informer Newspaper<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

by\u00a0Charlene Crowell, Special to The Informer Despite the rate of inflation slowing from last year\u2019s 40-year high, elevated<\/p>\n","protected":false},"author":2,"featured_media":5045,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[32,8,24],"tags":[66,199,78],"class_list":["post-5044","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-online-newspaper","category-regular-column","tag-african-american","tag-credit-reporting","tag-racial-discrimination"],"aioseo_notices":[],"aioseo_head":"\n\t\t\n\t\n\t\n\t\n\t\n\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t\n\t\t