New analysis by Deloitte studies what's inside the Consumer Financial Protection Bureau's controversial complaint database and finds that customer misunderstandings may generate more complaints than errors do, that affluent people in high-end neighborhoods were most often those doing the complaining, and that firms are doing a much better job responding to those complaints.

The CFPB data may, however,may raise concerns that banks are running afoul of fair lending laws and regulations, according to a seperate study by the National Community Reinvestment Coalition, an association that promotes minoroty access to banking services.

The Bureau, created by the Dodd-Frank Act, went live with its complaint database in July 2011. Launched with credit card complaints, the database has expanded to include mortgages, consumer loans, banks with more than $10 million in assets, private student loans, credit reporting problems, and more recently, money transfers and debt collection services.It is likely to reach 200,000 complaints by the end of the year.

The CFPB reviews complaints for completeness, jurisdiction, and non-duplication, and forwards them to firms for review and resolution. Firms are given 15 days to respond to each complaint and expected to resolve and close all but the most complex matters within 60 days. Consumers have the opportunity to dispute resolved complaints.

Mortgage-related issues accounted for more than half of the complaints submitted from March 1, 2012 to April 30, 2013, the time frame for more than 100,000 records reviewed by Deloitte. Most common complaints involved loan modification, collection, and foreclosure issues. The second most common category was credit card complaints and nearly 18 percent of reported problems revolved around bank accounts and bank services, mostly checking accounts. Student loan complaints actually declined over the analysis period, falling from 8.4 percent to 3.2 percent of total complaints.

Complaint Resolution

Financial institutions have a number of options for resolving consumer complaints.They can close a complaint in favor of the consumer by offering monetary or non-monetary relief, or decide the complaint has no merit.

Since the launch of the database, complaint resolution times have improved, with firms reducing their “untimely” response rate from 9.9 percent in December 2011 to 1.1 percent in April 2013. The percentage of complaints closed in favor of consumers, however, also declined during the same period, falling from nearly 40 percent in June 2012 to 18 percent in April 2013. This suggests, according to Deloitte, that many complaints might be the result of customer misunderstandings or frustration, rather than actual mistakes or operational errors by financial institutions. The statistics also show that consumers are disputing fewer resolutions.

Fewer disputes, combined with less relief, could illustrate that institutions are communicating more clearly with their customers and more accurately targeting the root cause of complaints. “Financial institution management and board members are expected to have a firm understanding of their organization's complaint history and demonstrate that consumer protection is not just acknowledged, but is an integral part of decision making and strategy,” the authors conclude. “To meet today's heightened expectations, financial institutions are likely to benefit from looking closely at CFPB consumer complaint data, as well as their own internal complaint databases, and the processes that impact their customer experience.”

Who are you?

Affluent, established neighborhoods were most often the source of complaints. This demographic likely uses more financial products and, therefore, has a greater chance of a problem, the study surmises. The data also showed  that a propensity to file mortgage complaints increased as the age of the areas' populations increased.

One implication is that the database may not be an accurate barometer of under-banked households and consumers in a lower socioeconomic demographic. Because they complain less than older, wealthier consumers, they run the risk of being overlooked by the CFPB, Deloitte says.

A similar analysis of bank account complaints released on Tuesday by the National Community Reinvestment Coalition, an association that promotes access to banking services, also found a “disproportionate amount of complaints submitted by residents of upper-income zip codes.” Its research, however, also found that minority communities were more likely to receive monetary relief as compensation for their complaints, although “the database does not indicate whether the relief was satisfactory."

The group claims the database data could show that minority communities are more likely than predominantly white communities to have their complaints unaddressed by banks, raising concerns about compliance with non-discriminatory lending requirements of the Fair Housing Act and related regulations.