A new publicly available database of consumer complaintsabout big bank credit card programs may benefit credit unionstrying to market their card programs, industry observersspeculated.

Credit unions are known for having more consumer friendly creditcard programs, but they are often slow to market cards on thosequalities.

“This represents another tremendous opportunity for the3,200-plus card-issuing credit unions to promote their credit cardprograms. Time to put the credit card product front and center ontheir credit union website homepage,” said Ondine Irving, a consumer card advocate and founder of thecredit union card website, Credit Card Connection.

Since the database only included card issuers with more than $10billion in assets, it’s unlikely that it will contain many creditunion issued cards directly, but Irving pointed out that creditunions that partnered with major bank card issuers could find theywind up on the database through that association.

“For those credit unions who have sold their program tobanks–don’t be surprised if complaints creep up about your pseudocredit union card program–due to the higher rates, member serviceissues and fees–which are typically not found on credit unionissued card programs,” she added.

That may be true, but the agency’s initial release of thedatabase had only 137 listings and only one credit union cardpartner, Bank of America, was among the bank’s listed.

“No longer will consumer complaints only be known to theindividual complainant, bank, regulator and those in the publicwilling to pursue this information through the Freedom ofInformation Act,” the agency wrote in a weblog entry about thedatabase that was made available last week. “Instead this data-richwindow into consumer financial issues will be widely available toeveryone: developers, policymakers, journalists, academics,industry and you. Our goal is to improve the transparency andefficiency of the credit card market to further empower Americanconsumers.”

The database was not welcomed as a good thing by all creditunions, even if I would almost exclusively focus on bank cards.

“NAFCU understands the CFPB has the authority to investigatelegitimate consumer complaints,” said NAFCU CEO Fred Becker.“Unfortunately, we fear that this new database may open the door tofrivolous and unsubstantiated complaints. In addition, given thenature of viral media, disclosing all complaints may paint amisleading picture and trigger reputational risks for solidinstitutions that could raise safety and soundness concerns for thefinancial institutions in question.”

In a Jan. 30 comment letter, the association argued that theagency should only post complaint information that it had somehowverified. “Disclosing every complaint, without any indication ofthe veracity of the complaint, is inherently misleading,” NAFCUwrote. “NAFCU encourages the CFPB to implement a system thatdistinguishes between legitimate complaints and baseless complaintsthat are without merit, and to disclose only those complaints thatare justified.”

CUNA made a similar point in its Jan. 30 comment letter aboutthe agency’s policy statement that underpinned the database. “CUNA supports the ability of consumers to have timely and clearinformation on responsible credit card use. However, we do notsupport the public release of certain credit card complaintinformation that is separate from and in addition to the agency’speriodic reports and analysis, which provide more complete creditcard complaint information to consumers. While we do not anticipatethat credit unions, as member owned cooperatives, will be thesubject of a sizable number of complaints, nonetheless we haveconcerns the proposed public data release could have unintendedconsequences.”

But social media experts suggested that both associations’objections to the database are out of touch with how most consumersuse the Internet and things like consumer reviews of products andservices to make purchasing decisions.

“Having verified consumer reviews of a product or service issimply incredibly rare,” said Brent Franson, vice president withReputation.com, a Web-based service that helps small businesses andprofessionals monitor and protect their online reputations. “If Igo to Google travel and review a destination, nobody comes andchecks up on me that I actually went there or if I actually ate ina given restaurant or even who I am. I could be anonymous.”

That would seem to make consumer reviews of limited utility toconsumers, but Franson pointed out that 92% of consumers surveyednow say they check reviews before purchasing a product orservice.

What NAFCU and CUNA may fail to understand is that reviews’utility is in the aggregate, not the individual reviews, Fransoncontended. Just as consumers understand and discount any singlereview as possibly not representative and will instead evaluate anumber of reviews, most consumers will look at the complaints inthe database in the same way and evaluate consumer complaints aboutan given bank’s cards like they use consumer reviews, he added.

Jeff Russell, CEO of a card issuing CUSO TMG FinancialServices, tended to see both sides of the question. “Nobody isgoing argue against transparency,” Russell said, “But I can’t helpwishing that the agency had a procedure for removing complaintsthat have been found inaccurate or have been resolved.”Nonetheless, he said his CUSO, which issues cards in agentrelationships with credit unions, would welcome anything that wouldhelp his client credit cards’ stand out more clearly against theircompetition.

Robert Hackney, president of Card Services for Credit Unions,acknowledged that the database could help his member credit unionsmarket their cards, but nonetheless noted that, unlike reviews, thedatabase would only include complaints and would not include anyway for readers to see the context of the complaint.

And Susan Grant, the director of consumer protection for theConsumer Federation of America, lauded the decision and arguedpublic complaints would be a spur to improved issuer behavior.

“Industry has expressed concerns and argued that thisinformation should not be made public, but we don’t believe that itwill be detrimental to reputable companies,” Grant said. “If creditcard issuers improve their practices and the way that they respondwhen customers contact them about problems, customers will behappier with their services and less likely to complain to theCFPB,” she added.