Banks 'eager for complaints to remain private'

13 May 2011

Banks in the US are keen for a complaint hotline to stay private, in order that their reputations cannot be tarnished by frivolous accusations.

The new US consumer agency is already facing pressure from different sides on how best to set up such a service, Bloomberg reports.

As part of the Dodd-Frank overhaul, the Consumer Financial Protection Bureau is required to come with a means by which customers can submit their problems with regards to products and services.

While some groups - such as Consumers Union and Sunlight Foundation - are seeking an open system, others, including the American Bankers Association, want to keep it closed.

Richard Riese, senior vice-president at the association's Center for Regulatory Compliance, said: "The point of banking supervision is to get the system working properly, not to air dirty laundry and scare capital away from banks."

Bloomberg recently reported that a number of US banks have offered billions of dollars to settle a probe of their foreclosure practices by state and federal officials.

By Asim Shah

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