Does Opening Complaints Data Change Company and Consumer Behavior? Evidence from the Consumer Financial Protection Bureau

I analyze a technological change which improved the public monitoring of financial customer treatment. This major assessment of the Consumer Financial Protection Bureau is based on its exposing credit card-related complaints online while keeping mortgage-related complaints concealed. Exposed companies were more likely to close complaint files while providing explanations and relief to aggrieved consumers and in a timely manner. The transparency policy seems uncompromised by economic inequality. Consumers procrastinate in reporting exposed banks while rewarding exposed banks for their improved behavior with new accounts. Debt remained generally stable. Surprisingly, both consumers and banks benefit when offending banks are exposed online. The Online Appendix is available here: http://ssrn.com/abstract=2931200