Citizen Contacting in Response to Crisis: Voicing Grievances to the Consumer Financial Protection Bureau

• Published date: 01 March 2021
• DOI: 10.1177/1532673X20962414
• Date: 01 March 2021
• Subject Matter: Articles

https://doi.org/10.1177/1532673X20962414

American Politics Research

2021, Vol. 49(2) 198 –214

© The Author(s) 2020

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DOI: 10.1177/1532673X20962414

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Article

Citizen interaction with government agencies is ideally a reg-

ular feature of democratic government (Gormley & Balla,

2012; Soss & Keiser, 2006; Zuckerman & West, 1985).

Political participation is more than involvement in episodic

elections. Citizen contacting of government is a means by

which political and potentially insular bureaucratic institutions

learn what people want from their leadership (Bimber, 1999;

Peters, 2010; Verba et al., 1995; Rosenstone & Hansen,

1993; Verba & Nie, 1972). But from where, and from whom,

do contacts with government agencies originate? Experts

agree that insularity from public demands heightens the risk

of undemocratic governance by bureaucracy. Bureaucracy is

not generally thought to be especially responsive to the

elected executives in charge of them, much less to petitions

bubbling up from the grassroots (Kennedy, 2015). Even

when accessible voice mechanisms are established to con-

nect citizens to agencies, contact may originate only from

select populations. If an agency only responds to demands

channeled through a particular medium, but only a few citi-

zens are aware that this voice mechanism exists, service will

be directed only toward those few (Minkoff, 2016; Sharp,

1984). The demand for service may not reflect the need for

service, pointing up the difference between needs, and needs

that are voiced, potentially magnifying inequalities already

present.

Citizen contact with public officials is known to be quite

uneven across the population (Jones et al., 1977; Sharp, 1984;

Thomas, 1982; Peterson, 1988; Zuckerman & West, 1985).

The tendency for awareness to be a greater influence on con-

tacting than need suggests that bureaucratic response may

create greater political inequalities as the affluent and well-

educated have the wherewithal to make demands, while the

poor and less informed do not (Fountain, 2001; Hastings

et al., 2014; Hero, 1986; Matthews & Hastings, 2013; Sharp,

1982, 1984). Over time, as awareness of contact processes

increases, there may be more voicing of grievance as agency

familiarity grows, but also contingent upon changing need.

As the need for assistance increases, the search for avenues

for redress is also likely to intensify, yielding a greater vol-

ume of contacts.

An important compensatory force for those with needs but

less awareness lies in the mechanism of voice by referral of

third parties. These are often consultative agents at the street-

level, implanted in other governmental organizations, in

962414APRXXX10.1177/1532673X20962414American Politics ResearchGimpel

research-article2020

1University of Maryland, College Park, MD, USA

Corresponding Author:

James G. Gimpel, Department of Government, University of Maryland,

3140 Tydings Hall, College Park, MD 20742, USA.

Email: jgimpel@umd.edu

Citizen Contacting in Response to Crisis:

Voicing Grievances to the Consumer

Financial Protection Bureau

James G. Gimpel1

Abstract

The Consumer Financial Protection Bureau (CFPB) came into being in response to the housing and debt crisis that accompanied

the Great Recession. Created as a means for aggrieved consumers to bring problems to the attention of federal regulators

empowered to fine banking and finance companies, the inflow of complaints began late in 2010 and has steadily risen in the

years since. This research examines the variable emergence of complaints across 5 years, asking what types of constituencies

are most likely to register grievances with the CFPB. The filing of complaints is mostly responsive to the presence of

middle and upper income populations with mortgages, though contacts are also high from African American neighborhoods.

Government contacting among lower income populations is facilitated by the presence of counseling and consultative services

at the grassroots. Notably, legal aid services often present in lower and moderate income neighborhoods are associated

with higher complaint frequency for several financial products. Through street-level consultative organizations, the gap in

government service provision separating the affluent, who complain on their own, and less privileged, who do not know

where to express their grievances, can be reduced.

Keywords

Citizen contacting, regulation, Consumer Financial Protection Bureau, Great Recession

Gimpel 199

non-profits, on the staffs of elected officials, or among private

parties that find themselves in a consultative role (Jones,

1981; Scholz et al., 1991; Weissert, 1994). Staffs of state leg-

islators and members of Congress are known to receive many

complaints that they then refer on to other government agen-

cies. Consumer organizations are also known to intercede

between citizens and government and to act as a referral ser-

vice for complaints. Non-profit agencies house expertise in

the operation of government programs, and commonly

depend upon government grants for their livelihood (Lipsky

& Smith, 1989; Soss, 2002). Their understanding of policies

and programs is beneficial to individuals seeking help with

claims for government benefits, and channeling questions and

complaints to the appropriate authorities.

One of the signal policy outcomes emerging from the

Great Recession was the creation of the Consumer Financial

Protection Bureau (CFPB). As part of the Dodd-Frank Wall

Street Reform and Consumer Protection Act, it passed into

law in 2010 following highly partisan votes in both chambers

of Congress. The impetus for the creation of this independent

agency was to protect consumers from abusive and predatory

lending practices, not just by subprime lenders, but by main-

stream financial institutions offering standard loan products.

Momentum behind passage was greatly furthered by the

home mortgage crisis that began in 2007, and continued for

several years as foreclosure rates soared in parts of the coun-

try where housing prices had surged in the preceding years.

As a critical part of its legislative mandate, the CFPB

instituted a consumer complaint procedure as a means of

addressing problems and issues associated with a range of

financial services: mortgages, credit cards, consumer loans,

payday loans, debt collection practices, and credit reporting.

The complaints are recorded in a publicly available database

beginning in 2011. Each complaint record contains details

about its geographic origin (by zip code), and the substantive

concern of the complaint, usually identifying the firm against

whom the grievance was reported, along with information

about whether the complaint was resolved. This CFPB

resource therefore offers an excellent opportunity to advance

the research on citizen involvement with government, espe-

cially engagement with newly created regulatory agencies

about which little is known.

From where are the complaints to the CFPB emerging,

and how do these complaints vary across the nation? Are

they reflective of measures of need, or do they instead reflect

the uneven distribution of socioeconomic status? Although

there is a lack of individual-specific information about indi-

vidual complainants, available information does make it pos-

sible to examine a quite granular geography in order to draw

inferences about who requests government service. This is

among the first social science papers to merge zip code level

contacting data to zip level socioeconomic information to

study the factors associated with complaint flow across the

entire nation (but see: Ayres et al., 2013; Littwin, 2014).

Thorough examination of this information may facilitate

understanding of complaint sources that are other than need

based, as government services have often been found to be

most responsive to the organized, or described as captured by

those of higher socioeconomic status (Nivola, 1978). Here,

the locations of counseling and advice-giving intermediaries

are hypothesized to be an important font of complaints flow-

ing upward. Net of measures of need and information, the

presence of consultative and intercessory organizations such

as legal aid offices, and housing counseling grantees, may be

associated with larger local volumes of financially-related

grievances.

Housing Finance, the Great Recession and the

CFPB

Home ownership requires long-term debt finance for the vast

majority of Americans. Since the 1930s, home purchase in the

United States has been encouraged through a number of

important policies enacted by the federal government, many

of them operating through the mortgage finance system. Of

primary importance, mortgage financing is stimulated by loan

guarantees provided by a number of federal agencies, (e.g.,

USDA, VA, FHA, HUD). Under these arrangements, the risk

of default on a loan is transferred, in large part, or entirely, to

the U.S. government (Sellon, 1990; Weiss & Jones, 2017).

Government sponsored enterprises (GSE’s) such as Fannie

Mae (FNMA), Freddie Mac (FHLMC) and Ginnie Mae

(GNMA) offer additional stimulus by providing guarantees in

the secondary housing market for certain mortgage backed

securities. The present mortgage finance system has unques-

tionably made homeownership a reality for many who could

not otherwise afford it. Given the high cost of housing com-

pared to other consumer purchases, government programs,

taken together, have generated a much higher level of home-

ownership than the market would have provided otherwise.

New mortgage products introduced since banking deregu-

lation in the 1980s have further extended housing investment

to populations that would otherwise not be able to qualify for

mortgages.1 In the period running up to the Great Recession,

lenders and borrowers sought increasing flexibility in mort-

gage finance options, advancing sub-prime loans to those

with weak credit histories, and/or to those with little docu-

mentation (of past employment and income). These noncon-

ventional instruments included adjustable rate mortgages

with low introductory interest rates, zero downpayment

loans, interest only loans, negative amortizing loans, and

some others. Quite crucially, these lending innovations all

carry substantially more risk of default than a conventional

loan with a fixed interest rate, over a fixed term. Mortgagors

start out with low equity and very high debt, and accumulate

equity very slowly over the typical 30-year repayment term

(Ryan et al., 2011). Payments are commonly burdensome

relative to the homeowner’s monthly income (Green, 2008).

By 2006, subprime loans amounted to more than 20% of all

new mortgage originations, substantially exceeding 20% in