The Magic of Fintech? Insights for a Regulatory Agenda from Analyzing Student Loan Complaints Filed with the CFPB

This Article looks at consumer complaints about student loan lenders and servicers from the Consumer Financial Protection Bureau’s (CFPB’s) consumer complaint database. Using a novel dataset drawn from 30,678 complaints filed against 212 student loan companies, we analyze consumers’ subjective views about whether traditional or fintech student loan lenders and servicers provide a better customer experience. Overall, we find that consumers initiate far fewer complaints against fintech lenders than traditional lenders. But we find that fintech lenders are 28 times more likely than traditional lenders to receive complaints for making confusing or misleading advertisements.

Our data also show that complaints against fintech lenders or servicers have not risen in parallel with greater loan volume by those firms. By comparison, traditional lenders and servicers have received rising numbers of complaints. We consider various reasons for this difference, including whether this means fintech student loan companies are providing a better consumer experience.