mlsanityData to 14 Oct 2026

From Complaint Narratives to Monetary Relief: A Hybrid Machine Learning Framework for CFPB Consumer Complaints

arXiv 2606.22664 ↗First posted 21 Jun 2026cs.CE cs.LGcited by 1

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Abstract (arXiv)

Consumer financial complaints provide a valuable source of information for identifying service failures, dispute frictions, and operational deficiencies in consumer-facing financial institutions. This paper proposes a hybrid machine learning framework for predicting monetary relief outcomes using Consumer Financial Protection Bureau complaint data. We formulate the task as an imbalanced binary classification problem, where complaints closed with monetary relief are treated as compensable outcomes. The proposed framework integrates multiple sources of predictive information, including complaint narrative text, LDA-based topic representations, interpretable text-engineered features, and structured categorical attributes such as company and state. An XGBoost classifier is trained using a temporal train-test split, with earlier complaints used for model development and more recent complaints reserved for out-of-sample evaluation. Compared with a TF-IDF baseline, the proposed framework substantially improves predictive performance, increasing AUC-ROC from 0.69 to 0.78 and improving PR-AUC under class imbalance. Feature importance analysis shows that textual signals, latent complaint topics, and company identity all contribute meaningful predictive information. In particular, company-level effects reveal systematic variation in complaint resolution patterns across financial institutions. These findings suggest that consumer complaint narratives can serve as alternative data for monitoring consumer harm, identifying firm-level operational weaknesses, and supporting early-stage risk surveillance in consumer finance.

Key facts. Cited by 1 paper in the map (data through 14 Oct 2026). Builds on 6 of its 14 references that are in the map. First posted on arXiv 21 Jun 2026.

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6 of 14 references.

References · 6

  1. 2023The Adoption and Efficacy of Large Language Models: Evidence From Consumer Complaints in the Financial Industrycited by 8
  2. 2018Latent Dirichlet Allocation (LDA) for Topic Modeling of the CFPB Consumer Complaintscited by 7
  3. 2025Performance of diverse evaluation metrics in NLP-based assessment and text generation of consumer complaintscited by 2
  4. 2026A Regulatory Governance Framework for AI-Driven Financial Fraud Detection in U.S. Banking: Integrating OCC, SR 11-7, CFPB, and FinCEN Compliance Requirements for Model Development, Validation, and Monitoring Lifecyclescited by 2
  5. 2024Predictive Analysis of CFPB Consumer Complaints Using Machine Learningcited by 1
  6. 2024Reliability of Topic Modelingcited by 1

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