Financial Institution Regulatory Agencies Can Make Better Use of Consumer Complaint Information

GGD-83-31 Published: Aug 25, 1983. Publicly Released: Sep 29, 1983.

Highlights

The Federal Deposit Insurance Corporation (FDIC), the Federal Home Loan Bank System (FHLBS), the Federal Reserve System (FRS), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC) accept, investigate, and resolve consumers' complaints against the banks and saving institutions they regulate. In response to a congressional request, GAO reviewed these agencies' handling of consumer complaints against banks and other regulated financial institutions, including how complaint information is used for supervisory and policymaking purposes.

Recommendations

Recommendations for Executive Action

Agency Affected	Recommendation	Status
Office of the Comptroller of the Currency	The Chairmen of FDIC and FRS and the Comptroller of the Currency should devise and implement consistent industrywide complaint classification and reporting procedures to make consumer complaint information more accessible and usable for policy analyses.	Closed – Implemented The complaint codes at OCC have been changed to encompass the categories used by FDIC and FRS, as well as the more specific codes always used by OCC. The coding system is not exactly comparable because of the large numbers of complaints received. OCC believes a more specific coding scheme is needed than the ones used by FDIC and FRS.
Federal Deposit Insurance Corporation	The Chairmen of FDIC and FRS and the Comptroller of the Currency should devise and implement consistent industrywide complaint classification and reporting procedures to make consumer complaint information more accessible and usable for policy analyses.	Closed – Implemented Please call 202/512-6100 for information.
Federal Reserve System	The Chairmen of FDIC and FRS and the Comptroller of the Currency should devise and implement consistent industrywide complaint classification and reporting procedures to make consumer complaint information more accessible and usable for policy analyses.	Closed – Implemented Please call 202/512-6100 for information.
Federal Home Loan Bank Board	The Chairmen of FHLBS and NCUA should consider adopting similar classification codes to facilitate broader comparisons through the entire regulated financial industry and add an additional code to their complaint data systems to assist in identifying and evaluating potentially unfair or deceptive practices that require further study.	Closed – Not Implemented FHLBS receives so few complaints, it is felt, that a change in the current system is not warranted.
National Credit Union Administration	The Chairmen of FHLBS and NCUA should consider adopting similar classification codes to facilitate broader comparisons through the entire regulated financial industry and add an additional code to their complaint data systems to assist in identifying and evaluating potentially unfair or deceptive practices that require further study.	Closed – Not Implemented NCUA receives so few complaints, it is felt, that a change in the current system is not warranted.
Office of the Comptroller of the Currency	The Chairmen of FDIC, FHLBS, FRS, and NCUA and the Comptroller of the Currency should require local complaint handlers to document reasons for selecting the types of discrimination investigations they perform and require that unverified information supplied by institutions during investigations be verified during subsequent compliance examinations.	Closed – Not Implemented OCC believes that changes to its current procedures are not warranted.
Federal Deposit Insurance Corporation	The Chairmen of FDIC, FHLBS, FRS, and NCUA and the Comptroller of the Currency should require local complaint handlers to document reasons for selecting the types of discrimination investigations they perform and require that unverified information supplied by institutions during investigations be verified during subsequent compliance examinations.	Closed – Not Implemented FDIC believes that changes to its current procedures are not warranted.
Federal Home Loan Bank Board	The Chairmen of FDIC, FHLBS, FRS, and NCUA and the Comptroller of the Currency should require local complaint handlers to document reasons for selecting the types of discrimination investigations they perform and require that unverified information supplied by institutions during investigations be verified during subsequent compliance examinations.	Closed – Not Implemented FHLBS believes that changes to its current procedures are not warranted.
Federal Reserve System	The Chairmen of FDIC, FHLBS, FRS, and NCUA and the Comptroller of the Currency should require local complaint handlers to document reasons for selecting the types of discrimination investigations they perform and require that unverified information supplied by institutions during investigations be verified during subsequent compliance examinations.	Closed – Not Implemented FRS believes that changes to its current procedures are not warranted.
National Credit Union Administration	The Chairmen of FDIC, FHLBS, FRS, and NCUA and the Comptroller of the Currency should require local complaint handlers to document reasons for selecting the types of discrimination investigations they perform and require that unverified information supplied by institutions during investigations be verified during subsequent compliance examinations.	Closed – Not Implemented NCUA believes that changes to its current procedures are not warranted.
Federal Home Loan Bank Board	The Chairman, FHLBS, should require agency staff to identify and refer fair housing complaints to the Department of Housing and Urban Development, as specified in their 1980 memorandum of understanding.	Closed – Implemented Please call 202/512-6100 for information.
Office of the Comptroller of the Currency	The Chairmen of FDIC, FHLBS, FRS, and NCUA and the Comptroller of the Currency should revise their complaint handling and examination procedures to include specific requirements for coordinating complaints, examinations, and supervisory efforts. In particular, they should require followup during subsequent examinations to ensure that measures were taken to correct identified violations and to ensure that violations are not affecting similarly situated customers and require at least minimal documentation of all work performed.	Closed – Implemented GAO has no information on the actions taken in response to this recommendation.
Federal Deposit Insurance Corporation	The Chairmen of FDIC, FHLBS, FRS, and NCUA and the Comptroller of the Currency should revise their complaint handling and examination procedures to include specific requirements for coordinating complaints, examinations, and supervisory efforts. In particular, they should require followup during subsequent examinations to ensure that measures were taken to correct identified violations and to ensure that violations are not affecting similarly situated customers and require at least minimal documentation of all work performed.	Closed – Implemented Due to budget limitations, FDIC has increased its reliance on complaints as a source of information about problems with consumer compliance.
Federal Home Loan Bank Board	The Chairmen of FDIC, FHLBS, FRS, and NCUA and the Comptroller of the Currency should revise their complaint handling and examination procedures to include specific requirements for coordinating complaints, examinations, and supervisory efforts. In particular, they should require followup during subsequent examinations to ensure that measures were taken to correct identified violations and to ensure that violations are not affecting similarly situated customers and require at least minimal documentation of all work performed.	Closed – Implemented Please call 202/512-6100 for information.
Federal Reserve System	The Chairmen of FDIC, FHLBS, FRS, and NCUA and the Comptroller of the Currency should revise their complaint handling and examination procedures to include specific requirements for coordinating complaints, examinations, and supervisory efforts. In particular, they should require followup during subsequent examinations to ensure that measures were taken to correct identified violations and to ensure that violations are not affecting similarly situated customers and require at least minimal documentation of all work performed.	Closed – Not Implemented FRS does not believe any changes to its current procedures are needed; it feels the current level of coordination is sufficient.
National Credit Union Administration	The Chairmen of FDIC, FHLBS, FRS, and NCUA and the Comptroller of the Currency should revise their complaint handling and examination procedures to include specific requirements for coordinating complaints, examinations, and supervisory efforts. In particular, they should require followup during subsequent examinations to ensure that measures were taken to correct identified violations and to ensure that violations are not affecting similarly situated customers and require at least minimal documentation of all work performed.	Closed – Not Implemented NCUA has totally decentralized complaint handling responsibilities to its regions. Headquarters retains no responsibilities in this area.
Federal Home Loan Bank Board	The Chairman, FHLBS, should take steps to ensure that the followup code currently in the FHLBS data system is consistently applied.	Closed – Implemented Please call 202/512-6100 for information.
Office of the Comptroller of the Currency	The Chairmen of FDIC, FRS, and NCUA and the Comptroller of the Currency should alter their computerized complaint data systems to identify which complaints require followup or which provide information that may be useful in the examination or supervision process.	Closed – Implemented OCC will reemphasize coordination to complaint handlers but does not plan to alter its computerized data system.
Federal Deposit Insurance Corporation	The Chairmen of FDIC, FRS, and NCUA and the Comptroller of the Currency should alter their computerized complaint data systems to identify which complaints require followup or which provide information that may be useful in the examination or supervision process.	Closed – Implemented FDIC will reemphasize coordination to complaint handlers but does not plan to alter its computerized data system.
Federal Reserve System	The Chairmen of FDIC, FRS, and NCUA and the Comptroller of the Currency should alter their computerized complaint data systems to identify which complaints require followup or which provide information that may be useful in the examination or supervision process.	Closed – Implemented FRS will reemphasize coordination to complaint handlers but does not plan to alter its computerized data system.
National Credit Union Administration	The Chairmen of FDIC, FRS, and NCUA and the Comptroller of the Currency should alter their computerized complaint data systems to identify which complaints require followup or which provide information that may be useful in the examination or supervision process.	Closed – Implemented NCUA will reemphasize coordination to complaint handlers but does not plan to alter its computerized data system.

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