Compliance Blog

Written by Michael Coleman, Regulatory Compliance Counsel

Last week we blogged about the CFPB's new Consumer Complaint Database, and we also blogged about the reputation risk associated with member complaints. Given the nature of viral media, managing reputation risk is of primary concern to credit unions, and the proper management of member complaints is one way to reduce reputation risk.  

Today we want to talk about NCUA's procedures for handling member complaints. NCUA's Office of Consumer Protection (OCP) is NCUA's newest office, and OCP's Division of Consumer Compliance and Outreach (CCO) is responsible for the management of member complaints received by NCUA. NCUA Letter to Credit Unions 11-CU-17 details the responsibilities of OCP and CCO and also outlines NCUA's process for handling member complaints. NCUA stresses that a member should try to resolve the issue directly with the credit union before submitting a complaint to NCUA.

However, when a member is unsuccessful in resolving the issue with the credit union, Letter to Credit Unions 11-CU-17 provides the following procedures for how NCUA's CCO will handle the member complaint:  

• The member may submit a written complaint (on-line, by e-mail, by fax or by regular mail) along with any supporting documentation to CCO;

• CCO sends a letter to the chairman of the federal credit union’s supervisory committee, including the member’s original complaint, requesting a response usually within 21 days from the date of the letter;

• CCO sends an acknowledgement letter to the member including the date the supervisory committee is to respond to NCUA;

• Once the supervisory committee’s response is received, CCO reviews the response to ensure it adequately addresses the member’s complaint and that the action(s) taken, if any, are consistent with consumer protection laws and regulations;

• If the federal credit union did not address all of the member's concerns or there are remaining questions involving regulatory or consumer compliance issues, CCO will request additional information and/or clarification from the supervisory committee and notify the member that the complaint investigation is still ongoing;

• Once all issues associated with the complaint have been adequately addressed by the supervisory committee and analyzed by CCO, NCUA notifies the federal credit union and the member of one of the five following actions:
  • The federal credit union has resolved the issue to the member’s satisfaction and the case is being closed;
  • The federal credit union did not violate either a consumer protection law or consumer compliance regulation and the case is being closed;
  • One of the two parties initiated litigation; therefore, the courts will decide the outcome and the case is being closed;
  • Upon further investigation the issue does not involve either a consumer protection law or consumer compliance regulation; therefore, it does not fall under NCUA’s purview (Examples of this are complaints involving state contract law, state foreclosure procedures, etc.); or
  • A violation of either a consumer protection law or consumer compliance regulation has occurred. CCO cites the specific violation or the law or regulation and required corrective action(s) to be taken by the federal credit union.

Letter to Credit Unions 11-CU-17 also references in a footnote that the CCO handles member complaints in accordance with section 4.12 of the Supervisory Committee Guide. We will talk about these procedures in a future blog post. 

Reports from NCUA's OCP.  NCUA's Newsletter, the NCUA Report, sometimes features a section from the OCP. The March 2012 edition of the NCUA Report contained this report from the OCP, it is worth taking a look at. The good news from the report is that although NCUA is receiving and processing member complaints, federal credit unions are largely in compliance with federal regulations, and that where necessary federal credit unions have taken swift corrective action. The December 2011 report also contained a report from OCP, it is also worth a read.