Compliance Blog

Written By Michael Coleman, Regulatory Compliance Counsel

Last month in the wake of the CFPB’s new Consumer Complaint Database, we blogged about member complaints and reputation risk, and NCUA’s member complaint process. Today’s post is the last in the series, and we want to talk about a credit union’s Supervisory Committee complaint procedures.

NCUA'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 CCO and also outlines NCUA's process for handling member complaints, which it states are in accordance with section 4.12 of the Supervisory Committee Guide. 

NCUA stresses that a member should try to resolve the issue directly with the credit union before submitting a complaint to NCUA. NCUA also directs members to submit complaints directly to a credit union's Supervisory Committee if the member feels the credit union is unresponsive to their complaint.

When NCUA does receive complaints, NCUA refers the matter to the credit union’s Supervisory Committee for investigation. The Supervisory Committee Guide outlines in detail the investigation procedures which the Supervisory Committee is expected to follow. These procedures start on page 4-10 and include numerous steps the Supervisory Committee should take in the investigation, including these highlights:

“(g) Interview appropriate credit union officials and/or employees.

[…]

 (i) Determine the validity of the complaint.

• Do not rely on the credit union’s manager or employees to do the investigation for the committee.  You should obtain all information firsthand, where possible.  Try to determine what actually happened, rather than obtaining various versions of what happened.

• You should not initiate a joint meeting between the complainant and the credit union officials as a means of resolving disputes or expediting the investigation.  This is often counter-productive and may intimidate the complainant.  You act as a liaison between members and management when disputes arise.

• Remember that no one likes to be investigated.  Credit union officials and employees will often be defensive and complainants may also be antagonistic.  You will need to be very skillful and tactful in obtaining the necessary information without alienating any of the parties involved.

j) Work with the officials to develop plans to correct any improper, unfair, or discriminatory practices, if applicable, or make appropriate recommendations.

k) Have corrective action implemented or obtain agreements from appropriate credit union officials and/or employees they will make corrections within a specified time.” (emphasis added)

From a review of the procedures, it is apparent that the Supervisory Committee is expected to complete a thorough, independent and impartial investigation into member complaints. As you can see from the highlighted sections above, while the credit union officials and employees are not expected to conduct the investigation, they are expected to facilitate the investigation. Working cooperatively with your credit union's Supervisory Committee when they are conducting an investigation into a member complaint provides another opportunity to help manage reputation risk. 

***

NAFCU's Interest Rate Rule Webcast. With the upcoming compliance deadline of September 30, 2012, for NCUA's final rule on the required  interest rate risk policy and program, now is the perfect time to order NAFCU's May 24th, 2012 webcast: A Detailed Look Inside NCUA's New Interest Rate Risk Rule, which is available on-demand here. All of NAFCU's prior webcasts are available for order on-demand, you can find the event list here.