Compliance Blog

Written by Eliott C. Ponte, Regulatory Compliance Counsel

The Office of Servicemember Affairs at the Consumer Financial Protection Bureau (CFPB) recently released its third complaint report detailing the data and trends surrounding complaints submitted to the CFPB by servicemembers, veterans, and their families.  As a caveat to this blog post, it is important to note that this report only addresses complaints against those institutions under the CFPB’s direct examination and supervision authority (i.e. $10 billion and above), and does not name any credit union as a recipient of these complaints. However, as we all know too well, the CFPB’s supervisory actions today tend to be a crystal ball into their actions tomorrow….so this report may be helpful for all credit unions to keep in mind.

According to the report, in 2014 the CFPB received numerous complaints from servicemembers and their families regarding account opening, closing and management. For example, these complaints address account maintenance fees, legal processing fees for judgments and levies, changes in account terms and other general operational circumstances. 

To address these complaints, the CFPB suggests that institutions servicing servicemembers do the following:

“Prior to altering military-specific account conditions of use, companies should seek to obtain an updated mailing address from their military consumers."

The CFPB suggests that financial institutions should provide clear instructions on how a person designated by a servicemember may gain access to an account, and what things that person can and cannot do with the account. If different levels of access exist, the report advises this should be clearly explained, along with instructions on how the servicemember account holder can authorize each level. 

The CFPB also suggests that financial instituions should proactively notify military consumers about any Power of Attorney (POA) policies. The report recommends that this should whether or not POAs are accepted, and, if so, which type is required based on the consumer’s needs. If a company requires a specific format or language for a POA, that should be provided on its website. Legal Assistance offices within the military routinely prepare both General and Specific POAs, and can generally include whatever specific language a client needs within the Specific POAs. Companies should provide clear guidance to their military consumers about the language or format they require so that the servicemember can be sure to create a sufficient POA.

The report further advises that financial insitutions should ensure they have feasible methods of communication for all their consumers. For military consumers, limiting communication to telephone or fax to resolve issues greatly impacts the ability of deployed servicemembers to conduct bank business, especially if that communication is only available during US business hours.

The report states the above recommendations are merely suggestions; nevertheless, these suggestions may still serve as helpful guidance for providing services to servicemembers and their families. 

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