Compliance Blog

Written by Bernadette Clair, Regulatory Compliance Counsel

NCUA September Board Meeting. NCUA’s September Board meeting includes the following agenda items:

1. Final Rule, Section 701.36 of NCUA’s Rules and Regulations, Federal Credit Union Ownership of Fixed Assets.
2. Request from Peoples Advantage Federal Credit Union to Expand its Community Charter.
3. Proposed Rule, Parts 703 and 721 of NCUA’s Rules and Regulations, Authorizing Charitable Donation Accounts.

The meeting takes place tomorrow, September 12th, at 10 a.m.

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The Federal Credit Union. For the September/October issue of The Federal Credit Union, I wrote the Compliance Central article on Managing Member Complaints: An Effective Tool for Managing Reputation Risk. Putting a process in place to manage member complaints can be an effective tool for establishing and maintaining your credit  union’s reputation as an institution that complies with consumer protection laws and is responsive to its members’ needs. Here’s a snippet from my article on how credit unions can use complaint management to their benefit:

 â€œBenefits of Comprehensive Complaint Management

Expanding complaint management beyond the bare minimum can be an effective risk management tool. Deter­mining the channels through which the credit union receives complaints, the types of complaints received, and the products or services involved can be invaluable in determining whether there are weaknesses in a credit union’s con­sumer compliance program and provides insight into how the membership may perceive certain products and services. Benefits of a comprehensive program include member service that is respon­sive to the membership’s concerns, and the  opportunity to fine-tune the credit union’s compliance program and correct potential issues before an examination.”

Establishing a comprehensive member complaint process sooner rather than later could also save your credit union some headaches down the road. Regulators’ expectations for handling consumer complaints have been steadily increasing, and that trend shows no signs of slowing down. For example, the CFPB noted in its Summer 2013 Supervisory Highlights Report that an effective compliance management system (CMS) includes a consumer complaint management response program.

The report describes key elements of a consumer complaint management program:

“CONSUMER COMPLAINT MANAGEMENT PROGRAM

Financial service providers should be responsive to complaints and inquiries received from consumers. In addition, entities should monitor and analyze complaints to understand and correct weaknesses in their programs that could lead to consumer risks and violations of law.

Key elements of a consumer complaint management program include:

• The establishment of channels through which the entity can receive consumer complaints and inquiries. Such channels may include telephone numbers or email addresses dedicated to receiving consumer complaints or  inquiries.

• The proper and timely resolution of all complaints;

• The recordation, categorization, and analysis of complaints and inquiries; and

• Reviews for possible violations of Federal consumer financial laws.

Entities should organize, retain, and analyze complaint data to identify trends, isolate areas of risk, and identify program weaknesses in their lines of business and overall CMS.”

Member complaint management is a topic we’ve blogged about many times, so be sure to check out some of our other blog posts on the topic.