The NCUA does an effective job of investigating consumer complaints, but often does not determine whether the complaint was a violation that should be sent to agency officials conducting examinations of credit unions, the agency Inspector General said, in a just-released report.
“Based on our review of complaints, we determined that the agency’s consumer complaint process focuses mostly on assisting consumers with resolving consumer complaints with their credit union as opposed to determining whether the credit union has violated a law or regulation,” the IG said.
The report is particularly timely, as the NCUA board debates whether the agency should focus more attention on consumer protection issues. New board Chairman Todd Harper has said that the NCUA is the only banking regulator that does not conduct separate consumer protection tests and that he wants a more concentrated focus on the issue.
When he was chairman, board member Rodney Hood resisted Harper’s efforts to increase consumer protection staff and to develop such an exam.
The IG said that because the agency’s Consumer Assistance Center focuses on complaint resolution, “We have concerns regarding the consumer complaint data and information available to examiners for subsequent review.”
Simply because the complaint center resolves a problem without a violation determination, the credit union could continue to violate consumer protection laws and rules. The IG said that the NCUA instructs examiners not to reinvestigate complaints, therefore, many violations could go unidentified and unreported.
In some cases, the consumer center also communicated contradictory messages to consumers and credit unions. That occurred because the NCUA considers the results of complaint investigations as supervisory actions, which might not be provided to consumers.
In the report, the Inspector General said the agency has said it plans to require examiners to review consumer complaint data more frequently during quarterly reviews.
“Based on our review of complaints, we determined that the agency’s consumer complaint process focuses mostly on assisting consumers with resolving consumer complaints with their credit union as opposed to determining whether the credit union has violated a law or regulation,” the IG said.
The report is particularly timely, as the NCUA board debates whether the agency should focus more attention on consumer protection issues. New board Chairman Todd Harper has said that the NCUA is the only banking regulator that does not conduct separate consumer protection tests and that he wants a more concentrated focus on the issue.
When he was chairman, board member Rodney Hood resisted Harper’s efforts to increase consumer protection staff and to develop such an exam.
The IG said that because the agency’s Consumer Assistance Center focuses on complaint resolution, “We have concerns regarding the consumer complaint data and information available to examiners for subsequent review.”
Simply because the complaint center resolves a problem without a violation determination, the credit union could continue to violate consumer protection laws and rules. The IG said that the NCUA instructs examiners not to reinvestigate complaints, therefore, many violations could go unidentified and unreported.
In some cases, the consumer center also communicated contradictory messages to consumers and credit unions. That occurred because the NCUA considers the results of complaint investigations as supervisory actions, which might not be provided to consumers.
In the report, the Inspector General said the agency has said it plans to require examiners to review consumer complaint data more frequently during quarterly reviews.
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