Grievances and Grumblings

Effectively managing consumer complaints as a compliance requirement

Customer complaints—and customer compliments—have always been valuable sources of feedback that allow businesses to improve their products and service. With the Consumer Financial Protection Bureau’s placing a particular emphasis on ensuring that financial service providers respond swiftly and fairly to customer complaints, however, compliant management has now become an important component of every bank’s compliance program.

Today all of the federal banking agencies are monitoring complaints from bank consumers. The Federal Financial Institution Examinations Council’s interagency consumer compliance examination procedures now also require reviews of banks’ consumer complaint management processes and their complaint records. Similarly, each state banking agency has its own independent process to handle consumer complaints.

Meanwhile, the Electronic Fund Transfers Act (Regulation E) and the Truth in Lending Act (Regulation Z) establish procedures for electronic fund transfer, debit card and credit card error resolutions. The Community Reinvestment Act requires pertinent documents to be placed in a bank’s CRA Public File, and those documents may be accessed by anyone requesting the information. The Real Estate Settlement and Procedures Act also has requirements for handling mortgage servicing complaints. Guidelines for other types of complaints received by banks are subject to the FFIEC’s compliance examination guidelines. New regulatory emphasis on violations of the Unfair, Deceptive or Abusive Acts or Practices Act, or UDAAP, highlights the importance of banks resolving consumer complaints.

Today, however, the CFPB has superseding authority to oversee consumer complaints. The Bureau’s examination manual asks its examiners to evaluate review financial institutions for whether …

Weaknesses in a compliance management system exist, based on the nature or number of substantive complaints from consumers.


The potential for highly visible complaints require your community bank to have a management process that will ensure the timeliness, accuracy and consistency in addressing any concerns raised by customers and the public. The following eight best practices will help your community bank develop a timely, consistent complaint resolution and response, and increase the likelihood that the cause of a problem prompting the complaint is identified and corrected.

Remember that for every person who complains, there can be hundreds who do not but who instead are spreading damaging negative comments to others. Receiving complaints is an opportunity to identify flaws that can be rectified to prevent future problems.

Mary Thorson has over 29 years of experience in bank and non-bank regulatory compliance, training, and financial institution program reviews and examinations, Ms. Thorson has developed a broad and deep portfolio of technical expertise that spans consumer protection, lending, deposits, operations, privacy, third-party management, collections, and anti-money laundering/anti-terrorist financing laws and regulations.

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