NCUA Letters to Credit Unions

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Letter to Credit Unions No.: 15-CU-04
Improving the Process for Consumer Complaints
June 2015

NCUA’s LTCU 15-CU-04 supersedes its 2011 guidance (LTCU 11-CU-17) regarding NCUA’s Office of Consumer Protection (OCP) and its consumer complaint handling process. One important change made by the new guidance is to increase the time credit unions have to resolve most consumer complaints from 21 days (October 2001 guidance) to 60 days.

NCUA established a Consumer Assistance Center responsible for addressing consumer complaints involving FCUs with total assets up to $10 billion, and in certain instances, FISCUs. For FISCUs, NCUA retains oversight for the following consumer protection regulations:

  • Bank Secrecy Act
  • Home Mortgage Disclosure Act (HMDA) Regulation C
  • Expedited Funds Availability Act Regulation CC
  • Flood Disaster Protection Act
  • Truth in Savings Act
  • Depository Institution Management Interlocks Act
  • Gramm-Leach-Bliley Act
  • Homeowners Protection Act

Complaints involving matters that do not fall within NCUA’s purview are forwarded to either the appropriate state supervisory authority or federal regulator for disposition.

NCUA will implement changes to its handling of consumer complaints gradually to allow credit unions to become familiar with the Consumer Assistance Center’s new procedures.

Changes to NCUA Procedures

Phase 1: Credit Union Resolution of Consumer Complaint

When the NCUA receives a complaint from a credit union member, the Consumer Assistance Center will assign the complaint a unique case number and then forward the complaint and any documents provided by the consumer to the credit union. The credit union will then have 60 days to review and resolve (if appropriate) the complaint. NCUA’s guidance recommends that credit unions take the following steps during the 60-day resolution period:

  • Review the complaint
  • Communicate directly with the consumer as needed and appropriate
  • Respond in writing to the consumer, with a copy to the Consumer Assistance Center, referencing the case number and indicating whether the credit union has been able to resolve the matter

NCUA further recommends the following as a process for credit unions; review of a complaint:

  • Establish channels to receive consumer complaints and inquiries
  • Establish written policies and procedures to record, categorize, analyze, investigate, resolve and respond to complaints in an appropriate and timely manner
  • Determine the appropriate type of investigation of the complaint including, as appropriate:
  • An interview of the consumer and credit union staff
  • A review of the consumer’s credit union file
  • A review of pertinent written and unwritten credit union policies and procedures
  • An analysis of the relevant federal consumer protection laws/regulations
  • Develop and implement plans to address and correct any illegal or improper practices
  • Respond in writing to the consumer after completing the investigation of the complaint
  • Maintain a record of the credit union’s written response and any further communications with the consumer about the matter
  • Retain, organize and analyze complaint data to identify and address any trends, areas of risk and program weaknesses

If the Consumer Assistance Center is notified within the 60-day time period that the matter has been resolved, it will close the case.

Phase 2: Consumer Assistance Center Investigation

NCUA retains the authority to conduct its own investigation of a consumer complaint. NCUA may begin a formal investigation of the matter, if:

  • The Consumer Assistance Center does not receive any written response from the credit union within the 60-day time frame
  • The credit union notifies the Consumer Assistance Center in writing that it has been unable to resolve the matter with the consumer
  • The consumer disputes the resolution of the complaint by contacting the Consumer Assistance Center in writing within 30 days of the date of the credit union's response letter

NCUA’s own investigation of a consumer complaint would begin with a letter to the credit union that would include consumer’s original complaint and any documents provided by the consumer in support of the complaint. The letter would indicate that the Consumer Assistance Center is investigating the complaint and requests a written response to the Consumer Assistance Center about the matter within 30 calendar days from the date of the letter. NASCUS note: This would occur after the initial 60-day timeframe within which the credit union was given an opportunity to resolve the complaint.

NCUA would also send a letter to the consumer indicating the agency has begun an investigation of the complaint. 

An NCUA investigation will ultimately result in one of the 5 following outcomes:

  1. If NCUA determines the complaint does not involve a federal financial consumer protection law or federal consumer compliance regulation for which NCUA has enforcement authority it will close the case
  2. If the complaint is the subject of a pending lawsuit, NCUA will close its investigation
  3. If the credit union has resolved the complaint with the consumer, NCUA will close its case
  4. NCUA determines the credit union’s actions did not violate or were not inconsistent with a federal financial consumer protection law or federal consumer compliance regulation
  5. If NCUA determines the credit union’s actions “either violated or were inconsistent with a federal financial consumer protection law or federal consumer compliance regulation” for which NCUA has enforcement authority, NCUA will address supervisory concerns directly with the credit union

Both the credit union and the consumer have a right of appeal to NCUA of any determination made by NCUA’s Consumer Assistance Center. Both the credit union and consumer also have the right to file a complaint regarding the process directly to the NCUA Ombudsman.

Effective Consumer Compliance Management
NCUA’s guidance characterizes consumer compliance management as a sound business practice and identifies the following as features of an effective policy:

  • Credit union management and staff trained in the credit union’s compliance responsibilities
  • Operating policies that incorporate compliance requirements into a credit union’s business processes
  • Oversight
  • Written policies and procedures
  • Thorough documentation

-End-
B/K

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