CFPB August Complaint Report Shines Spotlight on Bank Account Dissatisfaction

The Consumer Financial Protection Bureau (CFPB) released their monthly complaint snapshot highlighting consumer complaints about bank accounts and services.  The report shows that consumers complain about problems they experience managing their accounts.

The CFPB has handled approximately 94,200 bank account or service complaints since July 21, 2011.  Complaints under this category cover deposit account products and services.  Some of the findings in the report include:

  • Consumers complain of trouble opening accounts: Consumers frequently complained about consumer and credit reporting data being used in screening for new accounts. Consumers complained that they learned for the first time of negative reporting information when they attempted to open a new deposit account. Additionally, consumers complained about difficulty in addressing potential errors on their reports that may have prevented them from opening an account.
  • Complaints about overdraft fees and availability of funds: Consumers also complained about overdrafts on their accounts occurring because of confusion about the availability of funds they had deposited or were attempting to deposit. Consumers voiced frustration about bank check holding policies that resulted in much-needed funds being unavailable for an extended period of time.
  • Frustration about financial institutions’ error resolution procedures: Consumers frequently complained about the error resolution process for their deposit accounts. Consumers complained that when an unauthorized transaction occurred or they believed they were the victims of fraud, they faced prolonged response times and lack of provisional credit for disputed transactions.
  • Consumers complain about funds availability: Consumers are often frustrated by bank check hold policies and by the length of time it takes for various negotiable instruments to clear and become available.  A number of these complaints involved mobile deposit applications which are not subject to Regulation CC, but are dependent upon contractual arrangements which vary at financial institutions.
  • Consumers have confusion regarding claiming funds in deceased depositor accounts: A number of consumer complaints where submitted related to the probate and non-probate process.  These consumers frequently mention difficulty getting information about and access to their deceased relatives’ accounts.

Compliance Question of the Week

If a member gives their debit card and pin number to another person to do occasional purchases for them and subsequently this person withdrawals cash for themselves, is the member liable for the total amount of the withdrawals or would the credit union have to refund the funds to the member?

The credit union may hold the member liable.  The transaction would not be considered “unauthorized” if the member gave the individual access to the account and did not notify the credit union that transfers by that person were no longer permissible. Therefore, the transaction would not be considered “unauthorized” under 12 CFR 1005.2(m)(1).

Resources

12 CFR 1005.2(m)(1)

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA announced that it will host a High-Impact Community Partnerships webinar on Wednesday, September 21, 2016 at 2pm EST. The webinar will focus on building community partnerships to enable credit unions to offer more products and services. Participants can register here.

Consumer Protection Financial Bureau (CFPB)

The CFPB released its monthly complaints snapshot. The August snapshot focuses on bank account and service complaints, including trouble opening accounts, availability of funds, and error resolution procedures.

CFPB Director Cordray delivered prepared remarks at the Credit Union Advisory Council Meeting. Cordray’s remarks focused heavily on financial education and the new proposed rule on debt collection.

Federal Reserve Board (FRB)

The September issue of FedFocus is now available.

The FRB announced how it will handle non-future-dated returned items during the Phase 1 implementation of Same Day ACH.

The FRB has released a new version of its Account Management Guide. In addition to the guide, the FRB also released a summary of revisions to the Account Management Guide.

Federal Deposit Insurance Corporation (FDIC)

The FDIC released its second quarter Quarterly Banking Profile.

The FDIC released its Summer 2016 issue of Money Smart News which includes tips on cybersecurity for consumers.

Federal Trade Commission (FTC)

The FTC announced that it is seeking comment on its Safeguards Rule, which requires a comprehensive information security program for handling customer information.

The FTC published a final rule, effective October 1, 2016, that increases the fees for entities access the National Do Not Call Registry. .

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of September 1, 2016. The last update prior to this was August 31, 2016.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org

Posted in Compliance News, NCUA.