CFPB Highlights Need for Member Complaint Management Strategy

The Consumer Financial Protection Bureau’s annual complaint report shows an increase in complaints being submitted to the CFPB. The report highlights the need for credit unions to have an effective consumer complaint resolution process in place to handle member complaints before they are submitted to the regulators.

League InfoSight provides a wealth of information when it comes to complaint management.

A key consideration when creating a member complaint resolution process is to define what a complaint is. If the definition is too narrow, the credit union may be missing small issues that could add up to a larger issue. If the definition is too broad, the credit union may be capturing too much information and taking too much time.

Below are some ideas for a successful complaint management program:
  • Centralize the process. Have a responsible party and designated staff to assist.
    • Departments will receive singular communications.
    • Messages to members/community are consistent
    • Documentation and issue resolution will be consistent
  • Develop policies and procedures to ensure proper execution of roles and proper escalation.
    • Documentation of the credit union’s process will be critical and will help ensure staff members have a guide to follow the program.
    • Documentation of how the complaints will be investigated, resolved and issues escalated for potential disciplinary action is important.
  • Monitor complaints and analyze the results. They could be telling you something.
  • Ensure adequate investigation — root cause analysis.
    • Dig deep to find out what is really happening. Leverage relevant employees to provide details, but ensure a separate analysis is also being conducted.
    • Consider if there is a potential violation of Federal Law, consumer harm and/or a potential UDAAP issue.
    • Respond to the consumer in the same way that they communicated with you (e.g., phone call, letter, etc.).
    • Restate in your response to the consumer, what you believe to be the issue.
  • Collect and store documentation/evidence.
  • Resolution should also be documented, which may lead to further escalation and potential disciplinary action (depending on the credit union’s personnel policies).
  • Audit the process to make sure policies and procedures are being followed.

Credit unions should look at the benefits of having an effective consumer complaint process. An effective consumer complaint process can help identify opportunities for improvement and can also be a warning that, if identified and rectified quickly, can alleviate a large issue, that can impact reputation risk! An effective complain process enables credit unions to:

  • Find areas for improvement and make your credit union even better;
  • Catch a problem or practice before it becomes systematic;
  • Turn a bad experience into a positive experience, creating deeper member loyalty;
  • Make members feel heard and ensure they have a better understanding of the credit union’s process;
  • Support employees through the escalation process so they know what to do when they learn of an issue, providing consistency; and
  • Become a more responsive organization that can fix issues before larger problems occur.

CU PolicyPro contains the following policies which can be used to help a credit union craft its own policy on this topic:

  • Model Policy 1540: Complaint Policy for Federally Chartered Credit Unions
  • Model Policy 1541: Complaint Policy for State Chartered Credit Unions
Question of the Week
Q. We have an individual with a power of attorney (POA) requesting to access a living trust account. Does a POA provide authority to access a trust account?

A. A power of attorney, on its own, is not sufficient to grant authority on a trust account. However, if both the POA document and the trust document allow for the use of a POA, then it can be used to access the trust. However, the language must be present in both documents. Trust powers expressed in a POA document only are not enough to allow the attorney-in-fact to act on the trust account.

Compliance Alerts

National Credit Union Administration

Agencies Issue Statement and RFI on BSA/AML Compliance: The NCUA issued a joint statement addressing how risk management principles described in the “Supervisory Guidance on Model Risk Management” relate to systems or models used by financial institutions. The issued an joint request for information (RFI) to gather information on the extent to which the principles discussed in the guidance support compliance by credit unions with BSA/AML and OFAC requirements.

Consumer financial Protection Bureau

CFPB Proposes Delay of Effective Date for Recent Debt Collection Rules: The CFPB issued a notice of proposed rulemaking which would change the effective date for both of the debt collection rule amendments, issued in late 2020. Currently the rules are scheduled to take effect on Nov. 30 but the proposal would change that date until Jan. 29, 2022.

Office of Foreign Assets Control

OFAC has updated the SDN list as of April 8. The last update prior to this was March 31.

Questions? Contact the Compliance Hotline: 1.800.546.4465,

Posted in Compliance News, Compliance News.