Consumer Complaints
By David Dickinson
Bankers often deal with "crazy" customers. Like the one that's mad because a loan officer will not make them a loan for an attorney so they can declare bankruptcy (sad, but it's a true story - I had this applicant back in my lending days). Now consumers have a new way to make your life hard.
When you deny an applicant, you provide an Adverse Action Notice that contains your regulator's name and address. Applicants can be upset when they are denied credit, but most don't take the time and effort to write a letter to your regulator to complain. But what if a disgruntled applicant could simply pick up the phone and call a toll free number to complain about your lending decisions? Well, some of you are about to find out. Recently, the Federal Reserve Board added a requirement to include their phone number on Adverse Action Notices. (This only applies to FRB regulated banks. You can read more about this in our November 2007 e-newsletter. I expect a huge increase in frivolous complaints against banks and bankers if it's easy for "crazy" people to complain.
Customers (or even those that aren't your customers) can submit a complaint or inquiry electronically. The FRB has established a website to provide answers to banking questions and links to consumer protection resources. Consumers will also find a brochure entitled "How to File a Consumer Complaint Against a Bank" on this website.
If you aren't regulated by the FRB, you may be smiling, but wait. Any consumer may contact the FRB's hotline or website. They do not have to know which federal bank regulator supervises the bank that they are concerned about in order to file a complaint or inquiry. The FRB's Consumer Help will direct consumers to the appropriate regulator and has made arrangements with several other banking regulators to transfer callers directly to another representative at the appropriate agency (according to the FRB press release).
When I first read about the FRB's change, I wondered how long it would be before the other regulatory agencies followed suit. Well, my question has been answered. The House Financial Services' Financial Institutions Subcommittee held a hearing on December 12, 2007, and discussed establishing a toll free number to enable consumers who have a problem with a bank to talk to the appropriate federal regulator.
You can read more about "The Financial Consumer Hotline Act of 2007: Providing Consumers with Easy Access to the Appropriate Banking Regulator" if you'd like.
The OCC recently announced they support this issue. In a News Release (2007-133) on 12/12/07, the OCC stated ". . . the OCC strongly supports efforts to make it easier for bank customers to register questions and concerns with the right financial regulator."