a

GAO

United States Government Accountability Office

Report to the Subcommittee on Oversight 

and Investigations, Committee on 

Financial Services, House of 

Representatives

February 2006 OCC CONSUMER 

ASSISTANCE

Process Is Similar to 

That of Other 

Regulators but Could 

Be Improved by 

Enhanced Outreach

GAO-06-293
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

 February 2006

OCC CONSUMER ASSISTANCE

Process Is Similar to That of Other 

Regulators but Could Be Improved by 

Enhanced Outreach 

Highlights of GAO-06-293, a report to the 

Subcommittee on Oversight and 

Investigations, Committee on Financial 

Services, House of Representatives 

Overall, OCC’s process for handling consumer complaints—carried out 

primarily by its Customer Assistance Group (CAG)—is similar to that of the 

other three federal bank regulators. However, unlike two of them, OCC 

lacks a mechanism to gather feedback from consumers it assists that could 

help it and the banks improve service to consumers. All of the regulators 

resolve the majority of complaints by providing or clarifying information for 

bank customers; less frequently, the regulators investigate and determine

that a bank or customer erred. OCC annually handles more complaints than 

the other regulators, likely reflecting its position as the supervisor of banks 

with the majority of the nation’s bank assets. OCC’s complaint volume has 

not increased appreciably since it issued the preemption rules. OCC, in 

accordance with federal requirements for agencies to measure how they are

fulfilling goals related to serving the public, measures the percentage of 

complaints it resolves within 60 days, a target other federal bank regulators 

also use. In reporting its performance, however, OCC includes data on its 

response to consumers’ inquiries, which typically take less time, thereby 

overstating its performance on timeliness of responses to complaints. 

OCC’s bank examiners use consumer complaint information collected by 

CAG to plan or adjust examinations. CAG staff and examiners communicate 

regularly regarding specific complaints or complaint volume and coordinate 

these efforts to provide consistent messages when discussing consumerrelated issues with bank officials. In addition, complaint data inform OCC 

policy guidance to banks, often addressing potential compliance and safety 

and soundness risks banks face. CAG also provides feedback to banks, 

focusing on complaint trends and potential risks that may impact the banks’ 

compliance with consumer protection laws or other issues. 

Many of the state officials and consumer advocates GAO contacted during 

visits to four states, as well as some representatives of national 

organizations, nevertheless remain concerned about OCC’s commitment and 

capacity to address consumer complaints—especially given their perception 

that the rules effectively ended protections provided by state laws and 

processes. Specific concerns these officials cited include an inability to 

obtain information on complaint outcomes, the fact that OCC handles 

complaints from a single location, and the adequacy of CAG’s resources. 

OCC has taken actions addressing some of these concerns. The agency 

views itself as a neutral arbiter and continues to provide an avenue for 

consumers to file complaints related to national banks. OCC recently hired 

additional CAG staff and has begun working with a third-party vendor to 

expand telephone service from 7 to 12 hours a day. GAO noted that some 

officials and advocates contacted were unaware of OCC’s process for 

handling consumer complaints and the assistance it can provide.

In January 2004, the Office of the 

Comptroller of the Currency

(OCC)—the federal regulator of

national banks—issued rules 

concerning the extent to which 

federal law preempts state and 

local banking laws. Some state 

officials and consumer groups 

expressed concerns about a 

perceived loss of consumer 

protection. GAO identified (1) how

OCC’s complaint process compares

with that of other federal bank

regulators, (2) how complaint 

information informs OCC’s 

supervision of national banks, and 

(3) issues that consumer advocates 

and state officials have raised 

about OCC’s consumer protection

efforts and OCC’s responses to the 

issues. 

 

 What GAO Recommends

GAO recommends that OCC (1)

measure the satisfaction of

consumers it assists; (2) revise the 

way it measures and reports on its 

timeliness in resolving consumer

complaints; and (3) better inform 

the public, state officials, and 

others of its role in handling

consumer questions and 

complaints. 

OCC agreed with our conclusions 

and recommendations. 

www.gao.gov/cgi-bin/getrpt?GAO-06-293.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact David G. Wood 

at (202) 512-6878 or woodd@gao.gov. 
Page i GAO-06-293 OCC Preemption - Consumer Issues

Contents

Letter 1

Results in Brief 3

Background 6

OCC’s Handling of Consumer Complaints Is Similar to That of Other 

Regulators 9

CAG’s Consumer Complaint Data Inform OCC’s Bank Supervisory 

Activities 21

Despite OCC Efforts, State Officials and Consumer Advocates Still 

Have Concerns About OCC’s Commitment and Capacity to 

Address Consumer Complaints 23

Conclusions 31

Recommendations 33

Agency Comments and Our Evaluation 33

Appendixes

Appendix I: Scope and Methodology 35

Appendix II: Comments from the Office of the Comptroller of the 

Currency 38

Appendix III: GAO Contact and Staff Acknowledgments 41

Figures Figure 1: Consumer Complaint Processes of Selected Banking 

Regulators 11

Figure 2: Complaint Resolutions of Selected Federal Regulators 15

Figure 3: Number of Complaints Per Billion Dollars in Assets under 

Supervision of Selected Federal Regulators 19
Contents

Page ii GAO-06-293 OCC Preemption - Consumer Issues

Abbreviations

CAESAR Complaint Analysis Evaluation System and Reports 

CAG Customer Assistance Group

CCS Consumer Complaint System 

CSBS Conference of State Bank Supervisors

FDIC Federal Deposit Insurance Corporation

GPRA Government Performance and Results Act of 1993

MOU Memorandum of Understanding 

NAAG National Association of Attorneys General

OCC Office of the Comptroller of the Currency

OTS Office of Thrift Supervision

STARS Specialized Tracking and Reporting System

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately.
Page 1 GAO-06-293 OCC Preemption - Consumer Issues

United States Government Accountability Office

Washington, D.C. 20548

A

February 23, 2006 Letr

The Honorable Sue W. Kelly

Chairwoman

The Honorable Luis V. Gutierrez

Ranking Minority Member

Subcommittee on Oversight and Investigations

Committee on Financial Services

House of Representatives

In January 2004, the Treasury Department’s Office of the Comptroller of the 

Currency (OCC), which supervises federally chartered “national” banks, 

issued two final rules, the bank activities rule and the visitorial powers rule 

(commonly known as the “preemption rules”). The bank activities rule 

addressed the applicability of certain types of state laws to lending, 

deposit-taking, and other federally authorized activities of national banks. 

The visitorial powers rule addressed OCC’s view of its authority under 

federal law to inspect, examine, supervise, and regulate the affairs of 

national banks. Some state officials, Members of Congress, and consumer 

groups opposed the rules because of what they viewed as potentially 

adverse affects on the dual banking system—which encompasses both 

national and state-chartered banks—and on consumer protection. In 

particular, state attorneys general, state banking departments and 

consumer advocates expressed doubts about OCC’s ability or inclination—

as the sole regulator of national banks and their operating subsidiaries—to 

adequately protect consumers.

In addition to OCC, the Federal Reserve System (Federal Reserve)—

including the Board of Governors and the 12 Federal Reserve Banks—the 

Federal Deposit Insurance Corporation (FDIC), and the Office of Thrift 

Supervision (OTS)1 are the primary federal regulators of banks. For 

commercial and savings banks with state bank charters, states charter the 

entity and have supervisory responsibilities, while the Federal Reserve or 

FDIC serve as the primary federal supervisor for these banks. In the

1

OTS, established by Congress as a bureau of the Department of the Treasury, charters, 

examines, supervises, and regulates federal savings associations. For the purposes of this 

report, we refer to federal savings associations as banks.
Page 2 GAO-06-293 OCC Preemption - Consumer Issues

National Bank Act, the Congress created OCC to supervise national banks.2 

In its capacity as the supervisor of national banks, OCC issues regulations, 

policies, and interpretations to establish standards, define acceptable 

practices, provide guidance on risks, and prohibit or restrict practices. 

Under the Federal Trade Commission Act, OCC is charged with protecting 

consumers from unlawful and deceptive practices by national banks. One 

indicator of potential consumer protection issues is consumer complaints 

that OCC receives and their resolution. The main division within OCC 

tasked with handling consumer complaints is the Customer Assistance 

Group (CAG), located in Houston, Texas.

In your letter, you requested that we review OCC’s rulemaking process for 

promulgating the preemption rules, OCC’s process and capacity to handle 

consumer complaints, and the impact and the potential impact of the rules 

on the dual banking system and consumer protection. On October 17, 2005, 

we provided you with a report on the rulemaking process.3

 This report 

focuses on OCC’s process and capacity to handle consumer complaints. 

Specifically, the report identifies (1) how OCC’s consumer complaint 

process and its disposition of complaints compare with those of other 

federal bank regulators, (2) how OCC’s complaint process relates to the 

supervision of national banks, and (3) issues that consumer advocates and 

state officials have raised about OCC in relation to consumer protection 

and OCC’s responses to these issues. We will soon provide you with a 

separate report that discusses the impact of the rulemaking on the dual 

banking system and consumer protection.

To examine how OCC handles complaints and how its consumer complaint 

process and disposition of complaints compare with those of other bank 

regulators, we interviewed OCC officials, as well as their counterparts at 

the Federal Reserve, FDIC, and OTS. In addition, we analyzed OCC’s 

consumer complaint policies and procedures. We visited the CAG office in 

Houston and observed its work, and we reviewed a nonprobability sample 

of complaint case files to understand the different types of complaints and 

2

OCC is a bureau of the U.S. Department of the Treasury. 12 Stat. 665 (1863). In 1864, 

Congress revised the National Currency Act (renamed the National Bank Act) to provide for 

comprehensive OCC regulation of national banks. Although OCC is a bureau of the Treasury, 

it is an independent office within Treasury. In 1994, Congress amended the National Bank 

Act to describe OCC’s autonomy with respect to rulemaking. Pub. L. No. 103-325 § 331(b). 

3

See GAO, OCC Preemption Rulemaking: Opportunities Existed to Enhance the 

Consultative Efforts and Better Document the Rulemaking Process, GAO-06-8

(Washington, D.C.: Oct. 17, 2005).
Page 3 GAO-06-293 OCC Preemption - Consumer Issues

outcomes. We also obtained and analyzed data on consumer complaints 

from the four federal bank regulators covering calendar years 2000 to 2004 

to determine the number and types of complaints, as well as the nature of 

the outcomes for consumers, and how many complaints were resolved 

within the regulators’ required time frames. To determine how OCC’s 

complaint process relates to the supervision of national banks, we 

interviewed OCC and bank officials. We also analyzed documents to 

identify how, and the extent to which, bank officials and OCC examiners 

use consumer complaint information in planning and implementing 

supervisory activities, including policies and guidance. To identify issues 

raised by consumer advocates and state officials about OCC and its role in 

consumer protection, we conducted site visits between March and August 

2005, in four states: California, Georgia, New York, and North Carolina. We 

selected these locations based on their experience with state consumer 

protection laws. The site visits included interviews of state attorneys 

general, banking regulators, banking officials, and local consumer advocate 

groups, as well as analysis of relevant documents. We also interviewed 

state attorneys general and banking regulators in Iowa and Idaho by 

telephone. We interviewed representatives of national consumer groups 

and trade groups for state officials—banking regulators and states’ 

attorneys general—in Washington, D.C. We conducted our audit work in 

the previously mentioned four states, in addition to Texas and Washington, 

D.C., from October 2004 through December 2005 in accordance with 

generally accepted government auditing standards. Appendix I provides a 

detailed description of our scope and methodology.

Results in Brief OCC’s policies and procedures for handling and resolving consumer 

complaints are similar to those of the other federal regulators. All of the 

regulators follow the same general process when handling consumer 

complaints, and all claim to take a neutral position regarding consumers 

and banks that they regulate. However, OCC differs from some of its 

federal counterparts in that it does not have a customer feedback 

mechanism as part of its consumer complaint process. OCC, like the other 

federal bank regulators, resolves most complaints it receives by providing 

information to consumers. This can include clarifying consumers’ 

misunderstandings, referring consumers to other regulators, or advising 

the consumers to seek legal counsel when their complaint concerns a 

factual dispute that only a court can resolve. Less frequently, regulators 

determine that specific errors or wrongdoings have occurred. The volume 

of complaints OCC handles annually is greater than that of the other federal 

bank regulators, likely reflecting its position as the supervisor of banks that 
Page 4 GAO-06-293 OCC Preemption - Consumer Issues

account for the majority of the nation’s bank assets. OCC’s total volume of 

complaints has generally decreased over the past 5 years and has not 

increased appreciably since OCC issued the preemption rules. OCC, like 

other federal agencies, is required to measure its performance toward 

achieving goals related to services it provides. For example, all of the 

federal regulators strive to resolve consumers’ complaints within similar 

time frames, usually 60 days. In reporting its performance against its 

timeliness goals, OCC has overstated the agency’s percentage of 

complaints addressed within the 60-day target because it combined 

consumer inquiries, which typically require less time, with complaints in 

this measurement.

OCC uses consumer complaint data collected by CAG (1) to assess risks 

and identify potential safety, soundness, or compliance issues at banks; (2) 

to provide feedback to banks on complaint trends; (3) and to inform policy 

guidance for the banks it supervises. OCC’s bank examiners use consumer 

complaint information to focus examinations they are planning or to alter 

examinations in progress. Examiners review data CAG has collected on 

consumer complaints to aid them in determining the risks a bank may face 

and the appropriate scope of their examination. For example, because of 

complaints about a particular bank loan product, examiners may—in 

addition to reviewing the bank’s written policies regarding that product—

examine a sample of loan files. CAG also often provides OCC policy staff 

with summaries of consumer complaint information, which influences 

compliance policy guidance that OCC provides in advisory letters to banks. 

Finally, OCC also uses CAG’s complaint data to provide feedback to banks, 

focusing on potential risk issues that may affect the banks’ compliance 

with consumer protection laws and/or other risks. CAG officials said that 

they meet annually with the 10 banks having the highest complaint volumes 

during the previous calendar year. In calendar year 2004, such meetings 

would have covered the national banks responsible for about 81 percent of 

the total complaint volume. 

Many of the state officials and advocates with whom we spoke, 

nevertheless, continue to be concerned about OCC’s commitment and 

capacity to address consumer complaints, especially given their perception 

that the effect of the rules is a loss of protection provided by state laws and 

processes. While OCC has taken some action designed to increase 

consumer knowledge about its consumer assistance services, consumer 

groups and attorneys general assert that OCC is unwilling to share 

information on complaint outcomes, and expressed concern about OCC’s 

capacity to adequately serve consumers nationwide, particularly given 
Page 5 GAO-06-293 OCC Preemption - Consumer Issues

CAG’s single centralized location. Consumer advocates see themselves as 

working to advance the interest of their clients, while OCC or CAG, defines 

itself as a neutral arbiter. However, some consumer advocates and some 

state officials see OCC as pro-bank. Some advocates with whom we spoke 

were unclear about how the OCC processes complaints through CAG and 

what assistance it can provide consumers. OCC has taken steps aimed at 

better informing the public about its services, such as revising a consumer 

complaint brochure. OCC cited privacy concerns as limiting its ability to 

share information about the outcome of complaints, but it drafted a 

Memorandum of Understanding in an effort to facilitate sharing 

information with state agencies. However, state officials with whom we 

spoke generally viewed it as an arrangement essentially favoring OCC; and, 

according to OCC officials, only one state official signed the memorandum. 

OCC revised the draft memorandum in an attempt to address those 

concerns, however, no additional state officials were willing to enter into 

the memorandum. Many of the consumer groups with whom we spoke 

viewed CAG’s centralized location as a shortcoming because CAG staff, 

they said, could not be familiar with schemes or problem institutions in 

local areas. According to OCC, CAG operations were centralized in 

Houston because it offers efficiency advantages and facilitates identifying 

national trends and potential problems. Finally, some consumer groups and 

state officials questioned OCC’s complaint-handling capacity, stating that 

the 2004 preemption rules could eventually increase the number of 

complaints OCC receives. CAG data show that the total number of 

complaints, in any given year, received from state offices—including 

banking departments and states’ attorneys generals—is a relatively small 

percentage of the total number of complaints; therefore, any increase in 

referrals to OCC from those offices might not have a dramatic effect on 

total overall volume. To accommodate expected increases in telephone 

calls due to growth in the banks under its supervision, OCC has hired more 

CAG staff and has begun working with a third-party vendor to expand 

CAG’s telephone service from 7 to 12 hours a day. 

This report makes recommendations to the Comptroller of the Currency 

that are designed to improve OCC’s process for handling consumer 

complaints and inquiries as well as its efforts to inform, educate, and serve 

bank customers. We provided a draft of this report to OCC for review and 

comment. In written comments, the Comptroller of the Currency 

concurred with our recommendations (see app. II). Specifically, OCC 

agreed to develop and implement a customer feedback mechanism to 

receive input and measure satisfaction of those who have used CAG 

services. OCC also agreed to revise the data it publicly reports on 
Page 6 GAO-06-293 OCC Preemption - Consumer Issues

timeliness to reflect complaints resolved within the 60-day goal separately 

from data reported on inquiries. Finally, OCC agreed with our 

recommendation that it develop and implement a comprehensive plan to 

inform bank customers, consumer advocates, state attorneys general, and 

others of its role in handling consumer inquiries or complaints about 

national banks. OCC also provided technical comments that we 

incorporated, as appropriate.

Background OCC’s mission focuses on the chartering and oversight of national banks to 

ensure their safety and soundness, on fair access to financial services, and 

on fair treatment of bank customers. As of March 2005, the assets of the 

banks that OCC supervises accounted for approximately 67 percent—

about $5.8 trillion—of assets in all U.S. commercial banks. Among the more 

than 1,800 banks OCC supervises are 14 of the top-20 commercial banks in 

asset size.4

OCC groups its regulatory responsibilities into three program areas: 

chartering, regulation, and supervision. Chartering includes not only 

reviewing and approving applications for charters but also reviewing and 

approving proposed mergers, acquisitions, and reorganizations. Regulation 

includes establishing written regulations, policies, operating guidance, 

interpretations, and examination policies and handbooks. Additionally, in 

its most recent strategic plan, OCC identified its regulatory approach as 

one that would ensure that national banks operated in a “flexible legal and 

regulatory framework” that enables them to provide a “full competitive 

array” of financial services. 

According to OCC’s latest strategic plan, OCC’s supervision program 

consists of ongoing supervisory and enforcement activities undertaken to 

ensure that each national bank is operating in a safe and sound manner and 

is complying with applicable laws, rules, and regulations concerning the 

bank, customers, and communities it serves. OCC’s supervisory activities 

include examinations and enforcement actions, dispute resolution, ongoing 

monitoring of banks, and analysis of systemic risk and market trends. OCC 

policies establish a minimum level of activity that must occur during the 

supervisory cycle, during which time examiners assess the overall 

condition of the bank in the areas of capital adequacy, asset quality, 

4

OCC also supervises federal branches and agencies of foreign banks.
Page 7 GAO-06-293 OCC Preemption - Consumer Issues

management, earnings, liquidity, and sensitivity to market risks. Such 

examinations are generally referred to as “safety and soundness” 

examinations. In large banks, much of this work is conducted throughout 

the year by examiners assessing specific aspects of a bank’s management 

and operations, while in the smaller banks, the on-site examination 

generally occurs at one time during a 12- or 18-month period.5

 OCC has a 

team of full-time, on-site examiners who are located at large banks 

throughout the year and who conduct ongoing monitoring and 

examinations. In addition to the safety and soundness examinations, OCC 

conducts compliance examinations that assess the bank’s compliance with 

laws intended to protect or assist consumers, such as laws related to 

disclosure of loan terms, fair lending, equal credit opportunity, and others. 

Consumer compliance examinations are conducted on a continuous 3-year 

cycle in large banks and at least every 36 months at small banks. 

OCC traditionally has issued opinions on a case-by-case basis, rather than 

rules or regulations, on whether the National Bank Act preempts state laws 

that impose standards or restrictions on the business of national banks. In 

contrast, on January 13, 2004, OCC issued the two preemption rules on the 

extent to which the National Bank Act preempts the application of state 

and local laws to national banks and their operating subsidiaries. The rules 

and the manner in which OCC promulgated them generated considerable 

controversy and debate, including questions about OCC’s authority to issue 

the rules. According to OCC, the two rules “codified” judicial decisions and 

OCC opinions on preemption under the National Bank Act by making them 

generally applicable and clarified certain issues. The visitorial powers rule, 

as stated by OCC, clarifies that (1) federal law commits the supervision of 

national banks’ banking activities exclusively to OCC (except where 

federal law provides otherwise) and that (2) states may not use judicial 

actions as an indirect means of regulating those activities.6

 The banking 

activities rule preempts categories of state laws that relate to bank 

activities and operations, describes the test for preemption that OCC will 

apply to state laws that do not fall within the identified categories, and lists

5

According to OCC’s Comptroller Handbook—Bank Supervision Process (April 1996), a 

large bank is one with total assets of $1 billion or more or a bank that is part of a multibank 

holding company, which includes at least one bank with assets of $1 billion or more. 

6

12 C.F.R. 7.4000 (2005).
Page 8 GAO-06-293 OCC Preemption - Consumer Issues

certain types of state laws that are not preempted.7 In proposing the 

banking activities rule, OCC stated that it needed to provide timely and 

more comprehensive standards about the applicability of state laws to 

lending, deposit taking, and other authorized activities of national banks 

because of the number and significance of questions banks were posing 

about preemption in those areas.8

 

However, opponents such as consumer groups and state legislators feared 

that the preemption of state law, particularly concerning predatory lending 

practices, would weaken consumer protections. They noted, in 

commenting on the preemption rules, that the rules would prevent states 

from regulating operating subsidiaries of national banks and would 

diminish the states’ ability to protect their citizens. Prior to OCC’s issuance 

of the rules, consumers who had complaints with national banks or their 

operating subsidiaries sometimes filed complaints with state officials who 

tried to resolve them, although consumers could have filed such 

complaints with OCC, and many did. Since OCC issued the rules, some 

state officials refer all complaints involving national banks to OCC while 

others, through informal arrangements, still try to assist consumers. It is 

too soon to assess the practical effect of the rules on a consumer who has a 

complaint with a national bank, given the short time frame and legal 

questions raised by opponents to the rules. We address some facets of the 

rules’ practical effect on consumers in this report and will address others in 

our subsequent report on the impact of the rules on the dual banking 

system and consumer protection.

One of OCC’s strategic goals is to ensure all customers have fair access to 

financial services and are treated fairly. The agency’s strategic plan lists 

objectives and strategies to achieve this goal, including fostering fair 

treatment through OCC guidance and supervisory enforcement actions 

where appropriate, and providing an avenue for customers of national 

banks to resolve complaints. The main division within OCC tasked with 

handling consumer complaints is CAG. This group is a part of OCC’s Office 

of the Ombudsman, a distinct division of OCC that operates independently 

of the agency’s bank supervision function. In addition to CAG, the Office of 

the Ombudsman oversees (1) the national bank appeals process—a forum 

7

12 C.F.R. 7.4007, 7.4008, 7.4009, 34.3, 34.4 (2005). These regulations also contain an 

antipredatory lending standard and discuss OCC enforcement of section 5 of the Federal 

Trade Commission Act for consumer protection purposes.

8

68 Fed. Reg. 46119, 46120 (Aug. 5, 2003).
Page 9 GAO-06-293 OCC Preemption - Consumer Issues

by which banks may appeal the results of OCC’s supervisory examinations 

and ratings and (2) a postexamination questionnaire to obtain feedback 

from banks. The Ombudsman reports directly to the Comptroller and is a 

member of OCC senior management team (the Executive Committee) that 

includes the Chief Counsel, the Chief National Bank Examiner, and the 

Senior Deputy Comptrollers for Large Bank and Mid-size/Community Bank 

Supervision. 

CAG’s mission is to ensure that bank customers receive fair treatment in 

resolving their complaints with national banks. According to the 2004 

Report of the Ombudsman, CAG carries out its mission by providing 

services to three constituent groups: (1) customers of national banks—by 

providing a venue to resolve complaints, (2) OCC bank supervisors—by 

alerting supervisory staff of emerging problems that may result in the 

development of policy guidance or enforcement action, and (3) national 

bank managers—by providing a comprehensive analysis of complaint 

volumes and trends. The Deputy Ombudsman manages and directs CAG 

operations. Since 1999, CAG has employed about 40 full and part-time staff, 

and it had 49 staff in 2005. The annual operating and personnel budget 

attributable to CAG operations more than doubled from $2.6 million to $5.4 

million between 1999 and 2005. According to our analysis of CAG budget 

and staffing data, the budget’s growth has outpaced that of staff due to the 

design and implementation of its computer network.

OCC’s Handling of 

Consumer Complaints 

Is Similar to That of 

Other Regulators

OCC’s process for handling and resolving consumer complaints is similar to 

that of the other three federal bank regulators. We identified six distinct 

steps that all of the federal regulators follow when processing consumer 

complaints. Unlike two of the federal regulators, OCC lacks a process for 

collecting feedback from consumers it assists. OCC and the other federal 

regulators also resolve complaints in a similar fashion, with the outcomes 

generally falling into the same categories. While the most common 

resolution of complaints was that of the regulator providing the consumer 

additional information, regulators also consider a complaint resolved if it is 

withdrawn or tabled due to litigation, or if the regulator determines that the 

bank did, or did not, make an error. The volume of complaints OCC handles 

is generally in proportion to the assets of the national banks it supervises. 

From 2000 through 2004, OCC handled on average more than twice as 

many complaints as the other regulators combined. OCC and other federal 

regulators have similar goals in responding to consumer complaints in a 

timely fashion. However, by combining consumer inquiries and consumer 
Page 10 GAO-06-293 OCC Preemption - Consumer Issues

complaints in determining whether it met its timeliness goals, OCC 

overstated its performance on these goals. 

OCC and Other Federal 

Regulators Follow the Same 

General Process in 

Resolving Consumer 

Complaints

All four federal regulators we reviewed take similar approaches in 

processing consumer complaints about banks they supervise.9

 The 

regulators define their role as a neutral arbiter between consumers and the 

banks they regulate when processing complaints. For instance, the 2004 

Report of the Ombudsman states that CAG’s role is to be neutral in 

answering questions and offering guidance on applicable banking laws, 

regulations, and practices and that it should not be an advocate for either 

the bank or consumers. As illustrated in figure 1, each regulator generally 

follows six distinct steps in processing a complaint:

• The consumer submits the complaint;

• The regulator determines if the bank is under its supervision;

• The regulator forwards the complaint to the bank;

• The bank sends a response to the regulator;

• The regulator examines the response to see if it completely addresses 

the consumer’s complaint; and

• The regulator notifies consumer of complaint’s outcome.

9

During our work, we interviewed six state banking regulators about how they handle 

consumer complaints. Though all six generally follow the same process as the four federal 

regulators, we did not evaluate the states’ processes. The purpose of obtaining information 

from selected states was to provide context for our review of the federal regulators. See 

appendix I for a list of state banking regulators we interviewed. 
Page 11 GAO-06-293 OCC Preemption - Consumer Issues

Figure 1: Consumer Complaint Processes of Selected Banking Regulators

Although consumers may initially contact OCC or other regulators about 

their complaints via various methods, such as telephone, mail, fax, or, in 

some cases, E-mail, regulators normally do not formally accept a complaint 

until they have received a signed complaint form or letter.10 After a 

regulator receives a formal complaint, it must then determine if the bank 

involved is under its jurisdiction. If not, then the regulator determines who 

is the appropriate regulator and provides the consumer with contact 

information or forwards the complaint. Once the appropriate regulator 

receives the complaint, it forwards the complaint to the bank. OCC uses a 

secure Web-enabled application—CAGNet11—that permits it and 

Appropriate

federal or state agency

Sources: GAO (analysis); Art Explosion (images).

Consumer Regulator Bank

5

Complaint form/letterComplaint form/letter

1

2

Response

Findings

4

1 Consumer complains to regulator.

2 For banks not under its supervision, regulator refers consumer to another agency.

3 Regulator forwards complaint to banks under its supervision.

4 Bank responds to complaint (often simultaneously to consumer and regulator).

5 Regulator reviews bank’s response.

6 Regulator informs consumer of complaint’s resolution.

3

6

10Federal regulators have this requirement because many complaints involve personal 

information about the consumer that the regulator cannot request from a bank without the 

consumer’s consent. 

11CAGNet is a custom application that securely transfers consumer complaints and provides 

consumer complaint data to bank management for analysis. Of all complaints sent to any 

OCC supervised bank for response, approximately 90 percent were transmitted via CAGNet, 

based on December 31, 2004, data. 
Page 12 GAO-06-293 OCC Preemption - Consumer Issues

participating national banks to send and receive documents and images 

electronically.

Banks have a set period of time to respond to a complaint, though the 

period varies among regulators. Among the four federal regulators, the time 

allowed for initial response ranges from 10 to 20 days, with OCC requesting 

a response within 10 days.12 All of the regulators permit the banks to 

request additional time to review the complaint or compile necessary 

information. After completing its review of the complaint, the bank sends a 

response to the regulator. Often, the bank responds concurrently to the 

consumer, since the consumer is the bank’s customer. After receiving the 

bank’s response, each regulator examines it to determine if the consumer’s 

complaint has been completely and appropriately addressed. At this step, 

the regulator examines the complaint and response to determine if any 

additional follow-up is necessary by its supervisory or legal staff. If it is not 

satisfied with the bank’s response, then the regulator requests additional 

information or clarification from the bank. Once satisfied with the bank’s 

response, the regulator notifies the consumer about the outcome of the 

complaint.13

OCC Does Not Seek 

Feedback from Consumers 

on Services Provided

Of the four federal regulators, two offer consumers a method for providing 

feedback on the complaint process once the regulator has notified the 

consumer of the outcome. The Federal Reserve and FDIC offer consumers 

a feedback survey once their complaints have been resolved. The Federal 

Reserve mails a satisfaction survey, while FDIC directs consumers to a 

Web-based survey. Federal Reserve officials explained that the Federal 

Reserve has surveyed consumers since the mid 1980s and can link 

individual surveys back to original complaints, but the agency has not 

analyzed the aggregate data or used any findings from the surveys to 

modify its complaint-handling process. However, Federal Reserve officials 

explained that sometimes specific survey results are shared with staff who 

worked on the complaint or with management to better target staff 

training. 

12Among the six state regulators we interviewed, the range was 14 to 45 days.

13If a consumer does not find the bank’s response satisfactory, the consumer may contact 

the bank, seek legal counsel, or appeal to the regulator. Each federal regulator will 

reconsider a complaint that has already been resolved, though the appeal processes vary 

slightly across the regulators. 
Page 13 GAO-06-293 OCC Preemption - Consumer Issues

Neither OCC nor OTS has any formal mechanism to measure satisfaction 

with the consumer complaint process (though officials from both agencies 

explained that they receive many letters expressing both satisfaction and 

disappointment with their services). OTS officials explained that the small 

number of complaints they receive does not warrant the resources 

necessary to implement a customer satisfaction survey. 

Like other federal agencies, OCC measures and reports on certain aspects 

of its performance in accordance with the Government Performance and 

Results Act of 1993 (GPRA).14 According to the 2004 Report of the 

Ombudsman, OCC measures the effectiveness of its supervisory process 

through an examination questionnaire, which is provided to all national 

banks at the conclusion of their supervisory cycles. The questionnaire is 

designed to gather direct and timely feedback from banks on OCC’s 

supervisory efforts. While the questionnaire is a useful step to help OCC 

assess its performance regarding its national bank clients, OCC does not 

have a comparable tool to gather information regarding its performance in 

assisting the consumers of national banks. Collecting information about 

how individual consumers assess the assistance CAG provides in 

answering their questions or helping resolve a complaint with their bank 

could be equally helpful for OCC to measure its performance in ensuring 

fair treatment of bank customers. OCC officials stated that they understand 

the value of measuring the satisfaction of consumers who they assist and 

are evaluating several different options for obtaining consumer feedback.

Outcomes of Complaints 

Handled by All of the 

Federal Regulators Fall into 

the Same General 

Categories

OCC and the other three federal regulators offer consumers similar 

resolutions in their final responses to complaints. In analyzing the 

complaint data across the four federal regulators, we found that the 

regulators, after investigating complaints, generally resolved them in one of 

four ways, as shown in order of decreasing frequency: (1) providing the 

consumer with additional information without any determination of error, 

(2) withdrawing the complaint or tabling complaints already in litigation,

14GPRA requires agencies to set multiyear strategic goals in their strategic plans and 

corresponding annual goals in their performance plans, measure performance toward 

achieving those goals, and report on their progress in their annual performance reports.
Page 14 GAO-06-293 OCC Preemption - Consumer Issues

(3) finding that the bank had not made an error, and (4) finding that the 

bank had made an error.15

Regulators Provided Consumers 

Additional Information

Between 2000 and 2004, the most common resolution of complaints 

handled by all federal regulators was that consumers were provided more 

in-depth or specific information about their complaints (see fig. 2). 

15In order of decreasing frequency, for the Federal Reserve and OTS, the resolution 

categories from 2000 through 2004 were (1) providing the consumer with additional 

information, (2) finding the bank not in error, (3) finding the bank in error, and (4) 

withdrawing or tabling the complaint. For FDIC, resolutions consisted of (1) providing the 

consumer with additional information, (2) finding the bank not in error, (3) withdrawing or 

tabling the complaint, and (4) finding the bank in error.
Page 15 GAO-06-293 OCC Preemption - Consumer Issues

Figure 2: Complaint Resolutions of Selected Federal Regulators

Note: Columns may not add to 100 due to rounding. Bars without numbers are less than 4 percent.

In these cases, the regulator’s investigation revealed that the consumer 

required additional information to understand his or her situation, and the 

regulator made no determination of whether the bank or the consumer had 

made any error. For example: 

• The regulator might explain to the consumer that the complaint involves 

a contractual dispute that is better handled by a court. For instance, in 

one case, OCC informed a consumer to consider seeking legal counsel 

since the matter between the bank and the consumer involved a factual 

dispute concerning the interest rate on a credit card. The bank, based on 

its review of credit information, raised the interest rate on the 

OCC FDIC OT FRB S

2000 2001 2002 2003 2004

Year

2000 2001 2002 2003 2004

Year

2000 2001 2002 2003 2004

Year

2000 2001 2002 2003 2004

Year

Percentage Percentage Percentage Percentage

0

10

20

30

40

50

60

70

80

90

100

0

10

20

30

40

50

60

70

80

90

100

0

10

20

30

40

50

60

70

80

90

100

0

10

20

30

40

50

60

70

80

90

100

Bank was correct

Bank made error

Complaint withdrawn/in litigation

Consumer provided information

Sources: GAO analysis of OCC, FDIC, Federal Reserve, and OTS data.

49

17

13

21

41

4

21

33

41

24

31

50

4

19

27

51

24

24

60

4

5

32

57

7

33

56

6

35

61

5

32

57

7

34

62

11

23

60

8

4

28

57

11

4

28

52

9

5

34

50

8

6

37

43

37

7

13

48

33

8

12

44

26

27

46

26

10

18

45

30

9

15
Page 16 GAO-06-293 OCC Preemption - Consumer Issues

consumer’s credit card after providing the consumer adequate notice 

about the impending change to the terms of credit, which included 

information on how to opt out of the credit card if the consumer did not 

agree to the new terms. The consumer complained that the bank failed 

to provide adequate notice and, thus, improperly raised the interest rate. 

After reviewing the relevant documentation from both the consumer 

and bank, OCC informed the consumer that since the bank claimed to 

have sent the proper notice to the consumer and the consumer denied 

receiving the notice, the agency could not judge which party was 

correct. Therefore, OCC counseled the consumer to consider taking 

legal action should the consumer want to pursue the matter further. 

• The regulator may determine that rather than wrongdoing, there was a 

miscommunication between the bank and its customer.16 For example, 

in one case involving a checking account, a bank charged a maintenance 

fee to an account with a zero balance. The checking account had a 

minimum monthly maintenance fee, which the bank deducted 

automatically from the checking account. When the bank charged the 

monthly maintenance fee and the balance became negative, the bank 

charged an overdraft fee. The consumer understood that overdraft 

protection should cover the maintenance fee but did not recognize that 

overdraft protection would result in an additional fee. After OCC 

forwarded the complaint to the bank, the bank decided to no longer 

hold the consumer liable for the delinquent monthly maintenance and 

overdraft fees that accumulated. OCC viewed the matter as 

miscommunication between the bank and consumer. 

• The regulator may determine that the complaint should be forwarded to 

a different regulator. When appropriate, all four federal regulators 

directly refer consumers, or forward their complaints, to other federal 

and state agencies. We found that three federal regulators—the Federal 

Reserve, FDIC, and OCC—referred a considerable number of 

consumers who contacted them to another federal agency to have their 

complaints or inquiries addressed. For example, from 2000 through 

2004, FDIC referred about 40 percent of the consumers who contacted 

them with a complaint to another federal agency; the Federal Reserve 

and OTS referred about 53 percent and 3 percent, respectively. OCC, 

16Of the four federal regulators, OTS and OCC specifically identify complaints that result 

from miscommunication, while the Federal Reserve and FDIC include such resolutions 

under broader categories. 
Page 17 GAO-06-293 OCC Preemption - Consumer Issues

during this same period, referred approximately 38 percent of its callers 

to another federal agency.17

Complaint Is Considered 

Withdrawn or Tabled Due to 

Litigation

For OCC, the second most frequent type of complaint resolution was 

“withdrawn”18 or “complaint in litigation,” while it was the least common 

for the Federal Reserve and OTS and the third most common for FDIC.19

These are complaints that, by and large, the regulator is not able to address. 

None of the federal regulators address complaints that they find are already 

involved in any legal proceeding at the time the consumer contacts them. In 

the case of OCC, one of the major reasons for complaints being withdrawn, 

according to OCC officials, is that the consumer does not send in the 

requested information, such as the signed complaint form or letter OCC 

requires before it begins any complaint investigation. As shown in figure 2, 

in 2000, OCC closed about 17 percent of complaint cases because it did not 

receive requested information or the complaint was in litigation, while in 

2004, OCC closed nearly 37 percent of these cases for the same reasons. 

One reason for this increase, OCC officials explained, is that in mid-2000 

they made changes to the database that tracks complaints. In particular, 

after the changes, the database coded complaints as “withdrawn” when the 

regulator did not receive information it requested from a consumer within 

30 days. Previously, this type of complaint remained opened indefinitely or 

until the consumer provided the information. OCC’s policy is to reopen any 

complaint cases if the consumer sends in the requested information after 

60 days from the day OCC made the request for additional information. 

Since OCC does not open a new case in such instances, this policy 

negatively impacts OCC’s average in meeting its timeliness goals for 

resolving complaints. 

According to OCC officials, another reason for this increase is OCC’s policy 

of encouraging consumers to contact the bank prior to filing a complaint 

with OCC.20 It is typical for the staff to provide a case number and 

complaint form to the consumer to use if he or she is unsuccessful in 

17In 2000, OCC began coding all referrals to other federal and state agencies as inquiries. 

18Instances in which the regulator determined the complaint to be withdrawn does not 

necessarily mean that the consumer withdrew the complaint. 

19This resolution category was on average about 3 percent for Federal Reserve and OTS, and 

about 9 percent for FDIC, from 2000 through 2004.

20This practice is shared by the Federal Reserve, FDIC, and OTS.
Page 18 GAO-06-293 OCC Preemption - Consumer Issues

resolving the problem with the bank. OCC officials explained that in many 

instances they assume that the bank and the consumer has worked the 

problem out since the consumer never sends in a completed complaint 

form. In these instances, OCC codes the complaint as withdrawn because 

the consumer did not submit a completed complaint form. OCC officials 

explained that this coding procedure has an advantage. Although the 

complaint has been withdrawn, the information that the consumer 

provided through the initial contact is available to examination staff as well 

as to the bank, and it provides insight to potential issues at the bank.

Regulators Determine That Bank 

Was Not in Error

This category of complaint resolution was third for OCC in terms of 

frequency, while it was second for the other regulators. The regulators 

frequently resolve cases by finding that banks did nothing wrong, and the 

consumers do not have legitimate complaints, that is, the bank was correct. 

For example, in one case, OCC informed the consumer that an incorrectly 

completed deposit slip led the consumer to believe the bank improperly 

deducted funds from the consumer’s checking account. OCC had the bank 

provide the consumer copies of the deposit slip and checks recorded on the 

slip, which showed the consumer inaccurately transcribing the amounts 

from the checks to the deposit slip. 

Regulators Determine That Bank 

Was in Error

“Bank Made an Error” was the least common outcome for complaints 

resolved by OCC and FDIC and next-to-least common for the other two 

regulators. The bank error category includes both regulatory violations and 

problems consumers had with the bank’s customer service. In these 

instances, the regulators determine that the bank did make an error in how 

it provided its products and services to the consumer. For example, in one 

case, OCC determined that a bank did not properly respond when 

fraudulent charges were identified on a consumer’s credit card account, 

and the bank did not reverse them. The complaint was resolved when the 

bank reimbursed the consumer’s credit card account. 

OCC Handles a Greater 

Volume of Complaints Than 

the Other Bank Regulators

Likely reflecting the greater volume of bank assets under its supervision, 

OCC handled more complaints from 2000 through 2004 than FDIC, OTS, 

and the Federal Reserve combined. During this time period OCC 

processed, on average, 10 complaints for every billion dollars under its
Page 19 GAO-06-293 OCC Preemption - Consumer Issues

supervision, while FDIC averaged 6 complaints, the Federal Reserve 3 

complaints, and OTS 5 complaints (see fig. 3).21

Figure 3: Number of Complaints Per Billion Dollars in Assets under Supervision of Selected Federal Regulators

From 2000 through 2004, credit cards were the most common product 

involved in complaints addressed by OCC, FDIC, and the Federal Reserve.22

According to officials from OCC and FDIC, complaints about credit cards 

will continue to remain high because consumers have multiple credit cards 

and use them frequently. During this same time period, the assets of banks 

21In addition to complaints, regulators also handle inquiries, defined as informational-only 

calls and correspondence. All the regulators handle inquiries in the same manner by 

providing the consumer the relevant information or directing the consumer to appropriate 

sources for the information, such as other regulators. This report focuses on complaints.

0

5

10

15

20

2000 2001 2002 2003 2004

Year

Complaints per billion asset dollars

OCC

0

5

10

15

20

Complaints per billion asset dollars

FDIC

2000 2001 2002 2003 2004

Year

0

5

10

15

20

Complaints per billion asset dollars

FRB

2000 2001 2002 2003 2004

Year

0

5

10

15

20

Complaints per billion asset dollars

OTS

2000 2001 2002 2003 2004

Year

Sources: GAO analysis of OCC, FDIC, Federal Reserve, and OTS data.

22Credit card complaints accounted for, on average, about 39 percent of all complaints 

handled by OCC, from 2000 through 2004. For FDIC, the amount was nearly 29 percent and 

for the Federal Reserve, approximately 40 percent. 
Page 20 GAO-06-293 OCC Preemption - Consumer Issues

under OCC’s supervision that issued credit cards averaged $221 billion, 

while the total assets of the banks under the supervision of the other three 

regulators averaged $87 billion.23 Given these numbers, it would appear 

that the volume of complaints OCC handles is not out of proportion to the 

bank assets under its supervision, especially given that OCC supervises 

several banks that specialize in issuing credit cards. Although OTS also 

receives complaints about credit cards, during the same time period it 

received the most complaints about home mortgage loans. This is not 

exceptional, given that mortgage lending is a leading activity of the thrifts 

and savings banks OTS supervises.

Federal Regulators Have 

Similar Timeliness Goals, 

but OCC Overstated Its 

Timeliness in Resolving 

Complaints by Including 

Inquiries in Its Calculation

Consistent with GPRA and its implementing guidance, OCC provides 

information in its annual report that includes performance measures, 

workload indicators, customer service standards, and the results achieved 

during the fiscal year. OCC aims to resolve complaints within 60 days. The 

Federal Reserve, FDIC, and OTS also have a goal of resolving complaints 

within 60 days. In fiscal years 2003 and 2004, OCC’s target was to close 80 

percent of all complaints within 60 calendar days of receipt. According to 

its 2003 annual report, OCC exceeded its target by closing 87 percent of 

complaints within 60 days. However, our analysis of calendar year data that 

OCC provided to us shows that only about 66 percent of complaints were 

closed within 60 days. Similarly, the 2004 annual report states that OCC 

closed 74 percent of complaints within the established time frame, while 

our analysis of OCC’s data shows that in calendar year 2004, it was 

approximately 55 percent. The discrepancy between the percentages 

reported in the annual reports and our analysis cannot be entirely 

explained by the fact that we reviewed calendar year data and the annual 

reports include fiscal year data.24 

OCC officials explained that the differences between its reported figures 

and our analyses are the result of differences in the consumer complaint 

data on which each is based. The annual reports stated that the agency 

closed 69,044 complaints in 2003 and 68,104 complaints in 2004. However, 

these totals include inquiries that the agency handled, not just complaints. 

23By the end of 2004, OCC had under its supervision banks that accounted for nearly 67 

percent of all assets held in commercial banks. 

24To collect comparable data from all four federal regulators, we requested the data by 

calendar year. 
Page 21 GAO-06-293 OCC Preemption - Consumer Issues

Inquiries—which may be questions or comments subject to an immediate, 

simple answer—can typically be handled at the initial contact between the 

consumer and OCC, while some complaints can take well over the 60-day 

time frame to investigate and resolve. Therefore, by including both 

inquiries and complaints in determining whether it met its timeliness goals, 

OCC overstated its performance, as measured by the percentage of 

complaints resolved within the target time frame. OCC officials explained 

that the data in the annual reports were presented using the generic term 

“complaints” to simplify the amount of information given to the reader. 

As OCC officials explained, some complaints involve more complex 

products, such as mortgages. Also, depending on the nature of the 

complaint, such as allegations of fair lending abuse, some investigations 

take more time. All four regulators have a percentage of complaints that 

they cannot resolve within their established time frames. OCC officials also 

explained that the time used in resolving complaints is a result of how it 

handles consumer appeals. Since OCC considers an appeal a reopened 

complaint, the start date for calculating the number of days it takes to 

resolve a complaint reverts back to the date it was originally filed with the 

agency. This practice had the affect of adversely impacting the measure of 

OCC’s timeliness in meeting its timeliness goals.

CAG’s Consumer 

Complaint Data Inform 

OCC’s Bank 

Supervisory Activities

According to the 2004 Report of the Ombudsman, CAG’s role includes 

providing information to OCC examiners and the banks to “elevate” the 

issues raised by consumers and make them visible to OCC staff involved in 

supervision. The complaint data CAG collects, summarizes, and 

disseminates to OCC’s examiners helps the examiners to identify banks, 

activities, and products that require further review or investigation. OCC 

supervision guidance requires examiners to consider consumer complaint 

information when assessing a bank’s overall compliance risk and ratings 

and when scoping and conducting their examinations.25OCC guidance also 

requires that the banks have processes in place to monitor and address 

consumer complaints. 

According to compliance examiners we interviewed, the examiners learn 

about complaints primarily through a Web-based application called CAG 

25Two OCC booklets from the Comptroller’s Handbook establish the agency’s general 

examination policies and procedures: Community Bank Supervision and Large Bank 

Supervision.
Page 22 GAO-06-293 OCC Preemption - Consumer Issues

Wizard. The application allows examiners to access near real-time 

consumer complaint data. Examiners can review specific complaints, 

generate standard reports or conduct customized searches of the data. The 

information available to examiners includes data on all of the banks OCC 

supervises, not just those where an examiner is currently assigned. With 

this capability, examiners can also generate similar reports on similar 

institutions. Examiners with whom we spoke said CAG Wizard is a useful 

tool. They reported using the application to prepare for an examination or 

when developing the annual risk assessment of the bank. Often, the 

examiners compare the complaint data that banks maintain with the data 

CAG provides through CAG Wizard.

OCC examiners and CAG staff also collaborate on other activities. For 

example, CAG staff may alert examiners if there are certain types of 

complaints that warrant further attention or if patterns emerge in the 

overall complaint volume about the bank. CAG officials and OCC 

examiners told us that there is an open line of communication between 

their respective staffs. For example, examination staff at one national bank 

undertook a specific investigation based on a complaint forwarded from 

CAG. Examination staff specifically requested and reviewed information 

from the bank concerning the advertising of a product and the bank’s 

associated fees. Examiners can also forewarn CAG staff about any 

impending bank actions related to products, services, or policy that may 

cause consumers to complain. For instance, the bank might be changing 

the terms on a credit card product, and as such, sending a notification to 

customers. Such mailings typically lead to an increase in calls to CAG, but 

with forewarning from the examiners, CAG can have more accurate 

information on hand to use in assisting bank customers who call with 

questions.

OCC also uses consumer complaint data collected by CAG to formulate 

guidance for national banks. Topics of these guidelines cover various 

aspects of banking, including risks involved with using third-party vendor 

partners (e.g., when a bank partners with another business to provide a 

service to bank customers), predatory lending, and credit card practices. 

For example, CAG received a significant number of consumer complaints 

about aggressive marketing tactics and inadequate disclosures related to 

credit repair products offered through third parties. In response to the 

complaints received, OCC issued guidance in 2000 warning banks about
Page 23 GAO-06-293 OCC Preemption - Consumer Issues

risks posed to them by engaging third-party vendors for products and 

services linked to the credit cards that banks issue.26

CAG provides the largest national banks with aggregate information on the 

complaints about them. Also, CAG staff meets annually with bank officials 

of at least the 10 banks that received the most complaints during the 

previous calendar year. In 2004, the 10 banks with the most complaints 

accounted for 81 percent of all the complaints that OCC received. At these 

meetings, CAG officials discuss significant issues, such as data on 

complaint volume and trends, comparable data for the bank’s peers and the 

industry, and current issues the bank should address. Prior to these 

meetings CAG officials consult with examiners on what specific issues 

warrant additional analysis or attention by bank officials. According to 

examiners, they attend the meetings and offer input on any specific topics 

CAG should highlight. Most bank officials with whom we spoke also said 

that the meetings with CAG were useful in helping them address customer 

satisfaction. 

Despite OCC Efforts, 

State Officials and 

Consumer Advocates 

Still Have Concerns 

About OCC’s 

Commitment and 

Capacity to Address 

Consumer Complaints

Many of the state officials and advocates with whom we spoke continue to 

be concerned that OCC does not have the necessary commitment or 

capacity to provide consumers with sufficient protection against violations 

of laws. Unlike consumer advocates and state attorneys general, OCC 

defines itself as a neutral arbiter in terms of assisting consumers. Yet state 

officials and consumer advocates perceive OCC as being pro-bank, not 

neutral, and as such, they may hesitate to forward complaints on behalf of 

their citizens or clients. Some officials were unaware of CAG’s process for 

handling consumer complaints; however, OCC recently took steps to 

publicize its customer assistance function. State officials were concerned 

about a perceived unwillingness by OCC to share information about the 

outcomes of complaints. Other groups with whom we spoke view the 

CAG’s centralized location as a shortcoming because CAG staff, they said, 

could not be familiar with current lending practices that pose high risk to 

consumers or to problematic institutions in local areas. OCC has taken 

26The guidance encourages banks to conduct comprehensive due diligence to determine 

what third-party services or products can best help the bank achieve its goals and monitor 

the performance of the third-party vendors with regular reporting and documentation of 

such items as business plans, risk management reports, and contracts. OCC Advisory Letter 

2000-9. 
Page 24 GAO-06-293 OCC Preemption - Consumer Issues

some steps to provide flexibility in operations to meet any upcoming 

increases in demand for its services.27

While State Officials and 

Advocates We Contacted 

Remain Concerned About 

OCC’s Commitment to 

Consumer Protection, Some 

Were Unaware of Its 

Consumer Protection 

Efforts

As we previously reported, OCC received close to 3,000 letters commenting 

on the banking activities rule, with the majority of commenters opposed to 

the rule and citing concerns about weakened consumer protections.28

Comments from state officials argued that a lack of state regulation would 

create “an enormous vacuum of consumer protection without adequate 

federal regulation to fill the gap.” Many of these commenters suggested that 

OCC needed to do more, not less, to protect consumers. These views were 

echoed by those with whom we spoke in preparing this report, as were 

concerns that the visitorial powers rule severely limits the advocates’ and 

state officials’ abilities to assist their constituents and clients, thereby 

exposing them to potential consumer protection violations. The rule, 

according to OCC, clarifies that federal law commits the supervision of 

national banks exclusively to OCC. Because advocates work to advance the 

interests of their clients, they do not see their role being adequately filled 

by OCC, or CAG, which defines itself as a neutral arbiter. Although part of 

OCC’s mission is to ensure fair access to financial services and fair 

treatment of bank customers, the perception remains, among the groups 

with whom we spoke, that OCC is “on the side” of the banks. Some 

advocates with whom we spoke were unclear about how OCC processes 

complaints through CAG and what assistance it can provide consumers. 

Some of the state officials and advocates with whom we spoke were 

unaware of the CAG, its process for responding to consumer inquiries and 

complaints, or the help it can provide. Some of the state officials and 

advocates with whom we spoke said that they are reluctant to refer clients 

to the agency, given their level of mistrust of OCC and lack of knowledge 

about its customer assistance function. However, CAG data from 

November 2001 to September 2005 show referrals from all 50 state banking 

departments and 49 state attorneys’ general offices.

OCC officials said that they have several ongoing initiatives aimed at better 

informing the public about their services. For example, OCC recently 

27Our forthcoming report will discuss broader issues related to the impact of the preemption 

rules on dual banking and consumer protection. For example, it will provide information on 

how some state officials have handled consumer complaints since OCC issued the rules.

28GAO-06-08.
Page 25 GAO-06-293 OCC Preemption - Consumer Issues

revised its consumer complaint brochure. The brochure has “frequently 

asked questions” about OCC and the role it, and CAG specifically, play in 

resolving consumer complaints. This new version will be printed in Spanish 

and English. As of November 2005, OCC said they had distributed a small 

number of brochures to each national bank. In addition a “camera-ready” 

version will be made available to banks so that they can print more copies 

if they choose. However, OCC officials said they will not require the banks 

to display or distribute the brochures. In addition, officials said they do not 

have a distribution plan to give the brochure directly to the general public, 

although they did give a small supply to the Better Business Bureaus.29 We 

note that the information in the brochure is available on the OCC Web site. 

OCC also informs the public about CAG services and performance through 

the Annual Ombudsman report. This report is available on OCC’s Web site 

and contains information on total case volume handled in the previous 

year, as well as a general discussion about complaint volumes and trends. 

Also, in 2004, OCC redesigned its Web site to enhance the consumers’ 

capability to access information and learn more about its services. The 

redesigned Web site provides a searchable list of national bank operating 

subsidiaries that do business directly with consumers, which allows 

individual consumers to determine if an entity is associated with a bank 

supervised by OCC. However, some of the consumer groups with whom we 

spoke said that one limitation of this list is that it does not have dates 

attached to the list of operating subsidiaries indicating when they became 

associated with the bank, which can be important in trying to identify the 

parties involved in a transaction at a particular time. OCC officials said that 

they will address any complaint brought against a national bank and its 

operating subsidiaries, regardless of when the transaction took place. 

OCC officials also said CAG staff are engaging in a series of outreach 

meetings with state government organizations and Better Business 

Bureaus.30 For example, in November 2004, senior CAG officials met with 

one state attorney general’s office to demonstrate how OCC handles 

29Better Business Bureaus are private, nonprofit organizations funded by member 

businesses and other support. Their aim is to foster fair and honest relationships between 

businesses and consumers. 

30In 2004, the bureaus reported receiving over 17,000 complaints about credit cards and 

related plans and about 11,000 complaints about mortgages. Among all complaints, these 

bank-related issues ranked number 3 and 12, respectively. Complaints about cell phone 

service ranked number one and auto dealers number two. 
Page 26 GAO-06-293 OCC Preemption - Consumer Issues

consumer complaints. That state attorney general told us that it was clear 

from the meeting that the CAG officials seemed earnest in wanting to 

cooperate, even though the two sides might still disagree on the 

appropriate roles for OCC and the states in protecting consumers. OCC 

officials said they intend to hold similar meetings with other state attorneys 

general and state banking departments, although none were planned as of 

November 2005. OCC staff is also engaged in outreach efforts with the 

Better Business Bureaus, which includes conference presentations, as well 

as meeting with several bureaus in order to educate them on OCC’s 

customer assistance services and to enable OCC to better understand the 

nature and volume of complaints received by the Better Business Bureaus 

involving national banks. In addition, OCC officials are requesting that 

Better Business Bureaus update their Web sites to include a link to OCC. 

Also, during fiscal year 2005, representatives from CAG and OCC’s 

Community Affairs office held outreach meetings with national consumer 

group organizations, such as the Consumer Federation of America, 

American Association of Retired Persons, and the National Association of 

Consumer Agency Administrators. 

State Officials View OCC’s 

Efforts to Share Information 

About Complaint Outcomes 

as Unsatisfactory

Among some of the states’ attorneys general with whom we spoke, there is 

the perception that OCC is not willing to cooperate in protecting citizens, 

as evidenced, in part, by their perception of OCC’s unwillingness to share 

information on consumer complaint outcomes. Most state attorneys 

general staff with whom we spoke said they are willing to forward 

complaints to OCC, but they have not been receiving what they perceive to 

be adequate information on the outcome of referrals. According to OCC 

officials, it is agency policy to send the consumer a letter acknowledging 

receipt of a complaint submitted to OCC. If a complaint is forwarded to 

OCC from another agency, it is OCC’s policy to send a copy of the 

acknowledgment letter to the forwarding agency. Nonetheless, some state 

attorneys general and other state officials said that, in their experience, 

OCC does not provide any information about the resolution of the 

complaints, which is what state officials want. However, in commenting on 

a draft of this report, OCC officials told us that if state officials request 

information on the resolution of an individual complaint, OCC will notify 

them of the outcome. Specifically, they said that an attorney from OCC’s 

Community and Consumer Law Division will contact the state official once 

a case is closed and will discuss the case. Although it is not a written policy, 

OCC officials told us these contacts are common practice. 
Page 27 GAO-06-293 OCC Preemption - Consumer Issues

In July 2003, OCC suggested a “Memorandum of Understanding” (MOU) 

between itself and state attorneys general and other relevant state officials 

that could, in OCC’s words, “greatly facilitate” its ability to provide 

information on the status and resolution of specific consumer complaints 

and broader consumer protection matters state officials might refer to 

them. In his letter prefacing the MOU, the former Comptroller of the 

Currency stated that both attorneys general and OCC “have a mutual 

interest in ensuring that consumers are protected from illegal, predatory, 

unfair, or deceptive practices.” To that end, the Comptroller urged 

attorneys general to send individual customer complaints directly to OCC. 

He also asked state officials to refer concerns about broader consumer 

protection issues to OCC saying, 

“Where you believe there is a broader issue, such as the applicability of a particular State 

law to national banks generally, or if you have information that a specific national bank is 

engaged in a particular practice affecting multiple customers that is predatory, unfair or 

deceptive, this information should be communicated to the OCC’s Office of Chief Counsel 

for coordination.” 

The MOU was sent to all state attorneys general as well as the National 

Association of Attorneys General (NAAG) and the Conference of State 

Bank Supervisors (CSBS). Some of the officials from banking departments 

and the offices of attorneys general that we interviewed as well as 

representatives of CSBS said they viewed OCC’s proposed MOU as 

unsatisfactory because, in their view, it essentially favored the OCC. In a 

written response to the OCC Comptroller, declining to sign the MOU, one 

state’s attorney general described the proposal as one where “states send 

complaints to OCC with the idea that, at some later date, we would have 

the right to inquire about the results of the ’resolution’ of the matter 

obtained by OCC.” In addition, some of the state officials with whom we 

spoke believed that signing the proposed MOU would amount to a tacit 

agreement to the principles of the banking activities and the visitorial 

powers rules.

According to OCC, states’ attorneys general—in informal comments on the 

proposed MOU—felt that the proposal was unilateral, imposing certain 

conditions upon states that received information from OCC, but not upon 

OCC when it received information from state officials. Also, OCC noted 

that the proposed MOU did not provide for referrals from OCC to state 

agencies of consumer complaints OCC received pertaining to state 

regulated entities. Therefore, in 2004, OCC attempted to address these 

concerns in a revised MOU, which it provided to CSBS and the Chairman of 

the NAAG Consumer Protection Committee. According to OCC, the revised 
Page 28 GAO-06-293 OCC Preemption - Consumer Issues

MOU expressly says that an exchange of information does not involve any 

concession of jurisdiction by either the states or by OCC to the other. 

Specifically, it states, 

“Nothing in this MOU is intended to or shall be construed to affect, modify, or imply any 

conclusion regarding the jurisdiction or authority of either of the agencies or affect the 

rights or obligations of the agencies under existing law concerning the scope of the 

respective jurisdiction of each of the agencies to supervise, examine or regulate the 

regulated institutions covered by this MOU.” 

Only one state official signed the original 2003 Memorandum, and 

according to OCC, to date, no additional state officials have signed the 2004 

version.

Others Raise Concerns 

About CAG’s Centralized 

Operations, Although OCC 

Cites Advantages

Consumer groups also expressed misgivings about forwarding complaints 

to OCC. Many of the groups with whom we spoke viewed CAG’s centralized 

location as a shortcoming because they believe that the CAG staff thus 

could not be familiar with current lending practices that pose high risk to 

consumers or problematic institutions in local areas. The consumer 

advocates we interviewed said an in-depth understanding of local real 

estate conditions was necessary to prevent predatory lending abuses. 

Furthermore, they said that OCC’s 60-day time frame is too long to 

effectively address many of their clients’ acute needs, such as when 

immediate action is needed to stop a foreclosure proceeding. We note 

however, that the other federal bank regulators and three of the six state 

regulators with whom we spoke all have a 60-day goal for resolving 

complaints.

According to OCC officials, the agency centralized its consumer operations 

in Houston because it offers efficiency advantages. FDIC officials said they 

are consolidating their complaint handling operations for the same 

reasons. OCC examiners we interviewed also pointed out that a central 

facility makes sense, given that national banks operate across state lines 

and have so many customers in multiple markets. According to CAG and 

bank supervision staff, funneling data to, and analyzing it in, one location 

provides more potential for seeing national trends and potential problems. 

However, there are also potential drawbacks to having only one 

operational facility available for any such customer function, as it increases 

the likelihood that there might be disruptions in service. For example,
Page 29 GAO-06-293 OCC Preemption - Consumer Issues

during Hurricane Rita in September 2005, telephones were not staffed for 4 

days at CAG, due to the evacuation of Houston.31 However, consumers 

were able to submit complaints by either E-mail or fax. During that period, 

OCC received 14 faxes opening new cases, as well as 184 E-mails—34 from 

bankers and 150 from consumers. Of those complaints from consumers, 16 

were from Members of Congress. OCC staff said these numbers are in-line 

with normal activity levels. When we asked about the closure, the 

Ombudsman replied that he decided to obey the evacuation notice issued 

by Houston-area officials, and while this may have resulted in some 

backlog of cases, his first priority was ensuring the safety of the Houston 

OCC employees. 

In December 2005, OCC began seeking private-sector support for the CAG 

facility, in order to expand its telephone service hours. This expansion will 

give OCC the ability to quickly expand CAG’s telephone operating hours in 

the event of an emergency, and because the third-party vendor will be 

located outside of Houston, those staff will be able to help OCC continue to 

serve consumers, even if the Houston office is unable to operate.

Some Groups and Officials 

Have Concerns About 

Complaint Handling 

Capacity, and OCC Plans to 

Increase Capacity

Some consumer groups and state officials stated that the recent banking 

activities and visitorial powers rules could potentially increase the number 

of complaints OCC receives, since now OCC will more likely handle all 

complaints pertaining to national banks and their operating subsidiaries. 

These groups and officials argued that OCC did not have the capacity to 

adequately handle any new volume. Furthermore, they contend OCC could 

not match the resources (i.e., personnel and hours of operations) of state 

banking departments, consumer credit divisions, and offices of state 

attorneys general that currently work to resolve complaints and, more 

broadly, to identify fraudulent and abusive practices. However, we note 

that state banking departments and state attorneys general handle other 

types of consumer complaints, such as complaints about automobile 

dealers, mortgage brokers, and check cashers. 

Since OCC issued the preemption rules in January 2004, the volume of 

complaints, according to CAG data, has remained fairly steady. In fact, 

31According to OCC’s continuity of operations plan, CAG telephone lines serving consumers 

are to be back online 8 days after a closure. The telephone center in Houston would also 

serve as the main communication hub for OCC nationwide, should a disaster occur in 

Washington, D.C., or elsewhere outside of Houston.
Page 30 GAO-06-293 OCC Preemption - Consumer Issues

between 2000 and 2004 complaints received by OCC have decreased 37 

percent. According to OCC staff, complaint volume was high around 2000 

due to a settlement with a large national bank on credit card disclosure 

issues. CAG data for 2005, while available only through June at the time of 

our review, indicate a potential increase in the volume of complaints when 

compared with 2004.32 CAG officials believe that the conversion from state 

charters to federal charters of two large banks in 2004 accounts for the 

increase.33 That is, customers of those banks who had complaints 

previously contacted the appropriate state regulator and either the Federal 

Reserve or FDIC, which jointly regulate state chartered banks. After the 

banks converted to federal charters, customers contacted OCC concerning 

any complaints. 

These data suggest that an increase to levels of complaints experienced 

before the 2004 preemption rules could be absorbed by current OCC 

resources. Further, CAG data show that the total number of complaints, in 

any given year, received from state offices, including banking departments 

and states’ attorneys generals, is a relatively small percentage of the total 

number of complaints; therefore, any increase in referrals to OCC from 

those offices might not have a dramatic effect on total overall volume. 

Nevertheless, concerns that OCC resources were not equivalent to those of 

a state attorney general or state banking department were still prevalent 

among some of those with whom we spoke at the state level. However, 

OCC officials said that they have staff—beyond CAG—that work on 

consumer protection issues, including bank examiners in compliance 

supervision and attorneys in the Community and Consumer Law and 

Enforcement and Compliance divisions. 

Until 2004, OCC staffed the CAG’s toll-free telephone line 4 days a week, 8 

hours a day, but now has service 5 days. One measure OCC uses to gauge 

how effectively it is servicing customers is the wait time for callers to speak 

with a CAG representative. OCC officials told us their goal is to answer 80 

percent of CAG calls within 3 minutes or less. According to OCC data,

32The number of complaints from January to June 2005 was 21,453. Assuming levels for the 

second half of the year match those of the first, we project a total of 42,906 for all of 2005. 

Complaints for 2004 were 34,669.

33During 2004, two large state-chartered banks came under OCC's supervision when they 

converted to national charters. One had assets of $649 billion and the other $93 billion.
Page 31 GAO-06-293 OCC Preemption - Consumer Issues

between June 2004 and November 2005, CAG met this goal, although wait 

times generally were longer for Spanish speaking services.34 In addition, to 

accommodate the expected increase in call volume due to recent charter 

conversions, OCC has recently hired more CAG specialists. Lastly, in 

December 2005, OCC began seeking private-sector support for the CAG 

facility, in order to expand its telephone service hours. A third-party vendor 

will handle routine matters, such as providing materials to satisfy 

noncomplex questions, obtaining information from callers that is necessary 

to open a case file, routing the caller to the appropriate OCC specialist and 

providing the status of an open case. In addition, the vendor’s employees 

will be able to direct the many callers who have concerns that pertain to 

institutions not regulated by OCC to the appropriate regulator. OCC plans 

to begin expanding the CAG’s telephone hours of operation after vendor 

selection and training is completed.

Conclusions Overall, OCC’s consumer complaint handling operations appear to be inline with practices of other regulators, with OCC handling a larger volume 

of complaints than the other bank regulators, likely reflecting its position 

as the supervisor of banks that account for the majority of the nation’s bank 

assets. A significant portion of OCC’s and other regulators’ work involves 

providing or clarifying information for bank customers who have questions 

and/or have misunderstood a bank product or service. Officials from all 

four regulators said that assisting consumers through the complaint 

process is an important part of their efforts to educate consumers about 

financial products and services. Two of the federal bank regulators collect 

some feedback from consumers who make complaints or inquiries; OCC 

does not. In contrast, OCC does seek feedback from banks after every 

examination, through a survey. Given that part of OCC’s mission is to 

ensure that consumers of national banks’ products and services are treated 

fairly and have fair access to financial services, obtaining feedback from 

bank customers who contact CAG should be useful in improving both its 

service to customers and helping banks to do likewise. Moreover, federal 

standards reflected in GPRA require that government agencies measure 

their progress toward goals, including those related to serving the public. 

OCC measures its timeliness in serving consumers with complaints and 

34Over the same 18-month period, calls from Spanish-speaking customers represented 1.9 

percent of total call volume. According to OCC officials, the CAG telephone system retains 

data only for the most recent 18-month period. Therefore, as of December 2005, data were 

not available on wait times prior to June 2004.
Page 32 GAO-06-293 OCC Preemption - Consumer Issues

inquiries as one indicator of its performance and discloses the results in 

reports that are publicly available. However, because those reports 

combine data on complaints and data on inquiries—which are questions or 

comments that are subject to an immediate, simple answer and typically 

require less time to handle—they overstate OCC’s performance in meeting 

its timeliness goal for resolving actual complaints.

OCC appears to make appropriate use of the data CAG collects and 

analyzes by informing banks about their performance in relation to 

consumer complaints and by using the data to inform its examination and 

supervisory activities. CAG’s analysis of complaint data is presented to 

bank officials annually and used to identify any concerns. OCC examiners 

reported CAG data as useful tools in scoping examinations and in assessing 

areas of risk. We documented instances when examiners’ audit plans were 

influenced by information from CAG. We also identified instances when 

information gathered from CAG complaints and additional research by 

supervisory staff contributed to the development of supervision policies 

and guidance.

The concerns expressed by a broad range of consumer advocates and state 

officials indicate some uneven understanding of OCC’s process for 

handling consumer complaints, possibly contributing to the lack of trust 

that the agency will be aggressive in protecting consumers’ interests. 

Because these concerns may inhibit state officials or consumer advocates 

from sharing information with or referring consumer complaints to OCC, 

they could adversely affect the agency’s effectiveness in regulating banks 

or assisting bank customers who have complaints. Consumer advocates 

and others are concerned about CAG’s centralized location and its capacity 

to handle complaints particularly if the volume of complaints should 

increase. Recent efforts such as outreach to the Better Business Bureaus 

and development of a revised brochure for consumers regarding CAG are 

appropriate steps designed to better inform the public of its process and 

services. However, the distribution plans for the brochure focus on the 

banks and rely on them to share the brochure with bank customers, if the 

banks wish. Given that the former Comptroller has acknowledged that 

OCC and state officials “have a mutual interest in ensuring that consumers 

are protected from illegal, predatory, unfair, or deceptive practices,” it is 

essential that OCC undertakes outreach to key state partners—regulators 

and consumer advocates—in a manner that effectively and efficiently 

informs the public, and especially customers of national banks, about what 

CAG does and how state officials and OCC can work together to protect 

consumers. Such efforts cannot only raise awareness among the states 
Page 33 GAO-06-293 OCC Preemption - Consumer Issues

about OCC’s efforts and capabilities to assist consumers, it might help allay 

the suspicion and mistrust we identified and construct a path for better 

cooperation between OCC, state officials, and consumer advocates in the 

future. 

Recommendations To identify ways to improve its process for handling consumer complaints 

and inquiries and its efforts to better inform, educate, and serve bank 

customers, we recommend that the Comptroller of the Currency take the 

following three actions: 

• Develop and implement a feedback mechanism to receive input and 

measure satisfaction of bank customers who have used CAG services. 

• Revise the data publicly reported on timeliness to reflect complaints 

resolved within the 60-day goal separately from data reported on 

inquiries resolved within the time frame.

• Develop and implement a comprehensive plan to inform bank 

customers, consumer advocates, state attorneys general, and other 

appropriate entities of OCC’s role in handling consumer inquiries or 

complaints about national banks. The plan could include such steps as 

directly distributing an informational brochure to some bank customers 

and meeting with state and local consumer advocates and appropriate 

state officials to describe OCC’s role and processes for assisting bank 

customers and others who raise consumer protection concerns.

Agency Comments and 

Our Evaluation

We obtained written comments on a draft of this report from the 

Comptroller of the Currency; they are presented in appendix II. OCC 

generally concurred with the report and agreed with our three 

recommendations. Specifically, OCC stated that a broader comparison of 

consumer protection activities, including those of state agencies, would 

have provided a clearer picture of protections available to consumers, but 

it acknowledged that such a comparison was beyond the scope of our 

report. Regarding the recommendations, OCC said it will develop and 

implement a customer feedback mechanism to receive input and measure 

satisfaction of those who have used CAG services. OCC also agreed to 

revise the data that it publicly reports on timeliness to reflect complaints 

resolved within the 60-day goal separately from data reported on inquiries. 

Finally, OCC acknowledged that state officials may not be aware that it 
Page 34 GAO-06-293 OCC Preemption - Consumer Issues

does have some practices currently in place to inform state officials of the 

outcome of consumer complaints, and therefore it will undertake 

additional outreach to state agencies to make them aware of those options. 

Therefore, OCC agreed with our recommendation that it develop and 

implement a comprehensive plan to inform bank customers, consumer 

advocates, state attorneys general, and other appropriate entities of its role 

in handling consumer inquiries or complaints about national banks. OCC 

also provided technical comments that we have incorporated, as 

appropriate. 

As agreed with your office, unless you publicly announce the contents of 

this report earlier, we plan no further distribution of this report until 30 

days from the report date. At that time, we will provide copies of this report 

to the Comptroller of the Currency and interested congressional 

committees. We also will make copies available to others upon request. In 

addition, the report will be available at no charge on the GAO Web site at 

http://www.gao.gov.

If you or your staff have any questions concerning this report, please 

contact me at (202) 512-8678 or woodd@gao.gov. Contact points for our 

Offices of Congressional Relations and Public Affairs may be found on the 

last page of this report. Key contributors are acknowledged in appendix III.

David G. Wood

Director, Financial Markets and

Community Investment
Page 35 GAO-06-293 OCC Preemption - Consumer Issues

Appendix I

Scope and Methodology AAppenednxidexiIs

To describe how the Office of the Comptroller of the Currency (OCC) 

handles consumer complaints and to compare how its process compares 

with that of other bank regulators, we interviewed officials in OCC’s 

Customer Assistance Group (CAG), as well as their relevant counterparts 

at the Federal Reserve, Federal Deposit Insurance Corporation (FDIC), and 

Office of Thrift Supervision (OTS). We visited the CAG office in Houston, 

Texas, and observed its work, including a review of 18 closed cases to learn 

what information CAG collects from complaints.1

 In addition, we reviewed 

CAG’s policies and procedures that relate to consumer complaint 

processing. 

To describe how the four regulators resolve the complaints they handle, we 

requested complaint data for calendar years 2000 through 2004.2

Specifically, we obtained information about the source and resolution 

(outcomes) of complaints, the banking products or services involved, and 

the amount of time the regulators took to resolve them. The data came 

from four different databases: (1) OCC’s REMEDY database, (2) the 

Federal Reserve’s Complaint Analysis Evaluation System and Reports 

(CAESAR), (3) FDIC’s Specialized Tracking and Reporting System 

(STARS), and (4) OTS’ Consumer Complaint System (CCS). We obtained 

data from OCC, the Federal Reserve, FDIC, and OTS in September 2005 

that covered calendar years 2000 through 2004. For purposes of this report, 

we sought to use REMEDY, CAESAR, STARS, and CCS data to describe the 

number of cases each regulator handled, what products consumers 

complained about, how the regulators disposed of complaints, the number 

of complaints and inquiries the regulators forwarded to other federal 

agencies, and how long it took the regulators to resolve complaints. To 

assess the reliability of data from the four databases, we reviewed relevant 

documentation and interviewed agency officials. We also had the agencies 

produce the queries or data extracts they used to generate the data we 

requested. Also, we reviewed the related queries, data extracts, and the 

output for logical consistency. We determined these data to be sufficiently 

reliable for use in our report. 

1

Our sample was a nonprobability sample, so our results cannot be used to make inferences 

about the population. In a nonprobability sample, some elements of the population being 

studied have no chance or an unknown chance of being selected for the sample. 

2

To determine the total amount of assets under supervision for each regulator, as well as, 

assets under supervision related to credit cards, we also reviewed information from FDIC's 

Statistics on Depository Institutions for the period 2000 to 2004.
Appendix I

Scope and Methodology

Page 36 GAO-06-293 OCC Preemption - Consumer Issues

To make general comparisons about the source and resolution of 

complaints between the four regulators, we created categories that include 

all of the codes each regulator used to describe the sources and resolutions 

of complaints. Officials of the Federal Reserve, FDIC, OTS and OCC agreed 

with our categorization of their respective source and resolution codes. 

The source categories were “consumer,” “federal,” “state,” and “other.” The 

resolution categories consisted of (1) regulators provide consumers 

additional information, (2) complaint is withdrawn or tabled due to 

litigation, (3) regulators determine that bank was not in error, and (4) 

regulators determine that bank was in error. Using the codes, we sorted 

each of the regulators’ complaints and tallied the number of complaints 

that fell into each category. We also sorted the complaints by codes 

indicating the type of bank product or service and confirmed for certain 

products, such as credit cards, that the codes represented the entire 

universe of complaints about the product. To describe how long it takes to 

resolve a complaint, we requested from each regulator a frequency count of 

how many complaints were resolved within and over 60 days.

To describe how CAG’s efforts related to OCC’s supervision of national 

banks, we interviewed OCC officials and reviewed related documents 

about how consumer complaint data influence bank examinations and 

guidance. We interviewed CAG officials and examiners at six national 

banks concerning how CAG shares consumer complaint information and 

how information is used by bank examiners. In addition, we interviewed 

bank officials to learn what information CAG provides the banks and how 

banks use the information. 

To identify issues raised by consumer advocates and state officials, we 

conducted site visits in four states: California, Georgia, New York, and 

North Carolina. The site visits included interviews of state attorneys 

general, banking regulators, banking officials and local consumer advocate 

groups, as well as analysis of relevant documents. We also interviewed 

state officials in two additional states, Iowa and Idaho.3

 We selected these 

locations, in part, based on their experience with state consumer 

protection laws. In addition, we interviewed representatives of national 

consumer groups, including the Center for Responsible Lending, Consumer 

Federation of America, National Community Reinvestment Coalition, 

National Consumer Law Center, and Association of Community 

3

We reviewed general information from the six state banking regulators that we interviewed 

about how their respective agencies handle consumer complaints. 
Appendix I

Scope and Methodology

Page 37 GAO-06-293 OCC Preemption - Consumer Issues

Organizations for Reform Now. Also, we interviewed representatives of 

national trade groups for state officials in Washington, D.C., including the 

Conference of State Bank Supervisors and the National Association of 

Attorneys General. 

We conducted our work in California, Georgia, New York, North Carolina, 

Texas, and Washington, D.C., from October 2004 through December 2005 in 

accordance with generally accepted government auditing standards. 
Page 38 GAO-06-293 OCC Preemption - Consumer Issues

Appendix II

Comments from the Office of the Comptroller 

of the Currency ApendxiI
Appendix II

Comments from the Office of the Comptroller 

of the Currency 

Page 39 GAO-06-293 OCC Preemption - Consumer Issues
Appendix II

Comments from the Office of the Comptroller 

of the Currency 

Page 40 GAO-06-293 OCC Preemption - Consumer Issues
Page 41 GAO-06-293 OCC Preemption - Consumer Issues

Appendix III

GAO Contact and Staff Acknowledgments ApendxiI

GAO Contact David G. Wood (202) 512-8678

Staff 

Acknowledgments

In addition to those named above, Katie Harris (Assistant Director), Nancy 

Eibeck, Jamila Jones, Landis Lindsey, James McDermott, Kristeen McLain, 

Suen-Yi Meng, Marc Molino, David Pittman, Barbara Roesmann, Paul 

Thompson, and Mijo Vodopic made key contributions to this report.

(250226)
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