OCC Consumer Assistance: Process Is Similar to That of Other Regulators but Could Be Improved by Enhanced Outreach
Published: 2006-02-23T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: 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.
section_title: What GAO Found
paragraphs: 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 consumer-related 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.

section_title: Letter
paragraphs: 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) 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 National Bank Act, the Congress created OCC to supervise national banks.   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. 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  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.
subsections: section_title: Background
paragraphs: 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.
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,  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. 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. 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 certain types of state laws that are not preempted. 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.
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  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.
section_title: OCC’s Handling of Consumer Complaints Is Similar to That of Other Regulators
paragraphs: 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  complaints in determining whether it met its timeliness goals, OCC  overstated its performance on these goals.
subsections: section_title: OCC and Other Federal Regulators Follow the Same General Process in Resolving Consumer Complaints
paragraphs: All four federal regulators we reviewed take similar approaches in  processing consumer complaints about banks they supervise. 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.
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. 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—CAGNet—that permits it and  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. 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.
section_title: OCC Does Not Seek Feedback from Consumers on Services Provided
paragraphs: 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.
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). 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.
section_title: Outcomes of Complaints Handled by All of the Federal Regulators Fall into the Same General Categories
paragraphs: 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, (3) finding that the bank had not made an error, and (4) finding that the  bank had made an error.
subsections: section_title: Regulators Provided Consumers Additional Information
paragraphs: 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).
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  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. 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,  during this same period, referred approximately 38 percent of its callers  to another federal agency.
section_title: Complaint Is Considered Withdrawn or Tabled Due to Litigation
paragraphs: For OCC, the second most frequent type of complaint resolution was  “withdrawn” or “complaint in litigation,” while it was the least common  for the Federal Reserve and OTS and the third most common for FDIC.  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. 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  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.
section_title: Regulators Determine That Bank Was Not in Error
paragraphs: 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.
section_title: Regulators Determine That Bank Was in Error
paragraphs: “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.
section_title: OCC Handles a Greater Volume of Complaints Than the Other Bank Regulators
paragraphs: 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 supervision, while FDIC averaged 6 complaints, the Federal Reserve 3  complaints, and OTS 5 complaints (see fig. 3).
From 2000 through 2004, credit cards were the most common product  involved in complaints addressed by OCC, FDIC, and the Federal Reserve.  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  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. 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.
section_title: Federal Regulators Have Similar Timeliness Goals, but OCC Overstated Its Timeliness in Resolving Complaints by Including Inquiries in Its Calculation
paragraphs: 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.
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.
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.
section_title: CAG’s Consumer Complaint Data Inform OCC’s Bank Supervisory Activities
paragraphs: 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.OCC 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  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 risks posed to them by engaging third-party vendors for products and  services linked to the credit cards that banks issue.
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.
section_title: Despite OCC Efforts, State Officials and Consumer Advocates Still Have Concerns About OCC’s Commitment and Capacity to Address Consumer Complaints
paragraphs: 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  some steps to provide flexibility in operations to meet any upcoming  increases in demand for its services.
subsections: section_title: While State Officials and Advocates We Contacted Remain Concerned About OCC’s Commitment to Consumer Protection, Some Were Unaware of Its Consumer Protection Efforts
paragraphs: 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.  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  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. 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. For example, in November 2004, senior CAG officials met with  one state attorney general’s office to demonstrate how OCC handles  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.
section_title: State Officials View OCC’s Efforts to Share Information About Complaint Outcomes as Unsatisfactory
paragraphs: 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. “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. “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.
section_title: Others Raise Concerns About CAG’s Centralized Operations, Although OCC Cites Advantages
paragraphs: 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, during Hurricane Rita in September 2005, telephones were not staffed for 4  days at CAG, due to the evacuation of Houston. 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.
section_title: Some Groups and Officials Have Concerns About Complaint Handling Capacity, and OCC Plans to Increase Capacity
paragraphs: 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,  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. CAG officials believe that the conversion from state  charters to federal charters of two large banks in 2004 accounts for the  increase. 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, between June 2004 and November 2005, CAG met this goal, although wait  times generally were longer for Spanish speaking services. 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.
section_title: Conclusions
paragraphs: Overall, OCC’s consumer complaint handling operations appear to be in- line 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  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  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.
section_title: Recommendations
paragraphs: 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.
section_title: Agency Comments and Our Evaluation
paragraphs: 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  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.
section_title: Scope and Methodology
paragraphs: 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. 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.  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.
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. 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  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.
section_title: Comments from the Office of the Comptroller of the Currency
section_title: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: 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.