MINNEAPOLIS, Minn.-Credit unions need to pay close attention to member complaints, cautions Wolters Kluwer, as the Consumer Financial Protection Bureau is stepping up its focus here, looking for signs from consumers that their FI is engaging in unfair or deceptive practices.
Under the Unfair, Deceptive or Abusive Acts or Practices (UDAAP) Act, the CFPB has the ability to address those issues across the board among all financial institutions, said Senior Attorney Ted Dreyer. "The CFPB has had some big judgments against major financial institutions already."
Dreyer said a big way the agency will determine if an FI is doing something unfair, deceptive or abusive is by looking at complaints made against the institution.
"If the complaints are about deception or things of that nature, especially if there are repeated complaints about the same issue of business area, that might be considered something examiners will be told to look at for UDAAP violations."
According to Dreyer, CUs should quickly and appropriately respond to complaints made about their services, particularly ones that involve claims of deception. "Make sure there are not patterns out there, for example, that might have an examiner saying. 'I see a lot of people saying your ads are misleading.'"
'Possible Enforcement Action'
Complaints can come to the CFPB from many avenues, said Dreyer, including directly to the agency, through state and federal regulators or attorney general offices. "If the CFPB sees a problem they will pass it on to the NCUA for possible enforcement action. If the institution is on its toes, is aware of complaints against the organization, responds to them quickly, and generally keeps an eye on complaints, it can help avoid complaints from turning into real problems."
It's not a bad idea, too, to follow feedback the credit union receives via social media, advised Dreyer. "If someone is saying bad things about the credit union on social media sites, it's likely the person will be making a complaint. You could head that problem off before it happens."