March 15, 2011

Matz details OCP process on complaints

March 16, 2011 – NCUA Chairman Debbie Matz, writing to NAFCU President Fred Becker, said the agency Office of Consumer Protection encourages credit union members to work directly with their institutions to resolve complaints but that it will notify both parties if the credit union fails to take corrective action.

However, Matz said that in the vast majority of instances reviewed to date, the credit union's actions were permissible. "In fact, in many cases where the credit union was legally entitled to take the action it did (e.g., imposing an overdraft fee), the credit union has chosen to reverse its action as a goodwill gesture to its member," she wrote. "In conjunction with its goodwill gesture, the credit union often provides financial counseling to its member."

Becker wrote to Matz and Elizabeth Warren, the administration's lead on the Consumer Financial Protection Bureau, last week for clarification on how the two agencies will manage and resolve consumer complaints. In that letter, he made two requests:

  • that the agencies act in a way that does not increase a credit union's reputation risk, for example, by disclosing information without good reason; and
  • that they not act in a manner that raises the likelihood of lawsuits, such as by adjudicating a complaint rather than responding whether a violation has occurred or been resolved.

Matz, responding Monday, said the agency does occasionally see instances where a credit union has violated a consumer protection law or consumer compliance regulation. She said if the credit union resolves this, informs the member and makes the member whole, the OCP will confirm that with the member and close the complaint file. If no corrective action is taken and NCUA has enforcement authority, she said, "it is incumbent upon NCUA to notify both the credit union and its member accordingly."

She also noted that the OCP's role, when a violation has occurred, is to advocate for the credit union member.

"We appreciate NCUA's timely response," said Carrie Hunt, NAFCU's vice president of regulatory affairs, "but we do plan to continue our discussions with NCUA regarding these concerns."