Independent Banker - July 2017 - 59

includes a responsive and responsible
process for handling consumer complaints
and inquiries. Regulatory
agencies expect the intelligence gathered
from consumer complaints to be
organized, retained and used as part of
an institution's CMS.
A quick look at the examination
procedures reveals that every
aspect of the regulators' evaluation
of a bank's CMS is at least in
part evaluated from the financial
institution's ability to effectively
manage the complaint process,
including data from third-party
vendors. Complaints received by or
through third parties for accounts,
products or practices conducted for
or provided on behalf of a financial
institution are the responsibility of
the financial institution.
The bigger picture
Another good reason to be proactive
about tracking and managing
complaints is that it just makes good
business sense. " Sometimes we get
caught up in the compliance silo of
meeting regulatory process technicalities,
and we miss the bigger picture
of the internal strategic value, " says
Boccia. " It's important for each community
bank to come back to its core
strategy and to integrate compliance
throughout the institution at every
level, as opposed to treating compliance
as a separate dynamic.
" Complaint management really
is the business of everyone in the
organization and facilitated by the
compliance officer, from the top
to the bottom, throughout every
department, " she continues. " A community
bank's business is based on
interaction with consumers and small
businesses, and its basic core strategy
is to attend to those customers' needs.
Paying attention to the feedback they
are giving you, which might likely
come in the form of a complaint, just
makes good business sense. "
Organic complaint data are valuable
tools to help guide and improve
the CMS and business practices.
Banks can go a step further by using
publicly available data and trend
analysis, like that portrayed in the
CFPB's Consumer Response Annual
Report, published in March 2017 for
calendar year 2016.
Of the complaints the CFPB
handled in 2016, the top category
was debt collection. More detailed
data underlying each complaint
category, like the types of debt and
types of debt collection activities,
are also reported. Ask yourself:
How similar are the complaints and
inquiries your bank receives to those
of other financial institutions and, if
they are similar, have you employed
" Complaints can really
be the 'canary in the
coal mine.' A complaint
is often the first
indicator that there
is something wrong
somewhere. "
-BARBARA BOCCIA,
WOLTERS KLUWER
appropriate, effective measures to
meet regulatory scrutiny? What
types of complaints and inquiries are
other financial institutions receiving
that are not reflected in your bank's
complaint records, and do you need
to evaluate those areas to address any
gaps or other risks? Could there be a
breakdown in the process preventing
your bank from identifying or recording
those types of complaints?
Through the grapevine
While complaint data may be introduced
in writing, many times they
come from customer-facing employees.
Written complaints are easier to
capture and track than the more elusive
verbal ones, so community banks
must clearly define for employees
what will be considered complaints.
Will they be written, or both written
and verbal? Will they include inquiries
and reports of errors? Banks must
clearly communicate the steps that
employees are expected to take when
presented with written or verbal
complaints and inquiries.
" Community banks must solidify an
overall method to define complaints,
organize them, respond to them,
retain the information and analyze it, "
Boccia advises. " It is critical to consistently
and accurately categorize the
buckets complaints fall into. "
A complaint about fees and categorized
as a " fee complaint " could
be founded in the amount of the fee
relative to the product or market, but
it could also originate from a glitch in
the system causing double charging
of fees or not removing fees when
required. Analysis may show that
the issue appears to more frequently
affect customers of protected classes
or vulnerable populations, such as
senior citizens or students, and could
indicate a fair-lending problem or
an issue of the Unfair, Deceptive, or
Abusive Acts or Practices (UDAAP)
Act for vulnerable populations.
Handling the complaint process
appropriately requires robust
analysis of the complaints and their
elements to accurately determine the
scope and impact.
" Complaints can really be the
'canary in the coal mine,' " Boccia says.
" A complaint is often the first indicator
that there is something wrong
somewhere. It could be a system
error, training shortfall, breakdown
http://www.qmags.com/clickthrough.asp?url=www.independentbanker.org&id=20303&adid=P59E1
Independent Banker - July 2017

Table of Contents for the Digital Edition of Independent Banker - July 2017
