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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: 

[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-06-293]: 

GAO Highlights: 

Highlights of GAO-06-293, a report to the Subcommittee on Oversight and 
Investigations, Committee on Financial Services, House of 
Representatives: 

Why GAO Did This Study: 

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 Found: 

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. 

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. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

OCC's Handling of Consumer Complaints Is Similar to That of Other 
Regulators: 

CAG's Consumer Complaint Data Inform OCC's Bank Supervisory Activities: 

Despite OCC Efforts, State Officials and Consumer Advocates Still Have 
Concerns About OCC's Commitment and Capacity to Address Consumer 
Complaints: 

Conclusions: 

Recommendations: 

Agency Comments and Our Evaluation: 

Appendixes: 

Appendix I: Scope and Methodology: 

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

Appendix III: GAO Contact and Staff Acknowledgments: 

Figures: 

Figure 1: Consumer Complaint Processes of Selected Banking Regulators: 

Figure 2: Complaint Resolutions of Selected Federal Regulators: 

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

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: 

Letter February 23, 2006: 

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)[Footnote 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 National Bank Act, the Congress created OCC to 
supervise national banks.[Footnote 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.[Footnote 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 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 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 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 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.[Footnote 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, 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.[Footnote 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.[Footnote 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 certain types of state 
laws that are not preempted.[Footnote 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.[Footnote 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 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 
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.[Footnote 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. 

Figure 1: Consumer Complaint Processes of Selected Banking Regulators: 

[See PDF for image] 

[End of figure] 

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.[Footnote 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--CAGNet[Footnote 11]--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.[Footnote 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.[Footnote 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. 

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

Figure 2: Complaint Resolutions of Selected Federal Regulators: 

[See PDF for image] 

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

[End of figure] 

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.[Footnote 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, during this same period, 
referred approximately 38 percent of its callers to another federal 
agency.[Footnote 17] 

Complaint Is Considered Withdrawn or Tabled Due to Litigation: 

For OCC, the second most frequent type of complaint resolution was 
"withdrawn"[Footnote 18] or "complaint in litigation," while it was the 
least common for the Federal Reserve and OTS and the third most common 
for FDIC.[Footnote 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.[Footnote 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 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 supervision, while FDIC averaged 6 complaints, the Federal 
Reserve 3 complaints, and OTS 5 complaints (see fig. 3).[Footnote 21] 

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

[See PDF for image] 

[End of figure] 

From 2000 through 2004, credit cards were the most common product 
involved in complaints addressed by OCC, FDIC, and the Federal 
Reserve.[Footnote 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 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.[Footnote 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.[Footnote 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. 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. 
[Footnote 25]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.[Footnote 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 some steps to provide 
flexibility in operations to meet any upcoming increases in demand for 
its services.[Footnote 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.[Footnote 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 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.[Footnote 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.[Footnote 30] 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. 

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. 

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 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, 

during Hurricane Rita in September 2005, telephones were not staffed 
for 4 days at CAG, due to the evacuation of Houston.[Footnote 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, 
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.[Footnote 32] CAG officials 
believe that the conversion from state charters to federal charters of 
two large banks in 2004 accounts for the increase.[Footnote 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, between June 2004 and November 2005, CAG met 
this goal, although wait times generally were longer for Spanish 
speaking services.[Footnote 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 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. 

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 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 [Hyperlink, http://www.gao.gov]. 

If you or your staff have any questions concerning this report, please 
contact me at (202) 512-8678 or [Hyperlink, 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. 

Signed by: 

David G. Wood: 
Director, Financial Markets and Community Investment: 

[End of section] 

Appendixes: 

Appendix I: Scope and Methodology: 

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.[Footnote 
35] 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.[Footnote 36] 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.[Footnote 37] 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. 

[End of section] 

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

Comptroller of the Currency: 
Administrator of National Banks: 
Washington, DC 20219: 

January 27, 2006: 

Mr. Dave G. Wood: 
Director, Financial Markets and Community Investment: 
United States Government Accountability Office: 
Washington, DC 20548: 

Dear Mr. Wood: 

We have received and reviewed your draft report titled "OCC Consumer 
Assistance: Process Is Similar to That of Other Regulators, But Could 
Be Improved by Enhanced Outreach." The OCC's issuance of final 
regulations setting forth standards for determining when state laws can 
be applied to the operations of national banks (preemption), and 
clarifying the respective roles of federal and state authorities in 
overseeing the activities of those institutions (visitorial powers) 
prompted a Congressional request for your review in response, to 
concerns expressed by some state officials and consumer groups about a 
perceived loss of consumer protection. The requesters asked you to 
evaluate the OCC's process and capacity for providing assistance to 
consumers. 

You concluded and are reporting that: (1) the OCC's handling of 
consumer complaints is similar to that of other regulators; (2) the 
Customer Assistance Group's (CAG) consumer complaint data informs OCC's 
bank supervisory activities; and (3) despite OCC efforts, state 
officials and consumer advocates still have concerns about OCC's 
commitment and capacity to address consumer complaints. 

As we previously conveyed in our comments on the draft report, given 
the genesis of the request for GAO review, we wished that your analysis 
could have encompassed the state agencies that have registered concerns 
about the OCC. While we recognize that such a comparison was beyond the 
scope of your project, comparing the OCC's consumer protection 
activities and resources to those of the full range of agencies and 
entities involved in this area would have provided a clearer and more 
complete picture of the protections available to consumers nationally. 
Even within the limited focus on Federal agencies, extending your 
comparison beyond routine processing to value-added uses of complaint 
information would have provided a more complete context for evaluating 
the OCC's performance. While we are proud of the performance of OCC's 
CAG, we are always looking to improve our performance. A better 
understanding of state and Federal capabilities would help to further 
strengthen our own consumer protection activities and mesh them more 
effectively with services provided by others. 

Service to and Feedback from Consumers: 

Your report provides a positive assessment of the OCC's complaint 
handling process. Nevertheless, we would like to emphasize that our 
assistance to consumers is more than our CAG handling complaints. We 
take a holistic approach that, we believe, sets us apart from the other 
federal regulators with whom we are compared. First and foremost, the 
information that we glean from providing service to individual 
customers of national banks and their subsidiaries is integrated into 
the supervisory process. Not only do examiners use the information to 
set the scope of their examinations and to evaluate banking practices, 
but the information is shared with the institutions to encourage them 
to provide better service to their customers at the time of product 
delivery and in resolving any disputes or concerns that may arise. The 
service that we provide also extends to the operating subsidiaries of 
national banks. We accept and resolve complaints from consumers about 
their transactions with institutions that are currently national banks 
and their subsidiaries regardless of the entities' status at the time 
the transaction at issue occurred. 

You observed that the OCC does not have a formal mechanism for 
assessing consumer satisfaction with our services. We accept your 
recommendation to develop and implement a feedback mechanism to receive 
input and measure satisfaction of bank customers who have used CAG 
services. Not only will such a survey add value to our process by 
providing us another opportunity to have a dialog with consumers, but 
also their feedback will prompt us to make improvements to our process. 

Informing Others: 

Your report is helpful in pointing out specific areas where state 
governmental entities and consumers may not be aware of our efforts or 
have misperceptions about them. We are committed not only to clearing 
up misperceptions but to reporting correct information and sharing 
information with the states. We will take the steps you recommend to 
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 timeframe. 

As you point out, it has been our practice to share information 
concerning the outcome of consumers' complaints with state entities 
when asked. When a state agency forwards a complaint to the OCC and 
requests either a copy of the OCC's response to the consumer or to know 
the result, we provide a copy of our letter or follow up with a phone 
call to the state. Because some states may not be aware that we do 
this, we will undertake additional outreach to state agencies to make 
them aware of this option. We also will again encourage state agencies 
to enter into memoranda of understanding that would facilitate broader 
information sharing. As you report, we revised the draft memorandum of 
understanding in an effort to address concerns raised by states 
concerning a previous draft; however, despite our efforts to address 
those concerns, only one agreement has been formalized. 

Accordingly, your recommendation that we 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 is 
entirely appropriate. 

We appreciate the opportunity to comment on the draft report and to 
reaffirm our commitment to providing superior service to consumers. 

Sincerely, 

Signed by: 

John C. Dugan: 
Comptroller of the Currency: 

[End of section] 

Appendix III: GAO Contact and Staff Acknowledgments: 

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): 

FOOTNOTES 

[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. 

[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). 

[4] OCC also supervises federal branches and agencies of foreign banks. 

[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). 

[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). 

[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. 

[10] Federal 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. 

[11] CAGNet 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. 

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

[13] If 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. 

[14] GPRA 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. 

[15] In 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. 

[16] Of 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. 

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

[18] Instances in which the regulator determined the complaint to be 
withdrawn does not necessarily mean that the consumer withdrew the 
complaint. 

[19] This resolution category was on average about 3 percent for 
Federal Reserve and OTS, and about 9 percent for FDIC, from 2000 
through 2004. 

[20] This practice is shared by the Federal Reserve, FDIC, and OTS. 

[21] In 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. 

[22] Credit 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. 

[23] By the end of 2004, OCC had under its supervision banks that 
accounted for nearly 67 percent of all assets held in commercial banks. 

[24] To collect comparable data from all four federal regulators, we 
requested the data by calendar year. 

[25] Two OCC booklets from the Comptroller's Handbook establish the 
agency's general examination policies and procedures: Community Bank 
Supervision and Large Bank Supervision. 

[26] The 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. 

[27] Our 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. 

[28] GAO-06-08. 

[29] Better 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. 

[30] In 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. 

[31] According 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. 

[32] The 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. 

[33] During 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. 

[34] Over 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. 

[35] 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. 

[36] 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. 

[37] We reviewed general information from the six state banking 
regulators that we interviewed about how their respective agencies 
handle consumer complaints. 

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