Statement of Sandra L. Thompson, Director,
Division of Supervision and Consumer Protection;
Federal Deposit Insurance Corporation
on the Financial Consumer Hotline Act of 2007: Providing Consumers with Easy
Access to the Appropriate Banking Regulator
before the
Subcommittee on Financial Institutions and Consumer Credit of the Financial
Services Committee; U.S. House of Representatives;
2128 Rayburn House Office Building
December 12, 2007
Chair Maloney, Ranking Member Biggert and members of the Subcommittee, I
appreciate the opportunity to testify on behalf of the Federal Deposit Insurance
Corporation (FDIC) regarding proposed initiatives to make it easier for consumers to
contact regulatory agencies with complaints or inquiries about financial institutions.
The FDIC recognizes the importance of ensuring consumers have an effective method
for raising complaints about financial institutions and inquiries about other banking
matters. In addition to the need for consumers to have their concerns promptly and
thoroughly addressed, from the regulator standpoint, consumer complaints and inquiries
often provide insight into problems in individual insured financial institutions and
developing industry issues. Thus, it is to everyone's benefit that we make it as easy as
possible for consumers to contact the FDIC.
My testimony will describe the important role consumer complaints and inquiries play in
the FDIC's compliance examination process and the way consumer complaints and
inquiries are processed. I also will discuss current interagency efforts to improve
coordination of complaints among the federal banking agencies and the proposed
Financial Consumer Hotline Act of 2007.
The Importance of Consumer Complaints and Inquiries
Consumer complaints and inquiries play an important role in the development of strong
public and supervisory policy. Assessing and resolving these matters helps the FDIC:
• Identify trends or problems that may affect consumer rights;
• Understand the public perception of consumer protection issues;
• Formulate policy that aids consumers; and
• Foster confidence in the banking system by educating consumers about the
protection that they receive under certain consumer protection laws and
regulations.
Consumer complaints also play an important role in the FDIC's compliance examination
function. The FDIC is responsible for enforcing compliance with federal consumer
Division of Supervision and Consumer Protection;
Federal Deposit Insurance Corporation
on the Financial Consumer Hotline Act of 2007: Providing Consumers with Easy
Access to the Appropriate Banking Regulator
before the
Subcommittee on Financial Institutions and Consumer Credit of the Financial
Services Committee; U.S. House of Representatives;
2128 Rayburn House Office Building
December 12, 2007
Chair Maloney, Ranking Member Biggert and members of the Subcommittee, I
appreciate the opportunity to testify on behalf of the Federal Deposit Insurance
Corporation (FDIC) regarding proposed initiatives to make it easier for consumers to
contact regulatory agencies with complaints or inquiries about financial institutions.
The FDIC recognizes the importance of ensuring consumers have an effective method
for raising complaints about financial institutions and inquiries about other banking
matters. In addition to the need for consumers to have their concerns promptly and
thoroughly addressed, from the regulator standpoint, consumer complaints and inquiries
often provide insight into problems in individual insured financial institutions and
developing industry issues. Thus, it is to everyone's benefit that we make it as easy as
possible for consumers to contact the FDIC.
My testimony will describe the important role consumer complaints and inquiries play in
the FDIC's compliance examination process and the way consumer complaints and
inquiries are processed. I also will discuss current interagency efforts to improve
coordination of complaints among the federal banking agencies and the proposed
Financial Consumer Hotline Act of 2007.
The Importance of Consumer Complaints and Inquiries
Consumer complaints and inquiries play an important role in the development of strong
public and supervisory policy. Assessing and resolving these matters helps the FDIC:
• Identify trends or problems that may affect consumer rights;
• Understand the public perception of consumer protection issues;
• Formulate policy that aids consumers; and
• Foster confidence in the banking system by educating consumers about the
protection that they receive under certain consumer protection laws and
regulations.
Consumer complaints also play an important role in the FDIC's compliance examination
function. The FDIC is responsible for enforcing compliance with federal consumer
protection laws by the institutions it supervises. How a bank handles and responds to
consumer complaints is a key component of a well-managed compliance program.
A review of consumer complaints is part of the FDIC's pre-examination process for
every compliance examination we undertake. Complaints about particular practices
indicate areas to target for review. Consumer complaints may signal management or
structural deficiencies in financial institutions that are indicative of more systemic
problems within an institution. For these reasons, every FDIC compliance examination
of a financial institution includes a review of complaints against the institution and the
resolution of those complaints.
The FDIC consumer contact process contributes to other aspects of the FDIC mission
beyond consumer complaints. For example, following Hurricane Katrina, the FDIC Call
Center handled thousands of inquiries from consumers seeking information about their
banks and ways to access their bank accounts. We immediately established a 24-hour
consumer hotline to answer questions about contacting financial institutions, including
questions about accessing accounts, replacing lost records, obtaining replacement ATM
cards and processing direct deposit payments. The FDIC also updated its website with
information about financial institutions operating in the affected areas along with
customer service and branch contact information. The FDIC consistently emphasized
that deposit insurance remained in force, financial institution customers' money was
safe, cash was available, and consumers should be vigilant about the potential for theft
and scams. By serving as a clearinghouse for bank information, the FDIC assisted
thousands of consumers.
The consumer contact process also is vital in the event of a bank failure. The FDIC
provides a toll-free number and institution-specific information as a resource for
customers of failed banks seeking information about the insured status of their deposits
and any other issues that arise from the bank's failure. Depending on the size of the
bank, the FDIC can receive thousands of inquiries in the days following a bank closing.
Complaint Resolution and Inquiry Response
The FDIC receives consumer complaints and inquiries through several channels,
including constituent referrals from congressional offices. Consumers can contact the
FDIC through our website (www.fdic.gov) as well as through our toll-free phone number
(1-877-ASK FDIC), which is answered by our Call Center staff. Serving as the FDIC's
primary telephone point of contact for general questions from the banking community
and the public, the Call Center has received over 133,000 calls in 2007, exceeding the
111,000 received in 2006.
The Call Center reviews all routine questions about deposit insurance and other
consumer issues and concerns, as well as questions about FDIC programs and
activities. When the Call Center receives a consumer complaint about an FDIC-
supervised institution or a consumer protection inquiry requiring subject matter
expertise, the caller is connected to the FDIC's Consumer Response Center (CRC). The
CRC, staffed by consumer affairs specialists, investigates each complaint with the
consumer complaints is a key component of a well-managed compliance program.
A review of consumer complaints is part of the FDIC's pre-examination process for
every compliance examination we undertake. Complaints about particular practices
indicate areas to target for review. Consumer complaints may signal management or
structural deficiencies in financial institutions that are indicative of more systemic
problems within an institution. For these reasons, every FDIC compliance examination
of a financial institution includes a review of complaints against the institution and the
resolution of those complaints.
The FDIC consumer contact process contributes to other aspects of the FDIC mission
beyond consumer complaints. For example, following Hurricane Katrina, the FDIC Call
Center handled thousands of inquiries from consumers seeking information about their
banks and ways to access their bank accounts. We immediately established a 24-hour
consumer hotline to answer questions about contacting financial institutions, including
questions about accessing accounts, replacing lost records, obtaining replacement ATM
cards and processing direct deposit payments. The FDIC also updated its website with
information about financial institutions operating in the affected areas along with
customer service and branch contact information. The FDIC consistently emphasized
that deposit insurance remained in force, financial institution customers' money was
safe, cash was available, and consumers should be vigilant about the potential for theft
and scams. By serving as a clearinghouse for bank information, the FDIC assisted
thousands of consumers.
The consumer contact process also is vital in the event of a bank failure. The FDIC
provides a toll-free number and institution-specific information as a resource for
customers of failed banks seeking information about the insured status of their deposits
and any other issues that arise from the bank's failure. Depending on the size of the
bank, the FDIC can receive thousands of inquiries in the days following a bank closing.
Complaint Resolution and Inquiry Response
The FDIC receives consumer complaints and inquiries through several channels,
including constituent referrals from congressional offices. Consumers can contact the
FDIC through our website (www.fdic.gov) as well as through our toll-free phone number
(1-877-ASK FDIC), which is answered by our Call Center staff. Serving as the FDIC's
primary telephone point of contact for general questions from the banking community
and the public, the Call Center has received over 133,000 calls in 2007, exceeding the
111,000 received in 2006.
The Call Center reviews all routine questions about deposit insurance and other
consumer issues and concerns, as well as questions about FDIC programs and
activities. When the Call Center receives a consumer complaint about an FDIC-
supervised institution or a consumer protection inquiry requiring subject matter
expertise, the caller is connected to the FDIC's Consumer Response Center (CRC). The
CRC, staffed by consumer affairs specialists, investigates each complaint with the