OIG report says FDIC consumer complaint processing ‘substantially’ compliant, but notes exceptions

An inspector general report on Federal Deposit Insurance Corp. (FDIC) consumer complaint processing found the agency “substantially complied” with key program equirements, but required information was omitted from recommendation memoranda in some cases while in others processing times exceeded the set processing timeframe. In one case, processing took nearly 17 months.

The FDIC Office of Inspector General (OIG) conducted a review of 60 complaint cases for its evaluation and reviewed the FDIC’s case processing times during the three-year period from 2015 to 2017. The cases evaluated included 22 that were classified as “fair lending” (alleging possible discrimination under the Fair Housing Act or Equal Credit Opportunity Act), with the rest classified as “non-fair lending.”

Consumer complaints received by the FDIC Division of Depositor and Consumer Protection (DCP). The OIG’s objectives for this report were to (1) assess DCP’s compliance with key requirements related to its processing of consumer complaints and (2) determine DCP’s use of consumer complaint information and trends data in its operations.

Findings in the May report included the following:

  • 32 case processing exceptions. These primarily involved instances when FDIC did not include all required information in recommendation memorandums, which document its review of fair lending cases and recommendations to conduct or waive on-site investigations at subject banks.
  • Too-lengthy case processing times in 45% percent of the sampled fair lending cases. The case processing timeframe for such cases is 120 days, but for these cases processing took an average of 284 days. Five of the cases took more than 300 days to process (one of these took 506 days, or nearly 17 months). The OIG also said the agency did not process 45 percent of its fair lending cases from 2015 through 2017 in a timely manner.
  • Too-lengthy case processing times in 11% of non-fair lending cases. The case processing time for such cases is 60 days. “Notably however, FDIC processed 95 percent of its Non-Fair Lending cases within 60 days from 2015 through 2017,” the report says.
  • FDIC personnel used consumer complaint information and trends data in operations, including during pre-examination planning processes and in follow-up, when warranted, during exams.

As to documentation and processing timeframes, the OIG says the DCP has agreed to take recommended corrective actions by June 30.

Last year, FDIC finalized 82 fair lending complaints and 3,907 non-fair lending complaints.

Report: Processing of Consumer Complaints (FDIC OIG)