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. 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. 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. Unlike two of the federal regulators, OCC lacks a process for  collecting feedback from consumers it assists. The  regulators define their role as a neutral arbiter between consumers and the  banks they regulate when processing complaints. OCC aims to resolve complaints within 60 days. 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. 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. OCC also uses consumer complaint data collected by CAG to formulate  guidance for national banks. 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. Some officials were unaware of CAG’s process for  handling consumer complaints; however, OCC recently took steps to  publicize its customer assistance function. 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. 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. 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. 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).
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.