A Note from the Editors
In 2023, the Federal Reserve System (System) received 6,012 complaints for the institutions under its supervisory authority. The System mines the data for various purposes, including:
- determining the scope of future System examinations of the institutions listed in the complaints based on the compliance risk and volume of complaints;
- initiating a target examination if the data suggest systemic violations causing significant harm;
- identifying emerging compliance risks; and
- selecting topics for internal examiner training and external outreach.
Mining data to inform decision-making can be an important tool for financial institutions. For example, some lenders analyze applicants’ financial account transaction data to inform their credit decisions.
Institutions can similarly mine their customer complaint data to help them assess the compliance risk of their products and services and to enhance their compliance management system (CMS). For example, if an institution launches a new product or service for which it receives a high number of similar complaints, it can investigate the root cause and respond appropriately.
The effectiveness of a complaint management program can also affect an institution’s compliance rating. The Uniform Interagency Consumer Compliance Rating System specifically considers an institution’s “consumer complaint response” as one of the rating factors.1
To underscore the importance of a complaint management program in an effective CMS, Consumer Compliance Outlook is devoting this issue to complaints. We hope you find this special issue informative.
181 FR 79473, 79478, 79483 (November 14, 2016); see also Consumer Affairs letter 16-8, “Uniform Interagency Consumer Compliance Rating System”(November 22, 2016).