Federal Deposit Insurance Corporation
Office of Inspector General
Federal Deposit Insurance Corporation - Office of Inspector General

Processing of Consumer Complaints

Wednesday, May 2, 2018

Processing of Consumer Complaints (EVAL-18-003)


The Federal Deposit Insurance Corporation (FDIC) plays an important role in helping to protect consumers from unfair and unlawful banking practices that could result in consumer harm.  In connection with that role, FDIC receives, investigates, and answers consumer complaints and inquiries.  On May 2, 2018, the FDIC Office of Inspector General (OIG) issued a report on the FDIC’s Processing of Consumer Complaints, in which we assessed FDIC’s compliance with key requirements and determined how FDIC used consumer complaint information and trends data in its operations.  

FDIC personnel categorize complaints in one of two ways:  “Fair Lending” complaints allege possible discrimination in lending under the Fair Housing Act or the Equal Credit Opportunity Act.  Complaints that do not meet this definition are considered “Non-Fair Lending” cases.  In 2017, FDIC finalized 82 Fair Lending complaints and 3,907 Non-Fair Lending complaints.

We reviewed 60 complaint cases (22 Fair Lending and 38 Non-Fair Lending cases).  We found that FDIC substantially complied with the key requirements to acknowledge, investigate, and respond to the complaints that we sampled.  However, we identified 32 case processing exceptions.  The exceptions primarily involved instances when FDIC did not include all required information in recommendation memorandums, which are prepared to document its review of Fair Lending cases and recommendations to conduct or waive on-site investigations at subject banks.

We also found that FDIC did not process 45 percent of the Fair Lending cases that we sampled in accordance with its case processing timeframe of 120 days.  FDIC took from 126 to 506 days to process the Fair Lending cases that we sampled, with an average processing time of 284 days – nearly 9½ months.  Five Fair Lending cases from our sample took more than 300 days for FDIC to process, with one of these cases taking nearly 17 months.  Similarly, FDIC did not process 45 percent of its Fair Lending cases over the 3-year period from 2015 through 2017 in a timely manner.  
As for Non-Fair Lending cases, we found that FDIC did not process 11 percent of the cases that we sampled in accordance with its case processing timeframe of 60 days.  Notably however, FDIC processed 95 percent of its Non-Fair Lending cases within 60 days from 2015 through 2017.

FDIC tracked consumer complaint issues, trends, and concerns, and FDIC senior management received monthly and quarterly reports on consumer complaint trends.  FDIC informed the OIG that examiners reviewed complaint documentation as part of their pre-examination planning processes and followed up on complaints during examinations, as warranted.

We made four recommendations to help ensure FDIC includes all required information in recommendation memorandums and to help improve the FDIC’s timeliness in processing Fair Lending cases. 

FDIC management concurred with our recommendations. 

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