Components of a Strong Complaint Management Program

Posted on January 05, 2023

Author: Maria Coppinger-Peters, CRCM - Senior Consultant RAS/RISC Services

People love to complain about banks. Only 32% of Americans have “a great deal” or “quite a lot of” confidence in banks, according to a 2018 Gallup poll. We want to help you turn that around. We will discuss the components of a strong complaint management program, including key elements such as management and board oversight. We’ll also cover some best practices in handling complaint, to keep you out of hot water.

Defining a Complaint

So, what exactly is a complaint? How does it differ from an inquiry?

A complaint is a claim by, or for, an individual, group of individuals or another entity that a particular act or practice of a financial institution is unfair, deceptive, incorrect or violates a federal regulation or statute under which the financial institution operates.

By contrast, an inquiry is a request to the financial institution, from consumers, for clarification, information, and assistance.

Both must be addressed, usually, in writing. While complaints are typically more formal and require a resolution of a concern or issue, an inquiry may only require an explanation of the issue or clarify a question.

Many regulations contain prescribed time frames for responding to complaints and for inquiries. If the applicable regulation does not contain a prescribed time frame, implementing a policy to reply in less than 10 business days would be prudent.  

Complaint Management Programs

A Complaint Management Program is now a requirement for most, if not all financial institutions. During your examination, examiners will request your program, and review both your complaints and inquiries and your prompt responses. The types of complaints that examiners look at include gender/racial discrimination, UDAAPs, violations of law, Regulation E errors, FCRA disputes and fair lending complaints, as well as credit card and loan billing and timing of the crediting of payments complaints.

So, you need a strong, effective Complaint Management Program with Board and Senior Management approval and buy-in. Both elements will demonstrate to the examiners that Board and Management are engaged and aware of the importance of a strong Complaint Management Program.

All Complaint Management Programs should have a designated individual responsible for managing and overseeing the program to ensure centralization, and trust me, keeping it centralized keeps it organized. The designee should have sufficient authority to oversee the delegation of complaints and coordinated response for the appropriate senior management party overseeing the complaint or department. Although this can be assigned to someone within their department, it is ultimately the managers decision and responsibility. Appropriate accountability at all levels is also extremely important.

Another key component of a Complaint Management Program is a log, which at a minimum should contain:

  • Date of Complaint or Inquiry
  • Complainant or Inquirer Name
  • Brief description of the complaint or inquiry
  • The person assigned to respond
  • The date the response is received for review
  • The date of management approval and mailing (or emailing)
  • Indicate direct or agency indirect channel
  • Results from the financial institution’s mitigation review, if applicable.

A copy of the complaint/inquiry as well as the management response should be saved either manually or electronically, as long as it is easy to retrieve.

Take note of the types of complaints. If you note trends or complaints specific to a product or service, you may want to review that product or service and see if it could be confusing enough to cause a complaint. Patterns and trends should always be analyzed or reviewed.

Complaints routed via your Regulator

Complaints received from your prudential regulator are the same as direct consumer complaints. Each agency has their own method of handling and distributing complaint to the financial institution; check your regulator’s website for information.  Normally, the letter sent with the complaint includes instructions on how to proceed.

Log these complaints and resolution with the direct complaints in the aforementioned log.

CRA Complaints

CRA Complaints have an extra step, as along with management as a complaint, these complaints must also be kept in your CRA Public File. We recommend that document these complaints both in an internal complaint file and your CRA Public file.

Senior Management and Board Reporting

As stated earlier, we cannot stress enough how important it is to keep your Senior Management and Board of Directors apprised of complaints. We recommend at least quarterly, that the Complaint Program Manager prepare a brief report summarizing complaints and inquiries received for the quarter for Management/Board review. This report should include information on resolution, accountability, and analysis.

How Regulatory Advisory Services Can Help

Regulatory Advisory Services (RAS) members have access to our Complaint Analyzer Tool, which provides a venue to review and respond to complaints within regulatory time periods. This useful tool addresses compliance with Regulation E error resolution and remittance transfer errors, CRA complaints, Regulation Z Open-end credit billing errors and credit card disputes, RESPA qualified written requests, and FCRA disputes.    To take advantage of a 30-day free trial allowing you access to this tool, or if you want to learn more about Regulatory Advisory Services other tools and services, contact us at  Current members can submit a ticket within the client portal if you have any questions regarding complaint response   ( ).

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