Posts tagged ‘complaints’

In Albany, The More Things Change The More They Stay The Same

Image result for simcha felder

By winning two special elections last night for vacant State Senate seats combined with the recent dissolution of the Democratic Independent Caucus, the Democrats now have a numeric majority in the New York State Senate. This is a big deal. With the exception of short stints in 2008 and 1965, the Republicans have controlled the State Senate since World War II.

In addition, the fact that the Republicans lost decisively in the special election in Westchester where Democrat Shelley Mayer will now serve out the remainder of that Senate term, is a sure sign that State Senate Republicans may very well pay a hefty price for the Trump Presidency. When I started working in the State Senate in 1989, the general rule of thumb was that national politics didn’t really have too much of an impact on the State Senate. Clearly this is no longer true.

Now for the good news if you’re a Republican. Despite this historic election, not all that much has changed this morning. That’s because Simcha Felder who runs on the Democratic and Republican line has indicated that he is going to continue to support the Republicans at least until the end of session. Stay tuned, this is a story that will be playing out at least through November and one that which will have a huge impact on the shapes and prospects for the credit union legislative agenda for years to come.

By the way, a special thanks to all of you who took the time to show up in Albany for our annual State GAC event. It’s always great to see all of you who make the extra effort to help out with the cause.

Mulvaney To Shut Down Public Complaint Portal

Since its inception in 2014, yours truly has been a vocal critic of CFPB’s public complaint portal under which complaints lodged against financial institutions are available for public review. Talk about guilty until proven innocent.

In the latest example of his efforts to fundamentally reform the Bureau of which he is head, Acting Director Mick Mulvaney indicated in a speech before the American Bankers Association yesterday that he whole-heartedly agrees with me. The American Banker quotes him as saying, “I don’t see anything in here that says I have to make all of this public. We are going to maintain the consumer database. It is mandated by law,” but “I don’t see anything in here that I have to run a Yelp for financial services sponsored by the federal government.” His comments come as the CFPB has made a request for the public to comment on CFPB’s existing public complaint process.

Enjoy your day.

April 25, 2018 at 8:58 am Leave a comment

CFPB’s publication of narratives is a Bad idea

Those wacky kids at the CFPB are out it again. This time they want to go Wiki leaks with consumer complaints.  They are proposing that the CFPB’s consumer complaint database be expanded to include consumer narratives of complaints consumers agree to publicize. The allegedly offending company would be given the option of responding with its own competing narrative. According to the CFPB,  publishing narratives would “be impactful by making the complaint data personal (the powerful first person voice of the consumer talking about their experience), local (the ability for local stakeholders to highlight consumer experiences in their community), and empowering (by encouraging similarly situated consumers to speak up and be heard)” Let Freedom Ring!

Cut through the hyperbole and what you are left with is a debate about the value of empowerment of which I am proudly on the losing  side. Amazon just celebrated its twentieth anniversary and, in addition to providing us books and consumer goods with great service at a lower price, it gave us the consumer narrative review. I have never used one of the narratives to buy anything of value. Given the choice I will look at Consumer Reports before I buy a TV or read a book review written by an expert when deciding what to read next. To me these are more reliable than on someone so enamored or annoyed about a product or service that they actually took the time to sit down and write a review. The internet indeed can “empower” anyone to think they are an expert but that doesn’t make them one..

But I am a dinosaur . More and more people are as likely to get their news from Facebook as from the New York Times. The whole idea of an information hierarchy is viewed with suspicion. What is the big deal they say? After all if someone doesn’t find an internet review-or an association blog for that matter -credible than they can just ignore it. They can just ignore a complaint they find on the CFPB’s website.

The problem is that the mere fact the complaint is on a government database is going to be giving complaints much more credence than they deserve.  I was against the CFPB granting public access to its credit card complaint data base because I believe that the CFPB has an obligation to investigate complaints before throwing them out to the general public. Unsubstantiated allegations can do a lot more harm than good.   A Government website isn’t a free market place of ideas. Unlike those reviews on Amazon it has the government’s imprimatur.            

Not to worry says the CFPB; the accused company will always have the right to respond. But responding takes time and resources and the mere fact that a response is made to an allegation doesn’t mean that the damage is undone. For instance let’s say someone accuses XYZ credit union of discrimination after being denied a car loan. Publishing a response that the member was subject to the same race neutral criteria as everyone else won’t undue the seriousness of the allegation.

CFPB should pull the plug on this idea but it won’t. Here is a compromise: Lets recognize that not all financial institutions have the time to respond to a consumer narrative or the resources it takes to martial an effective PR campaign against serious but unsubstantiated allegations. Let’s establish a threshold for company size below which the narrative won’t be made public. It will still be sent to the CFPB which can investigate it; it will still be sent to the institution for a response and the consumer will still have all the legal rights and remedies he has today but smaller institutions won’t have to choose between letting an allegation fester or engaging in a public dispute with a disgruntled consumer at the same time they are trying to run a business. Here is a link to the proposal Institutions have 30 days after publication to respond.

Click to access 201407_cfpb_proposed-policy_consumer-complaint-database.pdf

See you Monday

July 17, 2014 at 8:59 am 6 comments

Don’t Be Afraid To Question Your Examiner

NCUA’s Office of Inspector General recently released a report, produced at the request of the Chairman of the Senate Banking Committee, reviewing the examination and appeals process as it relates to small credit unions.  On balance, the report concludes that NCUA is doing a pretty good job of standardizing its examination process, ensuring that experienced examiners handle the most complex credit unions, working towards a more uniform application of NCUA regulations and giving credit unions the means to question examiner determinations.

Let’s face it:  examiners and credit unions will never see eye to eye on all issues and some of what I read in this report is, to put it mildly, inconsistent with what I hear at the Association.  But what the report drives home is that NCUA does have a process, albeit an imperfect one, to handle disputes regarding examiner findings.  Credit unions can’t be afraid to utilize the remedies  available to them.

For example, the Inspector General points out that “NCUA encourages examiners to discuss problems and/or conditions that impair or may impair the safety and soundness of the credit union with the appropriate credit union officials and employees throughout the examination.”

I know there are some of you who believe this is a naïve myth and you may be right.  But the first step in a successful mediation is to explain to the other side why you think they are wrong.

The report points out that NCUA has taken steps to nationalize its examination guidance.  After all, credit unions are entitled to have the law applied in a consistent and accurate manner.  Most examiners do this.  But to ensure that they are enforcing federal regulation as opposed to their own view of safety and soundness, it is perfectly acceptable to ask an examiner on what they are basing their conclusions.

I will continue to argue that an appeals process with a truly independent department to hear reviews is in the best interest of both the NCUA and credit unions.  It is in the best interest of NCUA because credit unions will see that many of its determinations are consistent with the law and regulations.  It is in the best interest of credit unions because for the appeals process to be truly effective, the arbitrator must be independent.  No one can be both judge and jury.

That being said the Inspector General was able to cobble together a number of complaints that made their way to the regional directors and making your case is not an exercise in futility.  According to the report an average of six complaints reach each regional director every year and 85% of the complaints are resolved in favor of the examiner.  There was surprising variation by region: Region II examiners apparently never make any mistakes while Region V’s director decided one out of every four disputes in favor of  credit unions.  Region I’s director, who oversees New York, decided 17% of disputes in favor of the credit union.  These are long odds, but they are not insurmountable and where you feel you have a legitimate gripe you should present your case.

September 11, 2012 at 7:29 am 2 comments

Authored By:

Henry Meier, Esq., Senior Vice President, General Counsel, New York Credit Union Association.

The views Henry expresses are Henry’s alone and do not necessarily reflect the views of the Association. In addition, although Henry strives to give his readers useful and accurate information on a broad range of subjects, many of which involve legal disputes, his views are not a substitute for legal advise from retained counsel.

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