Wednesday, December 12, 2007
(Washington, DC) —Consumer groups today called on Congress to establish a single toll-free number and unified complaint system that makes it easier for consumers to complain about their bank. In testimony before the U.S. House Subcommittee on Financial Institutions and Consumer Credit, Consumers Union and Consumer Federation of America endorsed the Financial Consumer Hotline Act of 2007, which establishes a single toll-free bank complaint hotline, and proposed additional improvements that will give consumers more relief.
Five different federal agencies oversee national and state-chartered banks, savings and loans, and federal credit unions, each with their own complaint system. There is no single web site, toll free number, or even paper forms that consumers can use to complain to any of these agencies regardless of where they do their banking.
“To most consumers, a bank is a bank,” said Jeannine Kenney, Senior Policy Analyst for Consumers Union. “Consumers should not need to wind though a byzantine maze of federal regulators in order to get the help they need. When it is too hard to complain, not only are consumers left without recourse, but regulators don’t get a clear picture about what is going wrong in the marketplace,” added Kenney.
Four of the five federal financial services regulatory agencies reported nearly 43,000 consumer complaints (excluding inquiries) in 2006, the most recent year for which numbers are available. Kenney recommended that, in addition to the toll free hotline, the agencies develop, a seamless, uniform complaint system with a single website and complaint process.”
“But even the best consumer complaint system won’t provide consumers with redress if Congress and regulators don’t provide consumers with better protections,” Kenney warned. “It won’t stop excessive hold times on deposits, egregious overdraft loan fees, and unfair credit card rates and terms – practices that the law now allows.”
“To make real progress in protecting consumers from the worst abuses, financial regulators must abandon the proposition that more and better disclosure can solve the problems caused by complex financial products and adopt more stringent regulations to prevent them,” added Kenney.
To see a copy of the written testimony, click here.
Contact:
Jennifer Fuson 202-462-6262
Travis Plunkett 202-387-6121