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Show Notes: FDIC Consumer Compliance Supervisory Highlights - July 2025

Episode Summary

In this episode, we break down the FDIC's latest Consumer Compliance Supervisory Highlights report, covering 2024 examination results and compliance trends. While focused on FDIC-supervised institutions, this principle-based guidance serves as an excellent roadmap for credit unions and all financial institutions.

Key Takeaways

Overall Performance

• 97% of FDIC-supervised institutions rated satisfactory or better for consumer compliance
• 800 consumer compliance examinations conducted in 2024
• Risk-focused examination approach targets areas with greatest potential for consumer harm

Top 5 Most Cited Violations (73% of all violations)

1. Truth in Lending Act (TILA) - 470 violations (37%)
   • Periodic statement disclosure failures
   • Good faith estimate timing issues
   • Loan cost breakdown requirements
2. Flood Disaster Protection Act (FDPA) - 143 violations (11%)
   • Failure to provide required flood insurance
   • 45% of FDPA violations related to this single issue
3. Truth in Savings Act (TISA) - 129 violations (10%)
   • Inadequate deposit account disclosures
   • Pre-opening disclosure failures
4. Electronic Fund Transfer Act (EFTA) - 122 violations (10%)
   • Error investigation procedure failures
   • Timing and reporting requirement violations
5. Home Mortgage Disclosure Act (HMDA) - 65 violations (5%)
   • Incomplete data collection and reporting
   • Missing required borrower and loan information

Enforcement Actions & Restitution

• 31 formal and 23 informal enforcement actions
• $5.6 million in civil money penalties
• $33.3 million in voluntary restitution to ~400,000 consumers
• 3 referrals to Department of Justice for discrimination violations

Consumer Complaint Trends

• 26,451 complaints closed (14% increase from 2023)
• 100% acknowledgment within 14 days
• 98.6% response rate within performance goals

Top Complaint Categories:

• Credit cards: 4,733 complaints (29%)
• Checking accounts: 3,152 complaints (19%)
• Installment loans/CLOC: 2,708 complaints (12%)
• Residential real estate: 844 complaints (5%)

Most Common Issues:

• Credit reporting disputes (18%)
• Transaction errors (9%)
• Accounts opened without knowledge (6%)
• Disclosure problems (6%)
• Service availability issues (5%)

Emerging Trends

• 13% increase in third-party provider-related complaints (4,282 cases)
• Growing vendor oversight challenges
• Persistent credit reporting and account opening issues
• Fair lending complaints decreased 9% (68 to 62 cases)

Key Compliance Areas for Focus

High-Risk Areas

• Disclosure Management: TILA, TISA, and HMDA reporting accuracy
• Operational Procedures: Flood insurance, error resolution processes
• Vendor Oversight: Third-party provider compliance monitoring
• Data Collection: HMDA and other regulatory reporting requirements

Proactive Strategies

• Implement robust disclosure review processes
• Enhance staff training on operational compliance
• Strengthen vendor management programs
• Monitor complaint trends as early warning indicators

Why This Matters for