USA TODAY International Edition
BANKS YOU GRIPE ABOUT MOST
Complaints run the gamut, and financial institutions say they are paying attention
You’re supposed to be able to trust your bank. But multimillion- dollar settlements, tens of thousands of customer complaints and class- action lawsuits make that tough.
Data show where the most complaints lie. Regions Financial ranks as the most complainedabout regional bank, and Comerica gets the most gripes among diversified banks relative to the value of their total deposit bases, according to a USA TODAY analysis of data through last week from the Consumer Financial Protection Bureau and S& P Global Market Intelligence. Regions received 16.6 complaints per billion dollars in customer deposits, and Comerica got 10.6.
By comparison, giant banks Bank of America and Wells Fargo lead in the absolute largest number of complaints entered in the CFPB system, with 11,666 and 10,773 complaints respectively, which accounted for 9.6 and 8.6 complaints per billion dollars in deposits. The analysis only looked at complaints associated with bank accounts or services. Complaints range dramatically, from disagreement over the size and appropriateness of fees to the way consumers feel they were treated by employees. All told, the 17 regional and diversified banks in the Standard & Poor’s index posted an average of 9.8 complaints per billion dollars in deposits. While the number of complaints is higher than banks would probably like, these levels are low enough to highlight the level of discontent doesn’t indicate a “huge problem,” says Jim Sinegal, banking analyst at Morningstar. “Ten complaints to $ 1 billion in deposits doesn’t seem like a huge problem.”
But complaints run deeper: uSecurities class- action lawsuits. The financial sector has been the No. 1 target of securities class- action lawsuits from 2001 to 2015, according to market research firm Cornerstone Research. On average, 9.3% of finan-
cial companies were subject to new class- action lawsuits, which tops the second- most sued sector, health care, at 8.6%.
uGovernment fines. Banks and other financial firms were responsible for half the cases and paid 90% of the penalties handed down by the Department of Justice and 14 regulatory agencies since 2010, corporate watchdog Good Jobs First says. From 2010 through June, U. S. and foreign banks paid $ 160 billion in penalties, with Bank of America paying $ 56 billion and JPMorgan Chase $ 28 billion. Only penalties of $ 100 million or more were included in the analysis.
The CFPB’s database of banking complaints dates to roughly 2012 as the government agency was commissioned in 2011 to be a watchdog for consumer protection in the financial sector. The agency was created out of regulation following the 2008 financial crisis and gained attention this month by hitting Wells Fargo with a multimillion- dollar fine following allegations bankers were secretly opening accounts under customers’ names.
There are caveats to the CFPB’s complaint data. Complaints can be entered into the system even if the items consumers are complaining about aren’t fraudulent, wrong or are even the result of their own mistakes. Comparing complaints to total deposits also makes global banks look better than regional ones because they do more investment banking, which doesn’t generate consumer complaints, Sinegal says. These complaints may also not include issues consumers enter directly at the bank’s website.
Banks say they are paying attention to the complaints.
“We pride ourselves in exceeding our customers’ expectation,” says Comerica bank spokesman Wayne Mielke. “We take all customer feedback very seriously.”
Says Regions spokeswoman Evelyn Mitchell: “Providing highquality service is a top priority. We are committed to promptly resolving any issues our customers bring to our attention,”
Given the massive size of markets banks play in, it’s natural to expect the penalties to be massive, says Robert Hockett, professor of law at Cornell Law School. The U. S. mortgage market, for instance, addresses the roughly $ 9 trillion housing market, which is bigger than any other asset class. Big markets generate large fines when there’s wrongdoing, he says. These companies are also among the biggest in the world, many that would rank among the largest nations in the world economically, Hockett says. That creates a challenge for management and regulators to track.
But given the size of these markets and the massive money to be made, fines aren’t much of a deterrent either, he says. “The fines paid are minuscule compared to the profits,” Hockett says. “Employees know the firm might pay a fine and jail time is unlikely, so they look at complaints and fines as the cost of doing business.”