NEW YORK - By yearend, a better-trained exam force will result in tougher compliance exams and more enforcement actions from the Federal Deposit Insurance Corp.
Barbara Monheit, deputy general counsel at the FDIC's New York office, told a conference last week that the agency's reviews will become more sophisticated by December when training of its new compliance examiners is completed. Ms. Monheit also said she has spotted several new compliance problems at banks.
"You've got a little window period here - get your house in order," she warned at the Strategic Research Institute's compliance conference here last week.
Noting that the FDIC's compliance exams will stress fair lending, she suggested that bankers self-test for discrimination by analyzing loan files and policies. The FDIC's Washington office is now testing software that will measure fair-lending compliance.
Many bankers, she said, aren't sure what to do once they find evidence of discrimination.
"What you do when you catch it is fix it," she said. Examiners will eventually find problems, and the bank will be in a better position if it has already confronted them, she said.
Because the FDIC's New York regional office gets more than half of all customer complaints, Ms. Monheit said, she has noticed some new trends in noncompliance.
Credit cards are another potential fair-lending problem, Ms. Monheit said. When a bank gets a list of potential customers from a credit bureau, it is required to offer credit to everyone on that list, she said. A bank can offer different lines of credit depending on the applicant, but it cannot make a particular income level a prerequisite for qualification.
Banks also are sending too many unsolicited credit cards through the mail, Ms. Monheit said. She suspects the problem may be caused by telemarketers' falsely claiming to have sold cards to customers who actually have refused them.
A separate area with a growing number of complaints is the Electronic Funds Transfer Act, implemented by Reg E. Customers are complaining that money is mysteriously disappearing from their accounts, Ms. Monheit said. "We've seen enough of these now that we think it's a bank security issue," Ms. Monheit said.
Banks should respond to complaints with a full-blown investigation, she said. Don't just send the FDIC the same letter the bank sent to the customer, Ms. Monheit advised. Instead, she said, assign an objective person - not a banker already involved - to investigate the case.
