Notice2023-12301
Request for Information on Annual Consumer Trust in Banking Survey
Primary source
Metadata and text below are from the Federal Register, a public-domain U.S. government work. Always verify the official published version before relying on it for any legal matter.
Published
June 9, 2023
Issuing agencies
Treasury DepartmentComptroller of the Currency
Abstract
The OCC is gathering information and comments to inform the development of an annual survey to understand consumer trust in banking and bank supervision that the agency plans to develop and implement, as discussed in the OCC's Strategic Plan for 2023-2027. The purpose of this request for information (RFI) is to solicit input to maximize the value and use of any survey. Specifically, the RFI seeks comments on the scope of the survey, components and drivers of trust, and ways to track and analyze trust over time.
Full Text
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<title>Federal Register, Volume 88 Issue 111 (Friday, June 9, 2023)</title>
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[Federal Register Volume 88, Number 111 (Friday, June 9, 2023)]
[Notices]
[Pages 37917-37920]
From the Federal Register Online via the Government Publishing Office [<a href="http://www.gpo.gov">www.gpo.gov</a>]
[FR Doc No: 2023-12301]
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DEPARTMENT OF THE TREASURY
Office of the Comptroller of the Currency
[Docket ID OCC-2023-0003]
Request for Information on Annual Consumer Trust in Banking
Survey
AGENCY: Office of the Comptroller of the Currency (OCC), Treasury.
ACTION: Request for information and comment.
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SUMMARY: The OCC is gathering information and comments to inform the
development of an annual survey to understand consumer trust in banking
and bank supervision that the agency plans to develop and implement, as
discussed in the OCC's Strategic Plan for 2023-2027. The purpose of
this request for information (RFI) is to solicit input to maximize the
value and use of any survey. Specifically, the RFI seeks comments on
the scope of the survey, components and drivers of trust, and ways to
track and analyze trust over time.
DATES: Comments must be received on or before October 10, 2023.
ADDRESSES: Commenters are encouraged to submit comments through the
Federal eRulemaking Portal. Please use the title ``Consumer Trust in
Banking Survey Request for Information'' to facilitate the organization
and distribution of the comments. You may submit comments by any of the
following methods:
<bullet> Federal eRulemaking Portal--<a href="http://Regulations.gov">Regulations.gov</a>: Go to <a href="https://www.regulations.gov">https://www.regulations.gov</a>. Enter ``Docket ID OCC-2023-0003'' in the Search
Box and click ``Search.'' Public comments can be submitted via the
``Comment'' box below the displayed document information or by clicking
on the document title and then clicking the ``Comment'' box on the top-
left side of the screen. For help with submitting effective comments,
please click on ``Commenter's Checklist.'' For assistance with the
<a href="http://Regulations.gov">Regulations.gov</a> site, please call 1-866-498-2945 (toll free) Monday-
Friday, 9 a.m.-5 p.m. ET, or email <a href="/cdn-cgi/l/email-protection#a6d4c3c1d3cac7d2cfc9c8d5cec3cad6c2c3d5cde6c1d5c788c1c9d0"><span class="__cf_email__" data-cfemail="a7d5c2c0d2cbc6d3cec8c9d4cfc2cbd7c3c2d4cce7c0d4c689c0c8d1">[email protected]</span></a>.
<bullet> Mail: Chief Counsel's Office, Attention: Comment
Processing, Office of the Comptroller of the Currency, 400 7th Street
SW, Suite 3E-218, Washington, DC 20219.
<bullet> Hand Delivery/Courier: 400 7th Street SW, Suite 3E-218,
Washington, DC 20219.
Instructions: You must include ``OCC'' as the agency name and
``Docket ID OCC-2023-0003'' in your comment. In general, the OCC will
enter all
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comments received into the docket and publish the comments on the
<a href="http://Regulations.gov">Regulations.gov</a> website without change, including any business or
personal information provided such as name and address information,
email addresses, or phone numbers. Comments received, including
attachments and other supporting materials, are part of the public
record and subject to public disclosure. Do not include any information
in your comment or supporting materials that you consider confidential
or inappropriate for public disclosure.
You may review comments and other related materials that pertain to
this action by the following method:
<bullet> Viewing Comments Electronically--<a href="http://Regulations.gov">Regulations.gov</a>: Go to
<a href="https://regulations.gov/">https://regulations.gov/</a>. Enter ``Docket ID OCC-2023-0003'' in the
Search Box and click ``Search.'' Click on the ``Documents'' tab and
then the document's title. After clicking the document's title, click
the ``Browse Comments'' tab. Comments can be viewed and filtered by
clicking on the ``Sort By'' drop-down on the right side of the screen
or the ``Refine Results'' options on the left side of the screen.
Supporting materials can be viewed by clicking on the ``Documents'' tab
and filtered by clicking on the ``Sort By'' drop-down on the right side
of the screen or the ``Refine Documents Results'' options on the left
side of the screen. For assistance with the <a href="http://Regulations.gov">Regulations.gov</a> site,
please call 1-866-498-2945 (toll free) Monday-Friday, 9 a.m.-5 p.m. ET,
or email <a href="/cdn-cgi/l/email-protection#7c0e191b09101d081513120f1419100c18190f173c1b0f1d521b130a"><span class="__cf_email__" data-cfemail="1e6c7b796b727f6a7771706d767b726e7a7b6d755e796d7f30797168">[email protected]</span></a>.
The docket may be viewed after the close of the comment period in
the same manner as during the comment period.
FOR FURTHER INFORMATION CONTACT: Chau Do (Deputy Comptroller for
Economics and Risk Analysis in Supervision Risk and Analysis), (202)
649-5550. If you are deaf, hard of hearing, or have a speech
disability, please dial 7-1-1 to access telecommunications relay
services.
SUPPLEMENTARY INFORMATION:
Background Information
The OCC, as the federal regulator for national banks, federal
savings associations, and federal branches and agencies of foreign
banking organizations (collectively, ``national banks''), is committed
to its mission of ensuring that the institutions it supervises operate
in a safe and sound manner, provide fair access to financial services,
treat customers fairly, and comply with applicable laws and
regulations. While other types of banks have other federal and/or state
regulators, the OCC recognizes that an effective supervisory framework
across federal and state regulators can support a strong and fair
banking system, which enables individuals, communities, and the U.S.
economy to thrive. The public's trust in banks is an important aspect
of a thriving and stable banking system. Without trust, banks cannot
attract or retain customers, including depositors, or meet the credit
needs of the communities they serve.
The safety and soundness of banks can clearly impact consumer's
trust in them. Recent events and the 2008 financial crisis have
underscored the importance of trust in banking and the role banks play
in economic growth. For instance, following the collapse of Lehman
Brothers in 2008, people who lost trust in their bank were more than
four times more likely to withdraw deposits from their bank than those
who retained full trust.\1\ Furthermore, the effects of lost trust in
banks can be long lasting. Research suggests that in circumstances
where there were bank runs, the aggregate level of deposits may not
return to pre-crisis levels.\2\ Such effects have implications for
banks' asset portfolios and loans and availability of credit to
borrowers.
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\1\ Guiso, L. (2010) ``A trust-driven financial crisis.
Implications for the future of financial markets.'' Einaudi
Institute for Economic and Finance Working Paper Series 1006,
available at: <a href="http://ideas.repec.org/p/eie/wpaper/1006.html">http://ideas.repec.org/p/eie/wpaper/1006.html</a>.
\2\ Iyer, R., & Puri, M. (2012). ``Understanding Bank Runs: The
Importance of Depositor-Bank Relationships and Networks,'' The
American Economic Review, 102(4): 1414-1445, available at: <a href="http://www.jstor.org/stable/23245460">http://www.jstor.org/stable/23245460</a>.
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The fairness of banks' products and services and banks' compliance
with laws and regulations can also impact consumers' trust in banks.
Discrimination on a prohibited basis, deceptive or unfair practices,
and fraud are examples of practices that erode trust in banking. They
may reflect weak controls and can suggest a disproportionate
prioritization of profits over consumers or an indifference to certain
groups and communities.
Changes in trust in banks can also affect banks' earnings, funding
costs, business models, and safety and soundness. The reciprocal nature
of the relationship between trust and safety and soundness should make
consumer trust a key variable of interest to bank regulators. Moreover,
trust in banks can also impact financial inclusion \3\ and financial
stability.\4\
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\3\ See for example, Xu, X. (2020) ``Trust and financial
inclusion: A cross-country study.'' Finance Research Letters, 35,
available at: <a href="https://www.sciencedirect.com/science/article/pii/S1544612319303915">https://www.sciencedirect.com/science/article/pii/S1544612319303915</a>, and Allen, F., Demirguc-Kunt, A., Klapper, L.,
and Peria, M.S.M., (2016) ``The foundations of financial inclusion:
Understanding ownership and use of formal accounts.'' Journal of
Financial Intermediation, 27: 1-30, available at: <a href="https://www.sciencedirect.com/science/article/pii/S1042957315000534">https://www.sciencedirect.com/science/article/pii/S1042957315000534</a>.
\4\ See for example, Chernykh L., Davydov D., and Sihvonen J.,
(2019). ``Financial Stability and Public Confidence in Banks.''
BOFIT Discussion Paper No. 2/2019, available at: <a href="https://ssrn.com/abstract=3339743">https://ssrn.com/abstract=3339743</a> or <a href="http://dx.doi.org/10.2139/ssrn.3339743">http://dx.doi.org/10.2139/ssrn.3339743</a>, and Miao
J., Wang, P. (2015) ``Banking bubbles and financial crises.''
Journal of Economic Theory, 157: 763-792, available at: <a href="https://www.sciencedirect.com/science/article/pii/S002205311500037X">https://www.sciencedirect.com/science/article/pii/S002205311500037X</a>.
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For these reasons, as part of the OCC's efforts to safeguard the
public's trust in the federal banking system and contribute to a
federal banking system that is safe, sound, and fair, the OCC is
developing an annual consumer trust in banking survey with the goals of
understanding, measuring, and tracking the consumer trust in banking
and bank supervision over time. By surveying the public, the OCC could
identify area(s) where trust can be further enhanced. The results of
the proposed survey may complement existing sources of public and
supervisory information and provide additional insight into the many
aspects that are important to consider in working to maintain and
enhance consumer trust in banking and bank supervision. The OCC could
publish the main results of the annual survey in an OCC report to
inform policymakers, bankers, and researchers about the trends and
drivers of consumer trust in banking and bank supervision. Other more
detailed reports on specific trust topics may also be produced.
Request for Comment
In this RFI, the OCC is inviting interested members of the public,
including financial industry participants, other government agencies,
academic and research organizations, consumer advocacy and financial
education organizations, trade associations, and financial services
customers to comment on the possible scope of the survey, components
and drivers of trust, and ways to track and analyze trust over time.
Scope of Survey
Trust survey questions have generally been limited to assessing
customers' sentiment toward financial institutions or their level of
trust in the financial institution with which they have an account.
However, trust in financial
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institutions may differ based on customers' experiences with the
financial product sought or used (e.g., credit card, mortgage, demand
deposit account) or with the type of financial service providers (e.g.,
federally chartered depository institutions, state-chartered depository
institutions, credit unions, non-banks).
Question 1: Are there certain segments of the U.S. population
(e.g., geographic, unbanked, underbanked, demographic groups) that
should be targeted for inclusion to ensure survey participation is
sufficiently high to make generalized statements about those groups?
Are there specific types of questions that should be included for any
such targeted group?
Question 2: What are some of the key considerations in determining
whether the survey should focus solely on groups of potential bank
customers that have not been the subject of previous surveys, such as
(1) those who use wealth or asset management services or private
banking services; (2) those who regularly use overdraft products, small
dollar unsecured loans, remittances services, or low-cost deposit
accounts; or (3) small business owners? For example, what are the
benefits or drawbacks of focusing on segments of customers, and are
there certain types of questions that should be included in order to
maximize those benefits?
Question 3: Alternatively, what are some key considerations in
determining whether the survey respondents should be expansive to
reflect the general population? For example, what are the benefits or
drawbacks of surveying individuals, not limited to bank customers or
potential bank customers, and are there certain types of questions that
should be included in order to maximize those benefits?
Question 4: What are some of the key considerations in determining
whether the survey should include questions related to customers' use
of specific types of financial products or services such as mortgage
loans, credit cards, or overdrafts?
Question 5: What are the key considerations in asking respondents
to distinguish between different financial institutions (i.e.,
federally chartered depository institutions, state-chartered depository
institutions, credit unions, non-banks) providing financial services in
terms of their experience, perceptions, or trust?
Question 6: To what extent should the OCC consider conducting a
survey focused solely on federally chartered depository institutions?
Question 7: To what extent should the OCC consider conducting a
survey focused more broadly on banks (i.e., bank holding companies and
federally chartered and state- chartered depository institutions)?
Question 8: To what extent should the OCC consider conducting a
survey focused more broadly on banks and non-banks (e.g., fintech
firms) that provide financial services or products?
Components of Trust
Admittedly, consumer trust in the banking system is hard to
explicitly define since the public may have various issues in mind when
asked about their level of trust in financial institutions. Although
there is no clear consensus on all of the components of trust, research
\5\ has generally found that the following components influence a
customer's level of trust in a financial institution: competency,
goodwill, integrity, and transparency.
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\5\ See for example, Kidron, A. and Kreis, Y. (2020),
``Listening to bank customers: the meaning of trust.'' International
Journal of Quality and Service Sciences, 12(3): 355-370, available
at <a href="https://doi.org/10.1108/IJQSS-10-2019-0120">https://doi.org/10.1108/IJQSS-10-2019-0120</a>; Ennew, C.T. and
Sekhon, H. (2007), ``Measuring trust in financial services: the
Trust Index.'' Consumer Policy Review, 17(2): 62-68, available at
<a href="https://www.researchgate.net/publication/285769675_Measuring_trust_in_financial_services_the_Trust_Index">https://www.researchgate.net/publication/285769675_Measuring_trust_in_financial_services_the_Trust_Index</a>; and
Roy, S.K. and Shekhar, V. (2010), ``Dimensional hierarchy of
trustworthiness of financial service providers.'' International
Journal of Bank Marketing, 28(1): 47-64, available at: <a href="https://doi.org/10.1108/02652321011013580">https://doi.org/10.1108/02652321011013580</a>.
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<bullet> Competency can refer to the ability of the financial
institution to: (1) consistently provide financial services and
relevant information to assist customers with their decisions, (2)
promptly address problems and complaints, and (3) safeguard customer
information appropriately.\6\
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\6\ Kidron, A. and Kreis, Y. (2020), ``Listening to bank
customers: the meaning of trust.'' International Journal of Quality
and Service Sciences, 12(3): 355-370, available at: <a href="https://doi.org/10.1108/IJQSS-10-2019-0120">https://doi.org/10.1108/IJQSS-10-2019-0120</a>.
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<bullet> Goodwill can refer to the financial institution's
responsiveness and empathy for the customer's needs and welfare.\7\
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\7\ Yu, P.L., Balaji, M.S. and Khong, K.W. (2015), ``Building
trust in internet banking: a trustworthiness perspective.''
Industrial Management and Data Systems, 115(2): 235-252, available
at: <a href="https://doi.org/10.1108/IMDS-09-2014-0262">https://doi.org/10.1108/IMDS-09-2014-0262</a>.
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<bullet> Integrity can refer to whether the financial institution
treats customers in a fair and equal way and the financial institution
does not defraud consumers or misuse their private information.\8\
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\8\ van Esterik-Plasmeijer, P.W.J. and van Raaij, W.F. (2017),
``Banking system trust, bank trust, and bank loyalty.''
International Journal of Bank Marketing, 35(1): 97-111, available
at: <a href="https://doi.org/10.1108/IJBM-12-2015-0195">https://doi.org/10.1108/IJBM-12-2015-0195</a>.
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<bullet> Transparency can refer to whether the financial
institution provides clear communication and the disclosure of the
relevant information to enable customers' understanding of the benefits
and costs associated with a financial product or service.\9\
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\9\ Roy, S.K. and Shekhar, V. (2010), ``Dimensional hierarchy of
trustworthiness of financial service providers.'' International
Journal of Bank Marketing, 28(1): 47-64, available at: <a href="https://doi.org/10.1108/02652321011013580">https://doi.org/10.1108/02652321011013580</a>.
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Question 9: Are the definitions above of the components of trust
useful and appropriate? If not, what modifications should be
considered?
Question 10: Are the components of trust comprehensive? If not,
what additional components should be considered?
Question 11: Are some components of trust superfluous? Which ones
are not necessary?
Question 12: How important is it to differentiate among the
components of trust?
Question 13: Does the relative importance differ depending on the
type or size of the financial institution or the financial services or
products customers use, or the specific segment of the population?
Measuring and Tracking Trust
Surveys may be designed to either directly measure trust (e.g.,
rank level of trust from 1-5) or indirectly, by inferring trust from
reported behaviors (e.g., closing a bank account, switching financial
institutions). Additionally, in measuring trust in financial
institutions, it may be important to distinguish between broad scope
trust (system-level trust in financial institutions) and narrow scope
trust (trust in one's own financial institution) and identify the
various drivers that influence the public's level of trust. Research
\10\ suggests there are four important drivers that may affect
customers' trust in financial institutions: (1) economic factors (e.g.,
unemployment rate, financial crisis), (2) direct personal experience,
(e.g., quality of financial services delivered), (3) customers'
personal characteristics (e.g., financial literacy, demographic
characteristics, economic and political views), and (4) government
oversight and policy measures (e.g., financial regulators, laws,
government).
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\10\ See, for example: van der Cruijsen, C., de Haan, J., and
Roerink, R. (2020), ``Trust in Financial Institutions: A Survey.''
De Nederlandsche Bank Working Paper No. 693, available at: <a href="http://dx.doi.org/10.2139/ssrn.3677835">http://dx.doi.org/10.2139/ssrn.3677835</a>.
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Question 14: What are some of the key considerations in determining
whether the survey should include questions aimed to measure and
monitor trust in financial institutions (i.e., system-level), and/or
questions focused on customers'
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level of trust in the financial institution with which they have an
account?
Question 15: To what extent should trust survey measurements be
based on direct and/or indirect measures (as described above)?
Question 16: Do the drivers of trust listed above comprehensively
identify key factors in measuring and tracking trust in financial
institutions over time? If not, what other drivers could be used?
Question 17: How important is understanding the drivers of trust in
developing a trust measurement for financial institutions?
Question 18: What are some of the key factors to consider in
developing survey questions that capture how personal characteristics
influence trust in financial institutions?
Question 19: What are some of the key factors to consider in
creating survey questions to capture how trust in bank regulators
influence customers' trust in banks?
Question 20: What are some of the key factors to consider in
creating survey questions to capture how trust in the government
influence customers' trust in financial institutions?
Question 21: What are the key advantages and disadvantages of
having a single banking regulator conducting the survey? To what extent
should the OCC consider alternative approaches, such as conducting a
joint survey with one or more other federal bank regulators?
(Authority: 12 U.S.C. 1)
Michael J. Hsu,
Acting Comptroller of the Currency.
[FR Doc. 2023-12301 Filed 6-8-23; 8:45 am]
BILLING CODE 4810-33-P
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