An Audit Report on the Office of Consumer Credit Commissioner
September 2008
Report Number 09-003
Overall Conclusion
The Office of Consumer Credit Commissioner (Office) provides reasonable assurance that lenders comply with state and federal statutes and rules when providing loans and services to Texans by examining financial transactions, resolving complaints, and conducting investigations. The Office's examination process ensures the regulatory compliance of licensees. The Office has well documented policies and uses a risk-based process to schedule examinations. However, the Office could strengthen its procedures for the submission and processing of examination reports, and it could take steps to ensure that all examination reports receive a supervisory review in a timely manner.
The Office's complaint resolution process complies with its policies and procedures and most regulatory best practices. This includes complaints that are escalated to investigations. However, the Office could improve its process by allowing consumers to call in complaints after business hours. In addition, the Office could improve its review of complaint information and its process for addressing complaints that are open for more than 90 days.
Since fiscal year 2003, the Office has licensed motor vehicle sales finance dealers (dealers) that issue credit. The Office adequately regulates these dealers by accepting and resolving complaints, performing examinations, and conducting investigations. In addition, the Office actively seeks out non-licensed dealers to bring them into compliance with state and federal regulations.
The Office adequately gathers most of the required documentation to process dealer applications. However, the Office licensed some license applicants without receiving criminal history check results from the Federal Bureau of Investigation (FBI), as required by the Texas Administrative Code. The Office does not consistently receive this information because the FBI or the Department of Public Safety (DPS) rejects submitted fingerprint cards due to the poor quality of the fingerprints submitted by the license applicants. The Office also is not receiving continuous background check information on licensees for whom submitted fingerprint cards have been rejected. DPS estimates that there is a 25 percent rejection rate for traditional ink cards.
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