[Federal Register Volume 88, Number 111 (Friday, June 9, 2023)]
[Notices]
[Pages 37917-37920]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-12301]


=======================================================================
-----------------------------------------------------------------------

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.

-----------------------------------------------------------------------

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:
     Federal eRulemaking Portal--Regulations.gov: Go to https://www.regulations.gov. 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 
Regulations.gov site, please call 1-866-498-2945 (toll free) Monday-
Friday, 9 a.m.-5 p.m. ET, or email [email protected].
     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.
     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

[[Page 37918]]

comments received into the docket and publish the comments on the 
Regulations.gov 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:
     Viewing Comments Electronically--Regulations.gov: Go to 
https://regulations.gov/. 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 Regulations.gov site, 
please call 1-866-498-2945 (toll free) Monday-Friday, 9 a.m.-5 p.m. ET, 
or email [email protected].
    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.
---------------------------------------------------------------------------

    \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: http://ideas.repec.org/p/eie/wpaper/1006.html.
    \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: http://www.jstor.org/stable/23245460.
---------------------------------------------------------------------------

    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\
---------------------------------------------------------------------------

    \3\ See for example, Xu, X. (2020) ``Trust and financial 
inclusion: A cross-country study.'' Finance Research Letters, 35, 
available at: https://www.sciencedirect.com/science/article/pii/S1544612319303915, 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: https://www.sciencedirect.com/science/article/pii/S1042957315000534.
    \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: https://ssrn.com/abstract=3339743 or http://dx.doi.org/10.2139/ssrn.3339743, and Miao 
J., Wang, P. (2015) ``Banking bubbles and financial crises.'' 
Journal of Economic Theory, 157: 763-792, available at: https://www.sciencedirect.com/science/article/pii/S002205311500037X.
---------------------------------------------------------------------------

    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

[[Page 37919]]

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.
---------------------------------------------------------------------------

    \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 https://doi.org/10.1108/IJQSS-10-2019-0120; Ennew, C.T. and 
Sekhon, H. (2007), ``Measuring trust in financial services: the 
Trust Index.'' Consumer Policy Review, 17(2): 62-68, available at 
https://www.researchgate.net/publication/285769675_Measuring_trust_in_financial_services_the_Trust_Index; 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: https://doi.org/10.1108/02652321011013580.
---------------------------------------------------------------------------

     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\
---------------------------------------------------------------------------

    \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: https://doi.org/10.1108/IJQSS-10-2019-0120.
---------------------------------------------------------------------------

     Goodwill can refer to the financial institution's 
responsiveness and empathy for the customer's needs and welfare.\7\
---------------------------------------------------------------------------

    \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: https://doi.org/10.1108/IMDS-09-2014-0262.
---------------------------------------------------------------------------

     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\
---------------------------------------------------------------------------

    \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: https://doi.org/10.1108/IJBM-12-2015-0195.
---------------------------------------------------------------------------

     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\
---------------------------------------------------------------------------

    \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: https://doi.org/10.1108/02652321011013580.
---------------------------------------------------------------------------

    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).
---------------------------------------------------------------------------

    \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: http://dx.doi.org/10.2139/ssrn.3677835.
---------------------------------------------------------------------------

    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'

[[Page 37920]]

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