WASHINGTON—The CFPB and four federal financial regulatory agencies, including NCUA, have issued guidance providing supervisory expectations on how financial institutions should handle consumer deposit discrepancies.
The interagency guidance states that banks and credit unions should avoid or reconcile, or resolve discrepancies between the amount they credit to a consumer’s account and how much was actually deposited. The guidance calls on banks and credit unions to adopt policies that treat consumers fairly when they make deposits and do not violate law.
“Consumers should not be denied timely access to the full amount of their deposits,” said CFPB Director Richard Cordray. “Today’s guidance should make it clear that we expect financial institutions to take steps to handle and resolve deposit discrepancies and avoid consumer harm.”
The CFPB noted deposit discrepancies can occur for several reasons, such as the amount written on a deposit slip does not match the cash transferred into the FI. In other instances, there might be encoding errors or a poor image capture by the bank/credit union when it scans or reads a deposit slip.
If a financial institution fails to comply with applicable laws and regulations, including prohibitions against unfair, deceptive, and abusive practices, it could open it up to liability and possible action by an agency, the CFPB warned.
The interagency guidance was issued by the Board of Governors of the Federal Reserve System, the FDIC, NCUA, the Office of the Comptroller (OCC) of the Currency, and the CFPB.
On August 12, 2015, the CFPB, OCC, and FDIC took action against Citizens Bank, N.A., for failing to credit consumers the full amounts of their deposited funds. The CFPB’s consent order requires the bank to provide approximately $11 million in refunds to consumers and pay a $7.5 million penalty for the violations.
The guidance can be found here.