I am wondering if we can credit fee's (NSF and Service Charges) that a customer was charged due to a disputed EFT item as part of their provisional credit. And then be able to reverse that "provisional credit" it the transaction is determined to be valid.

Any thoughts????

As common practice, it's more work than it's worth and maybe poor customer service. I don't do much Reg E at this FI, but at the other FI, we decided to do it but never got around to implementing it.

I think you must provide fees and interest in the provisional credit. Refer to §205.11(c). I like to say "make it like it never happened". Whether it is provisional credit or final credit doesn't matter.

I guess I misunderstood the question. I thought Brandy was stating that her FI does grant these during Provisional Credit and is asking if it's okay to reverse if transaction proves to be valid.

But yes, you should make your customer "whole" at Provisional Credit time.

Actually, we don't currently refund fee's until the error is resolved. In 205.11(c)(2)(i), it say's " Provisionally credits the consumer's account in the amount of the alleged error (including interest were applicable) with in 10 business days..."
It doesn't say that fees are included in the provisional credit requirement.

Are you seeing something I'm not?

Brandy, I believe you are reading the regulation too literally. From the Staff Commentary:

205.11.(c).6. Correction of an error. If the financial institution determines an error occurred, within either the 10-day or 45-day period, it must correct the error (subject to the liability provisions of 205.6 (a) and (b)) including, where applicable, the crediting of interest and the refunding of any fees imposed by the institution. In a combined credit/EFT transaction, for example, the institution must refund any finance charges incurred as a result of the error. The institution need not refund fees that would have been imposed whether or not the error occurred.

You must adjust the fee at the time you issue credit in the event that the error is the sole cause of the fee.