I am getting push back from management on the Error Resolution rule regarding the $50.00 and VISA's zero liability. The bank has been with withholding the $50.00 from disputes, that are truly unauthorized, so because of VISA' zero liabiltiy rule I am saying we need to reimburse these customers. Management is saying why didn't the examiners find this exception? I don't know the answer to this question. My come back is that we are in violation of VISA' operating rules.

The examiners could have cited you for non-compliance with a requirement that is more protective of the consumer, but for whatever reason did not do so. It's still a violation of the Visa contract unless an exception applies. If Visa were to pursue the bank with a penalty for a rules violation, management might not be pleased.

Thanks John.

I would echo that if assuming your card disclosures include VISA liability language in them, although the examiners missed it this time, they could cite you with UDAAP if they find that you are disclosing one policy (Zero Liability) but in realty following a different policy.

An Indiana Bank that was hit with an $85,000 CMP for requiring police reports on Reg E claims tried using the defense "but no one said anything about it on previous exams" as an excuse.

http://www.journalgazette.net/article/20111029/BIZ/310299939

"Mike Marhenke, president and CEO of Independent Alliance Banks Inc., said the issue revolved around whether bankers could require customers to file a police report before giving temporary credit for unauthorized withdrawals from their accounts.

Staff at both banks under his watch required police reports because they simply missed that provision in the detailed regulations banks are required to follow, Marhenke said. Independent Alliance Banks is a two-bank holding company that owns Grabill Bank and MarkleBank.

“The last compliance exam, we were doing the same thing, and (inspectors) didn’t say a thing,” Marhenke said."