The wording of the regulation and of the official interpretation represent two alternatives for handling the requirement. You can use either, since either furthers the goal of the requirement that the consumer get a five-day warning of the drop in his balance to give him time to move in funds to prevent checks from bounding and fees from accumulating.
Last edited by John Burnett; 11/15/16 03:42 PM.
Some banks stick with the wording of the regulation and monitoring activity for five days to scrutinize items that need to be paid and fees that need to be voided or refunded, which is clearly more complicated than using the alternative in the interpretation, because they are concerned about customers who, given the advance warning, might pull funds out of their accounts to avoid having to pay the bank back.
Some banks that have tried the alternative "we will reverse the provisional credit on [date]" approach have found that it has worked well for them; others have said they've experienced problems.
If you do use the alternative in the Official Interpretations, you do not have to include the sentence saying you will honor items for five days, etc.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8