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#2228893 - 01/13/20 08:15 PM 1005.11 Help
FlyGuy Offline
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It's not very often that we extend a claim past the 10 day mark. Most of our claims we can resolve pretty quickly. A handful need that extra time. I'm looking at 1005.11(c)(2)(I).

(2) Forty-five day period. If the financial institution is unable to complete its investigation within 10 business days, the institution may take up to 45 days from receipt of a notice of error to investigate and determine whether an error occurred, provided the institution does the following:

(i) Provisionally credits the consumer's account in the amount of the alleged error (including interest where applicable) within 10 business days of receiving the error notice. If the financial institution has a reasonable basis for believing that an unauthorized electronic fund transfer has occurred and the institution has satisfied the requirements of ยง 1005.6(a), the institution may withhold a maximum of $50 from the amount credited. An institution need not provisionally credit the consumer's account if:

In the past, we've not provided the interest adjustment during a provisional credit situation. In reading that, I think we are wrong. In most cases with our current rates, an adjustment isn't necessary. In those rare cases where we do have an adjustment to complete, we need to start doing the adjustment with the provisional credit.

In some cases, we determine an error didn't occur an thus debit our Provisional Credit, as well as reverse the interest adjustment? Just not sure what all we should be doing on this situation.

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#2228895 - 01/13/20 08:26 PM Re: 1005.11 Help [Re: FlyGuy]
Andy_Z Online
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That is pretty clear, "including interest where applicable." In my experience that isn't common, but it is stated as such to make the consumer "whole." The procedures should be reviewed.
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#2229132 - 01/15/20 08:52 PM Re: 1005.11 Help [Re: FlyGuy]
John Burnett Offline
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The Fed did a webinar in December on the topic of Reg E exam findings, as part of its Outlook Live series. One of the findings mentioned was failure to pay interest as part of a provisional credit (when an interest-bearing account is involved).

Usually, the math (when banks attempt to include interest) is such that no interest is paid (the calculation results in less than a penny's interest). But occasionally, the amount in dispute is big enough (and eventually rates might increase, maybe -- how's that for confidence?) and the calculations will result in at least a penny's interest. (And, by the way, there's no de minimis amount provision in the regulation.)

If you reverse a provisional credit because you disallow a claim, you should reverse any interest included as part of the provisional credit. If you reduce a provisional credit for some reason, you should recalculate and reduce the amount of interest paid in the provisional credit.
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#2229364 - 01/21/20 06:46 PM Re: 1005.11 Help [Re: FlyGuy]
Tanders922 Offline
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Let me ask another question, you issue a PC and make the credit permanent and notify the customer. Subsequently, you obtain additional information, can you then reverse the PC after you have made it permanent?

Thanks!

Tom

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#2229366 - 01/21/20 07:20 PM Re: 1005.11 Help [Re: FlyGuy]
Adam Witmer Offline
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Once you make provisional credit permanent, you can't reverse it.
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#2229369 - 01/21/20 07:27 PM Re: 1005.11 Help [Re: FlyGuy]
Tanders922 Offline
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Thanks Adam.. That is what I thought but wanted to confirm!

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#2229371 - 01/21/20 07:41 PM Re: 1005.11 Help [Re: FlyGuy]
BrianC Online
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Since I'm a bit of a football fan and there's a big game brewing, consider a game where the league determines long after the clock hits 0:00 that the referees made a mistake and missed a call that impacted the outcome of the game. The final score doesn't change and the game is still over, even after this discovery.

Final means final.
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#2229386 - 01/21/20 09:40 PM Re: 1005.11 Help [Re: FlyGuy]
burkemi Online
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That was a recurring theme in last year's playoffs. But as you said - final was final!
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#2229629 - 01/24/20 08:18 PM Re: 1005.11 Help [Re: FlyGuy]
Andy_Z Online
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Use the time available to ensure you have what is needed to make a decision, before it is finalized. If you hit the drop dead date, make a decision based on what you know. Sometime facts become known too late, but final is final, and this may be a lesson learned, or something that was not avoidable. But it is what it is.
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