Correct. If a lot of customers were affected, regulators will want to review your discovery process (which accounts were affected and how far back did you go, etc.) and determine whether this was a single event or there are multiple such errors (for example, if caused by entering an incorrect interest rate into your system's parameters, did it happen only once, or have such errors occurred several times, what your internal controls are to verify system inputs, etc.). If it happens sporadically, it could reflect badly on your compliance controls generally.
As far as notice is concerned, it's generally good form to explain why a correcting entry is made to the customer's account (or why you have sent a closed account customer a check). If nothing else, transparency here can avoid a series of phone calls asking for an explanation of the adjustment from customers who pay attention to their account activity.
John S. Burnett
Fighting for Compliance since 1976
Bankers' Threads User #8