Does anyone have a policy like this? If the customer's balance is off by less than $1, we are not going to send out correction letters/notices. If they find the difference and complain, we will credit them. But it costs less for us to eat these errors than to send the notices. Do we need to put this in our disclosures?

When I first started in banking and worked in the proof department, we had a general ledger account (over&short account) to which we posted errors of less than $1. In more recent times, I have seen that threshold moved to $5 or even $10 dollar. This was only applicable to deposits and was not used in regard to loan payments or other transactions. It is a very common practice. This is similar to a process that I have used for cash outages for a small amount on a teller line.

Yes, Nanwa, you should disclose it in your Deposit Account Agreement. Make sure you differentiate between "less than $1.00" and "$1.00 or less" (or whatever threshold you choose).

Is this listed in a reg somewhere? I am not finding it in Reg DD. It always helps my argument if I can cite something.

I don't know that it is part of a Reg, but a contractual provision.

For all deposits in which there is a discrepancy of
ten dollars ($10.00) or less, (for example, if the
actual deposit is more or less than as stated on
the deposit slip), we may elect, at our discretion,
to charge off or credit the difference.

We still send out a correction notice regarless of the $ amount. If it is only 50 cents, we will let the customer know.

Kara, while that is great customer service, it is a real time and money burner. Basically you are crediting the customer the amount they think they are depositing - you really get very few complaints. If you have an employee suggestion program that pays $ - this would be a good one and collect the reward.

Oh, no! We don't credit the amount if it isn't actually what the deposit is for. We make note of the error, contact the customer and let them know that the deposit was less or more than what they made.

But, the fact of the matter is you spend $5 to let the customer know that their deposit was off by $.10 or $.50.

The cost savings is in the forms, the processing of the forms, the human time filing out the forms, the postage in mailing a copy to the customer, somebody calling the customer, on and on.

It's also amazing that in all the years I ran or managed the proof department, we never ran a deficit in the over $ short account.

Oh, I understand what your getting at! Silly me!

I am a little confused as to why we would need to disclose this internal procedure to our customers. If for example a customer writes a check for 10.00 and it clears for 11.00, we credit the customer the $1.00, but write off the $1.00 rather than pursuing it with the bofd or through the Fed. Would we need to disclose this?

What we are describing is when a customer deposits, for example 3 checks, one for $10.00, one for $11.00 and one for $12.50 and makes then make a deposit slip for $33.00. We would over/short the difference to a GL account rather than notify the customer of the $.50 error. The customer thought they were depositing $33.00, they got credit for $33.00 - so you get very few complaints.

I alway try to make a transposition error (in my favor of course) for $9.90 on all multiple check deposits that I make - it pays me a little extra interest in these pitiful low-interest rate times. Just kidding!!!

Oh - and don't tell me that won't work at your bank because your tellers proof all deposits with an adding machine tape at the teller window before sending the items to proof. Unless you are a real-time on-line processing bank, drop me an e-mail - I can come out to your bank and probably save you a ton of money.

The tellers here are responsible for all their deposits. We don't have a proof department here!

We qualify, and we just might take you up on the offer!

Don't I wish!! We adjust for every penny, I may be having a discussion with our proof folks and our office managers!!! Thanks for the great idea!