If the interest paid on a certificate of deposit that has already matured is later found to have been calculated incorrectly, is there a minimum amount that does not require payment to the customer if the difference is less than that amount? For example, if the interest due the customer is less than say fifty cents, is it necessary to pay that amount to the customer?

When you caluclate the correct amount, does it throw the APY off my more than .05%? There is no reimbursement requirement for deposits, but don't be surprised if your regulator "suggests" you make up the difference. If it was an isolated case, I wouldn't worry about it. If you have a systemic problem, make sure you document how you corrected it.

I agree with anon that there is no tolerance here. You didn't live up to your agreement with the customer. It should be paid. But if this is a case of isolated instances and minimal amounts, I might correct the procedure and move on.

I still have a (ridiculous) check from my cell phone provider for $.02.

If we discover this problem is not isolated (so we want to reimburse), are we required to issue a check to the customer along with an explanation letter or can we just credit their account (provided its still open) and provide a statement message?

We have discoverd an interest calculation problem with a certain class of accounts...it's definitely a pattern or practice and we are intending to reimburse the customer...the trouble is the amounts are under $.10.

Are you aware of any Interagency Guidance on how these should be handled - similar to what's out there for TIL reimbursements? Or is there something in the Reg I'm just missing?

We found such a situation many years ago. Since our practice has always been to "do the right thing" we didn't investigate requirements, we just moved forward with the corrections. We had to hire an accounting temp to come in for about 3 weeks to calculate amounts due. They ranged from $1.00 to about $200. Each customer received a personal phone call and a letter along with their check explaining the situation.

In some cases, the customers were overpaid. Obviously, these customers were not contacted regarding the error.

Some of the underpayments involved IRA accounts, so funds had to be credited properly to the IRA plan and in some cases transferred to new custodians.

All calculations included interest from date of error to date of correction.

This is not a regulatory issue, it is a matter of breach of contract. There are no regulatory restitution requirements in Regulation DD, nor are there any civil penalties associated with violations of Regulation DD (they were repealed).

If you want to "do the right thing", do it in the most cost effective manner available to the institution. I would think that a credit to their monthly statement and a statement message would probably foot the bill. If you try anything else, checks and letters, based on what you said the adjustments would be, the administrative costs are going to far outstrip the corrections (stationary, postage, etc.).

Depending on the amount of time over which this error happend - less than $.10 per account may simply be chalked up to nothing more than a rounding error.