It was proposed recently that a fee be charged to consumers when we conduct an investigation and determine it was fraudulent. A number of people are against this, but I am trying to track down some specific regulatory guidance which indicates that this cannot be done. Is this covered in Reg E at all?

Charges for error resolution. If a billing error occurred, whether as alleged or in a different amount or manner, the financial institution may not impose a charge related to any aspect of the error-resolution process (including charges for documentation or investigation). Since the Act grants the consumer error-resolution rights, the institution should avoid any chilling effect on the good-faith assertion of errors that might result if charges are assessed when no billing error has occurred.

Commentary 1005.11 (c)(3)

You already h ave the citation where Reg E says this is a bad idea. I will go a step further and strongly encourage anyone who is thinking of adding fees in this environment to take a long hard look at comments from the CFPB and the President, and then do something other than adding the fee.

CFPB Initiative on Junk Fees

President urges companies to lower costs for consumers

any new fee will be looked at very harshly by regulators, especially if they believe it is being implemented solely to replace other fees that you may be removing under regulatory "suggestions", such as NSF fees.

pretty sure in a year or 2 the regulatory guidance will be banks should pay fees to clients for the honor of us banking them...

Thanks guys. I thought this was the case.