Answer:
Answer by Randy Carey: There are no regulatory restitution provisions in Regulation DD. You have a breach of contract and it will be up to the bank to determine what is the right course of action.
Answer:
Answer by Richard Insley: "Restitution" isn't exactly what's under consideration. In this case, you haven't taken money from customers improperly. Instead, you have cheated them out of interest payments your contract promised. I have seen depositors become very irritated about the smallest of errors in interest calculation and payment, so class action litigation is a serious possibility. Regardless of the regulators' lack of a TIS-specific corrective action policy, situations like this should be within the scope of their UDAAP rules.
I view this as a low-cost opportunity to be seen doing the right thing. With interest rates at rock bottom, the difference in compounding frequency will produce very little additional interest per account. As a demonstration of good faith, I would calculate the amounts due, round each one up to the next highest dollar, credit the accounts, and send out a letter of explanation.
First published on BankersOnline.com 12/17/12
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