Answer:
Section 205.11 4 (Commentary) tells us that even if an account is closed, the procedures for resolving errors must be followed. Section 205.11(c)(2)(i) tells us that when a provisional credit is required, it is to be deposited into the consumer's account.
Based on this I would force the consumer's account open. I don't believe you would be criticized if you offered to send the funds to a new account or to send them a Cashier's Check. Wiring them funds would be the fastest method for the consumer. But the letter of the Reg. says to deposit it and if the claim is later denied, you have a better chance of recovering your funds.
If you force the account open and it is not used, or is used only to withdraw these funds, I would waive fees that wouldn't otherwise have been due such as a monthly maintenance fee.
First published on BankersOnline.com 08/29/05
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