Our lending operations department (not credit card) would like to initiate an EFT through our third party vendor to debit our customer's deposit account to exercise our right to offset for amounts owed on our customer's loan. Our deposit account terms and conditions discloses our right to offset any amounts owed to the bank. We know that generally Reg E, Section 205.3 (c)(5) would allow the bank to electronically transfer funds between a customer's accounts without the customer's specific request under certain circumstances and that the official commentary provides that this exception to Reg E includes the right to initiate "electronic debits or credits to consumer accounts for check charges, stop-payment charges, NSF charges, overdraft charges, provisional credits, error adjustments and similar items that are initiated automatically on the occurrence of certain events." In order to exercise our right to offset electronically, the transaction will need to be processed through our third party vendor. Do we have any Reg E or other regulatory concerns in doing so?
A customer has a monthly insurance premium set up to automatically be debited from his or her checking account. The customer comes into the bank and wishes to place a stop payment on the ACH draft. If we load a stop payment order to their account, what should our expiration date be? Our normal expiration date on a check is 6 months. Our deposit operations department seems to think we can only guarantee a stop payment on a draft for 1 month. Is this correct and what regulation answers this question?
Our Reg E disclosure states that the limit for point of sale transactions is $500 per business day, however, we have officers that want to increase the limit for some customers. I am concerned about discrimination issues since the limit would not be the same for all customers. It would appear there could be other operational issues as well if there were unauthorized transactions or stolen cards. Are my concerns valid?
We had a person come in and request their debit card to be returned to him after it was kept by our ATM. He was alleging that we did not have a right to keep his card. Our procedures are to keep and destroy any card that is not ours. Is there a regulation that I can refer to if this ever happens again?
NCR Corporation recently announced availability of a new integrated platform that will allow smaller financial institutions to enhance their image-based operations.
In our last issue we reported on several companies who are offering systems to help prepare for Check 21.
On July 30, 2002 the Sarbanes-Oxley Act (SOX) was signed into law.
I have many customers who have used their debit card for monthly debits such as to a satellite provider or Internet service provider. After they close their account, these transactions still try to hit. I have closed the debit cards and even hotcarded them but these companies still force the transactions through. When I dispute the transaction, the company says they will not honor the dispute without the cardholder's signature... yet most of the time we have closed the account due to negative balances. Is there any way around this? Can we not stop these companies from steadily forcing payments through closed accounts and cards?
Commonly cited violations have long been a source of important information for the design and management of compliance programs.
Are banks to have disaster recovery facilities at least 50 miles away from any of their existing facilities?