Question of the Week
Friday, April 5, 2019 7:25 AM

Question:  Under Reg E, are we always required to provide provisional credit when a member reports an error?

Answer:  No.  Under Reg E - 12 CFR 1005.11(c), a financial institution must investigate whether an error occurred within 10 business days of receiving a notice of error.  If the institution is unable to complete that investigation within 10 business days, it may take up to 45 days from the receipt of notice of error provided it gives provisional credit (and a few other requirements). 

So if you can complete the investigation within 10 business days, you do not have to provide the provisional credit.  That does not mean you should rush the investigation to avoid providing the credit, but being timely and diligent may reduce your exposure, in some cases, such as if no error actually exists.

If credit union determines an actual error occurred, you do have to return the funds and make a report back to the member.

www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1005/11/#11-b-2-Interp-1