Question of the Week: Regulation E and Provisional Credit

Question: 

Are we always required to provide provisional credit to a member who files a Regulation E dispute?      

Answer: 

No. Provisional credit is only required if the credit union is unable to complete its investigation by the 10th business day following the filing of a dispute. If the credit union can complete it by the 10th day and the result of the investigation shows no error, no credit of any kind is required. It is only when the credit union cannot complete its investigation by the 10th business day that provisional credit must be granted to acquire the additional time of up to 45 days from the time of the dispute to finish the investigation.

Also, a credit union may deny provisional credit if it requires a written confirmation of an error within 10 days of an oral notice but the member fails to provide that confirmation. The credit union may take up the full 45 days (or 90 days for a POS transaction) in this case, but it would not be required to provide provisional credit during the investigation period. Once the investigation period concludes, the credit union would need to produce the results of the investigation and, if an error occurred, credit the member at that time.