Letter outlines consumer protections applicable to deposits

May 19, 2016 -- Consumer protection laws applicable to deposits is the topic of a new letter to credit unions, emphasizing that violations of federal law could occur if “credit discrepancies” are permitted or are not resolved in a timely manner.

The letter (LTCU 16-CU-04) -- issued by NCUA Wednesday in conjunction with Federal Reserve, CFPB, FDIC and OCC – includes interagency guidance and notes the violations would occur under the Expedited Funds Availability Act (as implemented by Regulation CC), the Federal Trade Commission Act, and the Dodd-Frank Wall Street Reform and Consumer Protection Act. The guidance issued with the letter, it states, addresses discrepancies that may occur with amounts deposited by a member or customer and the dollar amount credited to that account.

However, the letter states the guidance does not mandate specific practices, rather it emphasizes “the need to reconcile variances resulting from encoding errors, poor image capture, and other issues. “We encourage you to review your policies and practices to address discrepancies between amounts presented by members for deposit and the actual amount credited to the member’s account,” the letter states. “We expect credit unions to design and manage their deposit reconciliation practices to comply with Regulation CC and other applicable laws or regulations as part of maintaining robust compliance management systems.”

Interagency guidance regarding deposit reconciliation practices