Compliance Center: Interagency Guidance on Deposit Reconciliation Practices Released

The National Credit Union Administration, together with four other federal financial regulatory agencies, issued guidance to address discrepancies that may occur with amounts deposited by a member or customer and the dollar amount credited to that account.

The Interagency Guidance Regarding Deposit Reconciliation Practices discusses consumer protection laws applicable to deposits, including 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, and that violations could occur if “credit discrepancies” are permitted or are not resolved in a timely manner.

The guidance does not mandate specific practices. However, it does emphasize the need to reconcile variances resulting from encoding errors, poor image capture, and other issues.

The agencies expect financial institutions to adopt deposit reconciliation policies and practices that are designed to avoid or reconcile discrepancies, or designed to resolve discrepancies such that customers are not disadvantaged. Financial institutions are expected to effectively manage their deposit reconciliation practices to comply with Regulation CC and other applicable laws or regulations and to prevent potential harm to their customers. Information provided to customers about the financial institution’s deposit reconciliation practices should be accurate.

Financial institutions should implement effective compliance management systems that include appropriate policies, procedures, internal controls, training, and oversight and review processes to ensure compliance with applicable laws and regulations, and fair treatment of customers. These actions will help minimize exposure to potential financial loss and supervisory action.

Compliance Question of the Week

We have several IRA accounts that were opened 10-or-more years ago. Our statements are being returned, and our members have not contacted us. At what point do these become dormant and get sent to the state?

Planned savings accounts are not payable or distributable until distribution of all or parts of the funds would be mandatory.  Once this occurs, the accounts begin to age for unclaimed property reporting.  If there is no positive owner contact after three years the account is considered abandoned.  The mandatory payout age for a regular IRA account holder is 70 1/2.

Resources

RCW 63.29.060
DOR Unclaimed Property
ORS 98.308
Oregon Unclaimed Property
IDS 14-512

Legal Briefs

National Credit Union Administration (NCUA)

The NCUA announced that it wants to hear from credit unions regarding the NCUA’s modernization efforts of the examination schedule. The NCUA creased a webpage for reviewing the initiative and also set up an email account for credit unions to send comments to regarding this initiative.

The NCUA announced that it has revised its monthly board meeting schedule for the remainder of 2016.

The NCUA released a Letter to Credit Unions detailing the member account deposit reconciliation practices guidance that the federal financial regulatory agencies released.

Consumer Financial Protection Bureau (CFPB)

The CFPB released its May 2016 Monthly Complaint Report. This month’s report focusing on credit reporting complaints by type, including incorrect information on credit reports, the investigations conducted by credit reporting company, inability to obtain credit report or score, credit monitoring, and improper use of a credit report.

Federal Reserve Board (FRB)

The FRB released the minutes from its discount rate meetings.

The FRB released a semiannual update of its Commercial Bank Examination Manual.

The FRB announced the release of its Economic Well-Being of US Household in 2015 report.

Nationwide Multistate Licensing System & Registry (NMLS)

The NMLS released several reports on NMLS activity including mortgages, money service business registrations, and a payday fact sheet. 

Federal Deposit Insurance Corporation (FDIC)

The FDIC released a report detailing the Opportunities for Mobile Financial Services to Engage Underserved Consumers.

The FDIC released the research report on Bank Efforts to Serve Unbanked and Underbanked Consumers.

Financial Crimes Enforcement Network (FinCEN)

FinCEN Director Calvery delivered testimony to the United States House of Representatives Committee on Financial Services Task Force to Investigate Terrorism Financing. The testimony focused on FinCEN’s strategic approach to financial intelligence and the regulatory framework in place to help combat money laundering and terrorism financing.

Office of Foreign Assets Control (OFAC)

OFAC has updated the SDN list as of May 25, 2016. The last update prior to this was May 19, 2016.

Questions? Contact the Compliance Hotline: 1.800.546.4465, compliance@nwcua.org.

Posted in Compliance News, Federal, NCUA, NWCUA.