On May 18, the Federal Deposit Insurance Corporation (FDIC), the Board of Governors of the Federal Reserve System (FRB), the Consumer Financial Protection Bureau (CFPB), the National Credit Union Administration (NCUA), and the Office of the Comptroller of the Currency (OCC) (collectively, the Agencies) issued guidance outlining joint supervisory expectations regarding deposit-reconciliation practices that may be detrimental to customers. Highlights of the guidance follows:

  • The guidance addresses a set of situations in which customers make deposits to accounts and the dollar amount that the financial institution credits to that account differs from the total amount deposited. Such discrepancies may arise in a variety of situations, including inaccuracies on the deposit slip, encoding errors or poor image-capture. The result may be a detriment to the customer and a benefit to the financial institution if not appropriately reconciled.
  • Various laws and regulations may be relevant to deposit-reconciliation practices. Among them, the Expedited Funds Availability Act, as implemented by Regulation CC, requires that financial institutions make funds deposited in a transaction account available for withdrawal within prescribed time limits. In addition, a financial institution’s deposit-reconciliation practices are subject to Section 5 of the Federal Trade Commission Act, which prohibits a financial institution from engaging in unfair or deceptive acts or practices.
  • 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.

The joint guidance is available here.