IBA Compliance Connection

Your go to source for compliance!

For the error resolution notices required for our prepaid accounts, we generally provide an abbreviated notice on our periodic statements. However, for one of our prepaid card account products, we do not provide periodic statements but are providing the alternative electronic or written transaction histories. Can you review our error resolution notices and confirm that it is correct to use Model Form A-7(b) in that case?

—

by

admin

While we cannot review your institution’s error resolution notices for compliance with regulatory requirements, as we cannot provide legal advice, we can provide general guidance on the use of the model forms in Regulation E.

We believe that your bank should use a modified version of the error resolution notice in Appendix A-3(b) when providing electronic or written transaction histories as an alternative to the periodic statement notice, rather than the model form provided in Appendix A-7(b).

Regulation E states that when you provide the alternative electronic and written transaction histories, you may use “a notice substantially similar to the abbreviated notice for periodic statements contained in paragraph (b) of appendix A–3 of this part, modified as necessary to reflect the error resolution provisions set forth in paragraph (e) of this section.”  The longer model notice in Appendix A-7(b) is meant to be used as an annual error resolution notice.

For resources related to our guidance, please see:

  • Regulation E, 12 CFR 1005.18(d)(2), Requirements for financial institutions offering prepaid accounts (“Annual error resolution notice. The financial institution shall provide an annual notice concerning error resolution that is substantially similar to the notice contained in paragraph (b) of appendix A–7 of this part, in place of the notice required by § 1005.8(b). Alternatively, a financial institution may include on or with each electronic and written account transaction history provided in accordance with paragraph (c)(1) of this section, a notice substantially similar to the abbreviated notice for periodic statements contained in paragraph (b) of appendix A–3 of this part, modified as necessary to reflect the error resolution provisions set forth in paragraph (e) of this section.”)
  • Regulation E, Appendix A-3(b) (Error resolution notice on periodic statements (§ 1005.8(b)).)
  • Regulation E, Appendix A-7(b) (Disclosure of error-resolution procedures for financial institutions that do not provide periodic statements (§ 1005.18(d)(1)(ii) and (d)(2)).)