Topic: Periodic Account Statements
-
The answer to this question indicates that if a customer waits two years before reporting recurring fraudulent charges on their account, their bank likely would be required to credit the customer for any unauthorized transactions that occurred during the first sixty days following the periodic statement reflecting the initial fraudulent transaction. Are we correct that such a customer also would be eligible for a refund of all fees and interest we charged for that sixty-day period, but not for any fees and interest we charged after the sixty-day period?
—
by
No, we believe that such a customer would be entitled to a refund of all fees and interest imposed in relation to the fraudulent transactions — occurring during and after the initial sixty-day period. Regulation E requires a bank to credit a customer for the unauthorized transactions that occurred during the first sixty days after…
-
We qualify as a small servicer under Regulation Z. Are we required to provide monthly statements for all residential mortgage loans, or only for those that have escrow accounts? If monthly statements are required, can customers choose to not receive a monthly statement, or to receive an electronic statement only?
—
by
We do not believe you are required to provide monthly statements for residential mortgage loans since you qualify as a small servicer under Regulation Z. Regulation Z contains an express exemption from the requirement to send periodic statements for residential mortgage loans when such loans are serviced by a small servicer — regardless of whether…
-
We recently received a Regulation E claim from a customer regarding fraudulent charges to their account that first occurred two years ago and have continued since that time. Is there a time limit for how long a customer has to submit a claim? For overdraft fees and interest that may have been imposed due to the fraudulent charges, do we need to examine only the sixty-day period since the first fraudulent charge, or do we need to review the last two years and credit back any resulting fees and interest?
—
by
No, we do not believe there is a time limit on filing a claim for unauthorized transactions under Regulation E. We believe your bank likely will be required to credit the customer for any unauthorized transactions that occurred during the first sixty days following the periodic statement reflecting the initial fraudulent transaction. We also believe…
-
A customer recently notified us of several unauthorized online debit card transactions that occurred during a four-month period earlier this year, and their debit card was not lost or stolen. We are aware that under Regulation E, customers face unlimited liability for unauthorized transactions that occur more than sixty days after transmission of a periodic statement showing an unauthorized transaction up to the date we are notified of the unauthorized transaction. However, is there a requirement that those subsequent unauthorized transactions be recurring or initiated from the same place as the first unauthorized transaction?
—
by
No, we are not aware of any requirement under Regulation E that subsequent unauthorized transactions be recurring or from the same place as the first unauthorized transaction for a customer to be liable for them. Your bank likely will be required to credit the customer for any authorized transactions that occurred during the first sixty…
-
Can we turn off IRS Form 1098 notices, either for the year or permanently, for loans that we have charged off when the customer has paid no mortgage interest on the loan during the year?
—
by
We believe that you may turn off IRS Form 1098 notices for the year if no mortgage interest has been paid on the loan during the year, but we do not recommend turning off IRS Form 1098 notices permanently for loans that have been charged off until your institution has cancelled or sold the loans.…
-
Are we required to send monthly account statements to deceased customers? We have a few customers that we know are deceased and are the sole owners of their accounts. The account statements are generated monthly for these customers, and when we mail them out, they get returned to us. Can we reduce the frequency of these statements from monthly to yearly?
—
by
No, you are not required to send account statements to deceased customers that are being returned to your bank. In fact, it is advisable to discontinue mailing periodic statements (whether monthly or yearly) to a customer that you know is deceased, in order to prevent the statements containing personal financial information from falling into the…
-
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
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…
-
If a cash deposit is made at a retail store to a prepaid card account, does the transaction description on the periodic statement need to include the name and location of the retail store? Does the answer change for a cash or a check deposit at an ATM? Also, for retail purchases that are made in person or online, should the periodic statement list the city and state? Is the street address required?
—
by
Cash Deposits No, we do not believe your bank is required to list the name and location of a retail store on your periodic statement when a cash deposit is made to a prepaid account at the retail store. As to the retail store location, when a consumer initiates a transfer at an electronic terminal…
-
We have home equity lines of credit (HELOCs) maturing this year, and we are allowing the borrowers to renew for another draw period. We will charge modification fees that include charges for a flood determination, a credit report, and document preparation. The borrowers will have the option of paying these fees upfront in cash or by drawing on the HELOC. How should these fees be reflected on the initial periodic statement for each option the borrower may choose? We use the home-secured format for our HELOC periodic statements.
—
by
We believe you are required to disclose these modification fees for the HELOC on the initial periodic statement as charges other than finance charges, whether your customer pays these fees with cash or with funds drawn on the line of credit. Although Regulation Z exempts finance charges that qualify as “start-up fees” from inclusion on…
-
We would like to combine the paper statements for our customers’ deposit accounts. We currently charge paper statement fees. If a customer currently pays multiple paper statement fees, can we continue charging multiple fees when we issue a single combined statement for the accounts? Also, if we have multiple joint accounts with a single common member, do we need to obtain all of the parties’ consents to a combined statement? For example, say John owns a joint account with his wife and another joint account with his daughter. Does John have the authority to request a combined statement, or would we need his wife and daughter’s written consents?
—
by
We do not recommend charging multiple paper statement fees when providing a single combined paper statement covering multiple accounts. Even if this practice appears to be permitted by the language in your account agreements, we believe it could raise UDAAP issues as to the fairness and business justification for charging multiple paper statement fees for…