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Federal Register / Vol. 86, No. 128 / Thursday, July 8, 2021 / Notices
lotter on DSK11XQN23PROD with NOTICES1

investigating an error must conduct, at a minimum, a review of its own records regarding the alleged error. 53
This review must include at least any relevant information within the institutions own records. 54
Examiners found that some financial institutions violated Regulation E by failing to conduct a reasonable investigation and instead denied claims solely because the consumers had previously conducted business with a merchant. One institution, upon seeing that a consumer was challenging a charge from a merchant with whom the consumer had prior transactions, closed error investigations without completing them, and instead instructed consumers to first direct the claim to the merchant that made the charge.
In response to examiners findings, the financial institutions updated their training to ensure that employees were properly trained on the applicable Regulation E investigation requirements and enhanced certain policies and procedures and monitoring to ensure investigations are completed properly.
In addition, the financial institutions identified and remediated all consumers whose Regulation E error claims were wrongly denied based upon pre-existing relationships with the merchant and whose error resolution claims were not investigated as required.
2.4.5 Failure To Properly Remediate Errors When a financial institution determines an alleged error did occur, commentary to Regulation E highlights it must correct the error . . . including, where applicable, the crediting of interest and the refunding of any fees imposed by the institution. 55
Examiners determined that some financial institutions failed to refund associated fees and credit interest when correcting an error. One such institution implemented automated processes, as well as policy updates and enhanced training to address the issue. At another institution, employees failed to provide proper credits and refunds although it was required by the institutions procedures. This failure indicated a lack of proper training, which the institution was asked to enhance. Both institutions stated that they would or had remediated impacted consumers.
For another institution, this violation occurred because the institutions ACH
teams reviewed issues on a transaction-

by-transaction basis, which did not allow it to evaluate the impact of the issue at the account or claim level. This institution reorganized its staff to evaluate consumer accounts on an individual or account level, conducted a lookback to remediate impacted consumers, and updated policies to ensure that fees were credited to the accounts.
Similarly, an organizational issue caused the problem at another institution. This institution used multiple divisions to investigate and correct errors, depending on the type of error alleged. Differing policies and procedures between divisions created various levels of authority for error resolution. Because of these differences, the institution failed to refund the fees as is required by the Regulation E
commentary, despite determining the alleged error occurred. The institution rectified this situation by reviewing and consolidating the role of error investigation into one division to ensure all Regulation E errors were consistently processed and committed to remediate harmed consumers.

right to revoke such consent. 62
Regulation E requires institutions to maintain evidence of compliance for a period of not less than two years from the date action is required to be taken or disclosures are required to be given.63
Examiners identified a number of violations in connection with these overdraft opt-in requirements, including the following:
Failing to obtain affirmative consent from consumers before charging them overdraft fees for ATM and one-time debit card transactions, due to coding errors, systems mergers, or inadequate phone-based opt-in procedures. These institutions provided remediation to consumers assessed these overdraft fees without their authorization and ceased charging overdraft fees to consumers who did not opt in.
Failing to advise consumers who opted-in to overdraft online of their right to revoke their opt-in to ATM and one-time debit overdraft services as part of the opt-in confirmation notice.
Supervision issued a Matter Requiring Attention MRA regarding the need for a notice that included the right to revoke and also remediation for 2.4.6 Overdraft Opt-In and Disclosure consumers impacted by the previous Violations deficient notice.
Failing to retain evidence of having The CFPB continues to examine obtained affirmative consent from financial institutions overdraft opt-in and disclosure practices for compliance consumers to opt into overdraft services for ATM and one-time debit card with relevant statutes and regulations, transactions, including due to process including Regulation E,56 Regulation deficiencies for in-branch opt-in and DD,57 which implements the Truth in Savings Act,58 and the Dodd-Frank Acts general document retention failures.
The institutions were directed to rectify prohibition on unfair, deceptive, or their procedures.
abusive acts or practices.59
Failing to provide consumers Many institutions provide various overdraft opt-in notices that were overdraft products that charge fees for substantially similar to the Model Form transactions that overdraw accounts.
A9 disclosure, in violation of Regulation E prohibits financial 64
institutions from charging overdraft fees Regulation E. Institutions corrected their notices.
on ATM and one-time debit card Supervision identified violations of transactions unless consumers Regulation DD requirements related to affirmatively opt in to overdraft overdraft services as well, including:
service.60 Among other things, Disclosing to consumers, through Regulation E requires that institutions automated systems, available account provide consumers a reasonable balance amounts that included opportunity for the consumer to discretionary overdraft credit that the affirmatively consent, or opt in, to the service for ATM and one-time debit card bank potentially could provide; 65 and Failing to correctly disclose on transactions. 61 Moreover, institutions periodic statements the amount of must provide consumers with overdraft fees incurred by consumers confirmation of the consumers consent during a statement cycle.66
in writing, or if the consumer agrees, The institutions implemented or electronically, which includes a statement informing the consumer of the proposed policy and procedure changes to address the violations.

53 12 CFR 1005.11c4. Section 1005.11c4
applies when the conditions in 1005.11c4i and ii are satisfied.
54 12 CFR part 1005, supp. I, comment 11c4
5.
55 12 CFR part 1005, supp. I, somment 11c6.

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CFR 1005, et seq.
CFR 1030, et seq.
58 12 U.S.C. 4301, et seq.
59 12 U.S.C. 5531, 5536.
60 12 CFR 1005.17.
61 12 CFR 1005.17b1ii.
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CFR 1005.17biv.
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64 12 CFR 1005.17d.
65 12 CFR 1030.11c.
66 See 12 CFR part 10306a3.
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