As the Director of Regulatory Compliance here at PolicyWorks, my primary function is to lead the delivery of our compliance review services. I enjoy getting out of the office and working onsite with our credit union clients to help them identify, and correct, compliance deficiencies. In addition to the pleasure of working side-by-side with our credit union partners, this onsite work allows me to witness the practical implementation of regulations. I have learned that there are, often, multiple good ways of implementing compliance. I have also learned that there are errors which are common among credit unions and which are, usually, easily corrected. From time to time, I’ll use this blog to relay tips, tricks, and other good practices that I observe. I’ll also alert you to common mistakes that you can check for in your own credit union.
Today, a common mistake: the proper handling of Reg E errors. The crafters of Reg. E took error resolution seriously – they devoted an entire section of the regulation to it (§ 1005.11). This section requires credit unions to regularly notify members of their rights with regard to errors. Credit unions must also properly investigate errors when members report them. Part of a proper investigation required by Regulation E is communicating to the member the results of the error (see Reg. E 1005.11(c)(2)(iv) and 1005.11(d)1). Most credit unions investigate errors to the member’s satisfaction. What we find during our reviews is that credit unions commonly aren’t providing members with the final explanation of the investigation as required by the regulation.
We recommend that credit unions develop written procedures for handling Reg. E errors. It would be helpful if those procedures included a checklist or similar document that can guide staff’s handling of the error. And, as always, the credit union should fully train those staff that are responsible for handling Reg E errors.