ACH Name/Number Mis-Match
Question: I have a question for you about misdirected ACH payments. Our member’s (member #1) employer sent his paycheck to a wrong account because they mistook a #4 for a #9. The member that mistakenly received the deposit (Member #2) thought this was manna from heaven and spent the funds. The likelihood of recovery from […]
Account Holds with Suspected ACH Fraud
Question: I have a question regarding holding funds on a suspected fraudulent ACH item. We disclose that electronic direct deposits will be available on the day we receive the deposit under our Funds Availability Policy. In the case we suspect fraud and are investigating the ACH credit, how long under the additional NACHA rules can […]
Debit Card Fraud: Who Is Responsible?
Question: I have a very specific Regulation E question that I believe I have the answer for, but others at the credit union have a different opinion. Let me give you the scenario: Cardholder is contacted by someone pretending to be a credit union employee, who states the cardholder’s card has fraud on it. The […]
Adverse Action Notices for Charged Off Loans
Question: If a loan account is charged off and closed, are we required to send an Adverse Action Notice to the borrower? Answer: You would not need to provide an adverse action notice in the case you described, since it doesn’t meet the definition of Adverse Action in Reg B: (2) The term does not […]
CTR: Multiple Transactions vs. Aggregated Transactions
Question: I attended the league’s “Bank Secrecy Act (BSA) for BSA Staff” Compliance Essentials training on August 21st. You spoke about when to check Item 3, “multiple transactions” on a Currency Transaction Report. Can you also explain when we check the Item 24 option “aggregated transactions” on the CTR and how these two items differ? […]
Who Provides the Risk Based Pricing Notice on Indirect Loans?
Question: Our NCUA examiner is stating that in an indirect loan transaction, the credit union is responsible for providing the Risk Based Pricing Notice (RBPN). I was under the impression that the dealer had to provide this notice. Do you know who is responsible? Answer: Let’s look at the requirement from Regulation V: 12 CFR […]
Ability to Repay on Construction Loans
Question: A member wants to build a new home while continuing to live in—and eventually sell—their current residence. When we underwrite construction loans, we always assess the long-term takeout (permanent financing) as part of the approval process. Are there circumstances where we can exclude the member’s current mortgage from the debt ratio calculation, or must […]
Overdraft LOC Fees, MAPR and FCU Rate Cap
Question: We are a Federal Credit Union. We offer an overdraft line of credit tied to members’ checking accounts, with an 18% interest rate. Members can access the line themselves (online, over the phone, or at a branch) without any fees—just the standard interest applies. However, if the system automatically transfers funds from the line […]
Regulation E and Cardholder Negligence
Question: A member reported that their debit card and the PIN were stolen together. They admitted the PIN was either written on the card or kept in the same wallet. There were subsequent unauthorized transactions. Do we need to process a fraud dispute in this case? We don’t see this often, since most members don’t […]