Regulators Announce New Guidance for Deposit Reconciliation

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Financial Regulators Announce New Deposit Reconciliation Guidance


WASHINGTON — The five federal financial agencies released guidance on Wednesday that requires financial institutions to ensure they are addressing discrepancies customers sometimes face between the amount they deposit in their account and the amount they are credited.


This may cause “a detriment to the customer and a benefit to the financial institution if not appropriately reconciled,” states the guidance, which was issued jointly by the Federal Deposit Insurance Corp., the Federal Reserve, the Consumer Financial Protection Bureau and the National Credit Union Administration.


A common example, the agencies note, is when a customer deposits more than is indicated in their deposit slip.


“The customer may deposit $110 to an account, but may indicate on the deposit slip that only $100 has been tendered,” the guidance notes. “In this case, the financial institution may credit $100 to the customer’s account as indicated on the deposit slip without reconciling the $10 discrepancy.”


In other cases, the banks might make a mistake, as when they “do not research or correct all variances between the dollar value of items deposited … and the dollar amount that is credited,” the guidance says.


On the whole, financial institutions possess the resources to correct these mistakes through “technical and other processes,” according to the agencies.


The agencies said they would leave financial institutions off the hook in certain “limited” cases — “for example when an item is damaged to the point that its true amount cannot be determined.”


In the guidance, the agencies cite several laws and regulations that require banks to address such discrepancies through “deposit reconciliation.” Those include the Expedited Funds Availability Act, which holds that financial institutions must be transparent about their holding policies; and Section 5 of the Federal Trade Commission Act, which prohibits them from engaging in “unfair or deceptive acts or practices.”


Financial institutions must “adopt deposit-reconciliation policies and practices that are designed to avoid or reconcile discrepancies,” the guidance concludes, “or designed to resolve discrepancies such that customers are not disadvantaged.”




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