The Federal Reserve issued another edition of its Consumer Compliance Outlook (Third Issue 2025). This issue focused on Regulation E, electronic payments and instant payment services such as FedNow and the RTP network. While there was nothing new or groundbreaking noted with respect to these topics, it did provide some clarification, as it gave an overview of Regulation E’s error resolution requirements (§1005.11); summarized consumer liability (§1005.6); and touched on some of the common violations observed by examiners.
One common violation had to do with reversing credit after an investigation is considered final. Specifically, when reporting the results of an investigation to the consumer, an institution must indicate whether any provisional credit given is final. It was noted that …once a financial institution provides notice that a provisional credit has been made final, the financial institution generally cannot reopen the investigation or reverse the credit. This also means that, if the institution ...later learns the merchant refunded the consumer or that the transaction was authorized, the institution cannot reverse the credit. While this isn’t necessarily new, it is something that has been on examiners’ radar. We addressed this in more detail in the October 2024 issue of our magazine, Banking on BCC.
Published
2025/11/24