Bureau Issues Consent Order for Regulation E Violations
On January 3, 2019, the Bureau of Consumer Financial Protection (Bureau) issued a consent order against USAA Federal Savings Bank (Bank) for Regulation E violations. The 39 page consent order states that the Bank failed to properly stop preauthorized Electronic Funds Transfers (EFTs) and failed to conduct adequate error resolution investigations. In addition, the Bank reopened closed consumer accounts in certain circumstances without providing timely notice. The Bureau’s consent order requires the Bank to pay a civil money penalty of $3.5 million and provide $12 million in restitution.
CLA’s compliance consultants perform compliance testing reviews of these same Regulation E requirements and we do find violations of the provisions related to stopping preauthorized EFTs and not following the required timelines for error resolution investigations. It important that financial institutions have the proper EFT policies and procedures in place and conduct effective compliance monitoring and auditing of these areas. ���
CLA’s financial institution regulatory compliance team assists banks and credit unions nationwide in establishing regulatory compliance programs, conducting compliance testing, and training staff on regulations. Justin Robinson is a member of CLA’s regulatory compliance team and can be reached at justin.robinson@CLAconnect.com.
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