What must a DFI do when it receives a notice of an error according to Regulation E?

What must a DFI do when it receives a notice of an error according to Regulation E?

• A. Ignore it if they investigate
• B. Resolve it within 10 Business Days or provisionally recredit the account
• C. Respond within 30 days regardless of outcome
• D. Notify the customer unsatisfactorily

Answer: (B)

When a Depository Financial Institution (DFI) receives a notice of an error under Regulation E, it is required to resolve the reported error within a specific timeframe or provisionally recredit the customer's account. This regulation is designed to protect consumers, ensuring that they have a timely and efficient process for addressing transaction errors related to electronic fund transfers. By provisionally crediting the account, the DFI allows the customer access to the funds while conducting an investigation into the reported error. This requirement emphasizes the importance of customer protection and the need for prompt action in resolving disputes, thereby ensuring that customers are not unfairly disadvantaged during the investigation period. If the investigation confirms the error, a permanent credit will be provided; if not, the DFI must inform the customer accordingly. This approach balances the interests of both consumers and financial institutions by providing a clear protocol for handling errors.

When a Depository Financial Institution (DFI) receives a notice of an error under Regulation E, it is required to resolve the reported error within a specific timeframe or provisionally recredit the customer's account. This regulation is designed to protect consumers, ensuring that they have a timely and efficient process for addressing transaction errors related to electronic fund transfers.

By provisionally crediting the account, the DFI allows the customer access to the funds while conducting an investigation into the reported error. This requirement emphasizes the importance of customer protection and the need for prompt action in resolving disputes, thereby ensuring that customers are not unfairly disadvantaged during the investigation period. If the investigation confirms the error, a permanent credit will be provided; if not, the DFI must inform the customer accordingly. This approach balances the interests of both consumers and financial institutions by providing a clear protocol for handling errors.