Compliance Bulletin

Bank’s Deposit Reconciliation Practices Found to be Unfair and Deceptive
August 24, 2015

The CFPB, acting in concert with the OCC and FDIC, announced a consent order against a Pennsylvania bank for not accurately reconciling discrepancies between the amount that customers deposit as indicated on deposit slips and the amount actually deposited. Under the bank’s internal procedures, the level of review that it applied varied depending on the amount of the discrepancy. Discrepancies of what the bank deemed to be de minimus were not reviewed at all. In practice, the agencies determined that the bank did not follow its own policies, and often disregarded discrepancies that required review. Customers were simply credited for the amount on the deposit slip whether the stated amount was above or below the actual amount. The bank’s practices were also found to be inconsistent with its customer disclosures. See the attached analysis of the orders prepared by Ted Kitada, senior counsel with Wells Fargo Bank and chairman of CBA’s Legal Affairs Committee.