In Supervisory Highlights, Issue 26, Spring 2022, this subject matter was discussed. The area of Error Resolution handling has been a continued hot topic in regulatory examinations.
Examiners found violations related to the notice provided to consumers after an institution determined no error or a different error than alleged by the consumer had occurred upon the completion of a Regulation E error investigation. Section 1005.11(d)(1) requires a financial institution to report the results of its investigation, including a written explanation of the institution's findings and the consumer's right to request the documents that the institution relied on in making its determination. Upon request, the institution must promptly provide copies of these documents.
Examiners determined that institutions violated 12 C.F.R. § 1005.11(d)(1) by failing to include a statement noting the consumer’s right to request the documents that the institution relied on in making its determination after determining no error or a different error occurred as part of the report of the results. Examiners also found that institutions failed to fulfill consumers’ subsequent requests to provide the documentation relied upon to make the determinations that no error occurred.
Institutions should ensure their report of results letter templates explicitly state the consumers’ right to request documents that the institutions relied on in making their error investigation determinations. Institutions should also check to ensure that their service providers have compliance management system enhancements to ensure requests for documents are honored.