Answer:
Whether you have to provide provisional credit depends on whether you've told your member that he or she needs to confirm the claim in writing within 10 business days, whether he or she does so and whether you've completed your investigation by the 10th business day. If you've completed your investigation and decided whether the error claim is valid, you simply close the case, make the adjustments within the time parameters allowed in section 205.11, and notify your customer (again, within time parameters). The language about refunding fees resulting from the error is in the Interpretations (Commentary) to the regulation (comment #6 to paragraph 205.11(c)). It relates to your final determination that the error occurred and your adjustments for that error. The wording surrounding a provisional credit requires the crediting of interest, if applicable, but does not mention fees.
I may be splitting hairs, but I don't believe you are required to reverse fees as part of the provisional credit. You are required to do so if and when you accept the error claim as valid and make the final adjusting entries. Some institutions have found it efficient to include the fee adjustment in the provisional credit, so that no further entry is needed if the institution approves the claim. They are able, in many cases, to indicate simply that the provisional credit has been made final.
First published on BankersOnline.com 9/10/07
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