The Efficiency Factor
Automation Affords this Century What the Assembly Line did for the Last
By Lori Moore, Director of Compliance

July 21, 2010, a day just like any other summer day except for the fact that President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) into law.  Is it a day that will live in infamy? Given that this historic legislation supposedly harkens 533 new, expanded and updated compliance obligations on the regulatory horizon, it most likely will.  Exactly when or how the bill’s mandates will go into effect are still a bit of an unknown.  What is known is if your financial institution is already struggling to maintain its current regulatory compliance due to lack of staff, budget or manageable processes--it is in for a lot more trouble.  Unless that is, changes are made and soon.





Are You Prepared for the Future of EFT and Fraud?

There is little doubt that the number, and most likely the value, of electronic payments will only continue to rise.  To prepare for the inevitable increase in risk, it is now more important than ever before to understand the legal framework, contractual issues, and best practices applicable to your ACH and Funds Transfer services.  In this webinar, we will discuss these important aspects to help your institution reduce its potential exposure to loss both now and in the future.

Speaker: 
Lori Moore, CRCM 
Director of Compliance
ATTUS Technologies

8/26/2010 3:00PM ET to 4:00PM ET





Question: Regarding Reg E, if a customer notifies us two years after an unauthorized transaction occurs, would we still be liable for the first 60 days of transactions?

Answer:  
Yes. Regulation E does not establish a statute of limitations for filing a claim. Regardless of when the consumer notifies the institution, they may not be held liable for the first unauthorized transaction or those that are posted within the 60 calendar days following the date of the statement on which the first transaction appeared. The customer’s liability becomes unlimited AFTER the 60 calendar day period ends.

The best way to think of this is that the customer is liable for any transaction the institution could have prevented had timely notice been given. Timely notice is defined by Reg E as 60 calendar days following the statement on which the first unauthorized transaction appeared. If the institution had been notified within the 60-day period, action could have been taken to prevent any subsequent transactions from posting within the two years prior to notice. Neither the institution nor the customer could have prevented these initial transactions and therefore, the customer is not liable. Keep in mind however, that the institution does not have to follow the error resolution procedures, such as giving provisional credit and meeting all of the stated timeframes. Your only obligation is to investigate the claim and determine if an error did in fact occur. If it did, reimburse the customer the amounts he or she is entitled to receive under the law.  


Got a question on a tricky regulation? We want to hear from you! Submit your question and an expert will answer it in a future issue.



Outdated Technology Opens Doors to Fraud
By Tracy Kitten, bankinfosecurity.com

Here's a riddle for you: What do you get when you mix antiquated security technology with the Internet? The answer: A security breach.

Two recent incidents have driven this point home, loud and clear. One involved our old friend the counterfeit check. This tried-and-true fraud scheme continues to plague financial institutions. And it seems that our foray into the realm of check imaging is making it even easier.

A report hit the wire last week about an innovative check-counterfeiting scheme out of Russia that involved the interception and duplication of information from check images. Now that we've moved into an imaged environment, instead of storing warehouses full of paper checks, most institutions simply store images of checks for their backup and records. Rather than keeping that backup in house, banks and credit unions more often than not outsource the storage to third parties that specialize in check image back-up--which we have now learned can be easily accessed by smart crooks.

To read more, click here.

Reserve Banks Announce Check 21 Availability Changes
frbservices.org

The Federal Reserve Banks will modify the credit availability schedule on substitute check endpoints contained in FedForward® and FedReturn® deposits as a result changes in presentment transportation servicing Boston, Windsor Locks, and Baltimore. The following changes will be effective August 23, 2010:

• Items drawn on all substitute check endpoints in the Boston and Windsor Locks zones will be deferred one day after the 12:01 a.m. deadline Monday
• Items drawn on all substitute check endpoints in the Boston, Windsor Locks, and Baltimore will be deferred one day after the 2:00 a.m. deadline Tuesday through Friday
• Availability on all forward substitute checks will be deferred at the 7:00 a.m. and 10:00 a.m. FedForward deadlines.

Your Best Career Coach:
The Future You
By Marshall Goldsmith, bnet.com

The best coaching you’ll ever get will not come from another person. It will come from inside you.

Take a deep breath. Take a deeper breath. Imagine that you’re 100 years old and you’re getting ready to die. Before you take that last breath, you’re given a wonderful gift: the opportunity to go back in time and talk with the person who is reading this blog post today, to help this younger version of yourself have a better life — both personally and professionally.

What advice would the wise 100-year-old you — who finally knows what really mattered in life — have for the you that is reading this blog post? As you think of the older you, whatever advice comes to mind, just do that.