Budgeted Revenue and the $12.99 Subscription

Unfairness. The three-part test is substantial injury, not reasonably avoidable by the consumer, not outweighed by benefits to consumers or competition. Charging a new fee each time the same transaction is re-presented inflicts injury that is substantial and cumulative -- five fees on a $12.99 item is $170 for one purchase. Consumers cannot reasonably avoid it: they do not control merchant re-presentment and typically cannot see it coming. The benefit side is thin; a single returned-item fee recovers the bank's cost, while the second through fourth fees primarily generate revenue. That is the profile regulators have described as an unfair practice.

Deception. Disclosures last updated in 2021 may not clearly explain that a single transaction can generate multiple fees. If the account agreement or fee schedule implies one fee per item, the gap between the document and the practice is a deception risk independent of the unfairness analysis.

Reg DD. The fee schedule must accurately disclose the amount and the conditions under which a fee is imposed, including the re-presentment practice. If the bank changes the practice to reduce fees, that is a favorable change requiring no advance notice; if it adds or increases fees, a change-in-terms notice is generally required at least 30 days before the change takes effect for adverse changes.

Practical read. The combination of high per-item fees, automatic re-presentment, and a solicitation to defer remediation is the fact pattern that produces both a public enforcement action and a restitution order. The fee structure should be changed, not defended.

No. The procedure misstates the rule and the practice compounds the error.

The rule. For an asserted error involving an electronic fund transfer, the bank must investigate and determine whether an error occurred within 45 calendar days of receiving notice (90 days for certain foreign-initiated or point-of-sale debit transactions, and for new accounts -- those opened within the prior 30 days -- the provisional credit period extends). If the bank cannot complete the investigation within 10 business days, it must provisionally credit the consumer's account for the amount of the alleged error, subject to the new-account extension to 20 business days, and notify the consumer within 2 business days of crediting. Provisional credit is not discretionary and is not conditioned on a branch manager's approval. Written notice of the results is required within 3 business days after completing the investigation.

Where the procedure fails.

• It treats provisional credit as triggered only when the investigation exceeds 10 business days and then requires manager approval, adding a gate the regulation does not permit.
• Thirty-eight percent of disputes resolved in 21 to 45 days without provisional credit means the bank exceeded the 10-business-day threshold repeatedly and never credited. That is a substantive violation for each affected account, not a paperwork issue.
• The disclosure of error resolution rights should describe these timelines; a 2021 document that mirrors the flawed procedure propagates the error.

Remediation. Rewrite the procedure to the regulatory standard, remove the approval gate, configure the core system to credit automatically at day 10 (or day 20 for new accounts), and run a lookback across at least the prior 12 months to identify accounts owed provisional credit and, where investigation exceeded the limit, the disputed amounts.

On the request. The CCO should decline, in writing, and should not soften the record. The relevant distinction is between timing of a public announcement and timing of an internal response. The bank can control the former; it cannot defer the latter. Deferring investigation and remediation while continuing to assess fees the bank has reason to believe are unfair converts a compliance problem into a deliberate one, and the delay itself would become a finding. Practically:

1. Send the COO a short memo stating that the fee practice and the Reg E procedure will be escalated to the audit or compliance committee at the next meeting regardless of the holiday season, that remediation work begins now, and that any decision to continue the current fee structure through the holidays must be made by the board with the risk documented.
2. Brief the committee chair before the meeting.
3. Ensure meeting minutes reflect what was presented and what was decided.

Remediation plan.

• Stop charging multiple NSF fees on re-presentments of the same transaction; cap at one fee per item effective immediately.
• Fix the Reg E procedure and system configuration, and authorize provisional credit without manager approval.
• Look back 12 to 24 months: identify accounts with multiple fees on one item and accounts denied provisional credit; calculate refunds plus any interest.
• Update the fee schedule and account agreement with accurate descriptions, and issue any required change-in-terms notices.
• Refresh frontline training and complaint intake so re-presentment complaints are routed to compliance.
• Report volumes, refunds, and remaining risk to the board quarterly until closed.