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NAFCU's Reggie Watson offers some guidance on whether Regulation E's error resolution rules apply to pending electronic transfers (EFTs) that have not been completed in a new Compliance Blog post.

Watson, NAFCU's regulatory compliance counsel, describes a situation in which a member might call to dispute a pending preauthorization charge. Watson says Regulation E does not directly address pending EFTs, and therefore "it is unclear if the credit union is required to follow its internal error resolution procedures with respect to a transaction that is still pending and has not reached settlement."

Watson then highlights parts of the regulation that can help determine if such a charge is considered an "error" that would require error resolution procedures. He also encourages credit unions to review their account agreements and card provider rules, and consider any reputational harm when making a risk-based decision on triggering the error resolution process.

Read Watson's blog here; those interested can sign up to receive new NAFCU Compliance Blog posts in their inbox every Monday, Wednesday and Friday by clicking here.