Compliance Alliance Q&A 9/29/2020

Q: Must a bank have RDFI procedures in place to ensure a 30-day written notice is provided to account holders receiving Federal benefit payments prior to the actual closing of the account?  

 

A: Yes, you must give 30 days’ notice prior to closing an account receiving Federal Benefits.  However, this 30-days is not required if fraud is the reason that you are closing the account.

For Reference:
(c) Termination and revocation of authorizations. An authorization shall remain valid until it is terminated or revoked by: (3) The closing of the recipient's account at the RDFI by the recipient or by the RDFI. With respect to a recipient of benefit payments, if an RDFI closes an account to which benefit payments currently are being sent, it shall provide 30 calendar days written notice to the recipient prior to closing the account, except in cases of fraud;
31 CFR 210.4(c)(3) https://www.ecfr.gov/cgi-bin/text-idx?SID=9739a73095883d2503043dd3dfee9682&mc=true&node=se31.2.210_14&rgn=div8

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