Credit unions and other financial institutions could face harsh consequences if they don't do more to ensure deposits slips match actual deposits, according to a new warning issued Wednesday by the Federal Reserve, FDIC, NCUA, OCC and the CFPB.

"Financial institutions' policies or practices that do not appropriately reconcile credit discrepancies within the prescribed time frames may raise Regulation CC concerns if such discrepancies leave customers without timely access to the correct amount of funds. Failure to comply with the funds availability requirements in the Expedited Funds Availability Act and Regulation CC may subject the financial institution to civil liability and possible action by the appropriate Agency," the interagency guidance letter said.

The warning comes about nine months after the CFPB, FDIC and OCC ordered Citizens Bank, N.A., Citizens Financial Group, Inc. and Citizens Bank of Pennsylvania to pay about $11 million to customers and $20.5 million in a variety of federal penalties for allegedly pocketing money from customers whose deposit slip totals didn't match the amounts actually deposited by the institution.

According to the CFPB, between Jan. 1, 2008, and Nov. 30, 2013, Citizens Bank's scanners sometimes misread customer deposit slips or checks, or deposit slip totals did not equal the actual deposit totals. The CFPB argued that Citizens Bank did not take action to fix the mistake if it fell below a certain dollar amount. In some cases, when the total on the deposit slip was lower than the actual deposit amount, the bank credited the customer for the lower amount and kept the difference, it claimed.

"In other words, if the bank read the customer's deposit slip as totaling $100, but the customer had actually deposited $150, the bank took the $50 difference for itself without ever informing the customer about what it had done," CFPB Director Richard Cordray said in a statement. The bank shorted customers millions of dollars over the years this way, he said.

Citizens Bank told customers its deposits were subject to verification but only looked into discrepancies greater than $50 between January 2008 and September 2012; between September 2012 and November 2013, it only looked into discrepancies above $25, according to the CFPB.

On Wednesday, the Federal Reserve, FDIC, NCUA, OCC, and the CFPB said they expect financial institutions to adopt policies and practices designed to avoid, reconcile and resolve discrepancies. They warned financial institutions that their deposit-reconciliation practices for transaction and non-transaction accounts could violate the FTC Act or Dodd-Frank Act in addition to Regulation CC when those practices result in credit discrepancies.

"Like many other peer banks, Citizens employed certain practices to ensure the next-day crediting of deposits in situations when deposit slips contained mathematical errors," Citizens Bank told CU Times in a statement last August. "However, these past practices and disclosures, principally prior to early 2011, could have been better. Our implementation of a new teller system in the fourth quarter of 2013 has automated this reconciliation process, and we believe our process is now considered among the best in the industry." Citizens said its overcredits and undercredits to customers during the period were approximately equal and that customers who were overcredited could keep the extra money.

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