The 10-Day Rule: When Fintechs Fail to Give Provisional Credit

You wake up to find $2,000 missing from your Chime, Varo, or Cash App account. You file a dispute immediately. The app says, “We are investigating.”

Two weeks go by. Your rent is due. The money is still gone. The app still says “Pending.”

If this has happened to you, your bank has likely violated the Electronic Fund Transfer Act (EFTA).

The Law: 10 Business Days (12 C.F.R. § 1005.11(c))

Under Regulation E, a financial institution has 10 business days* to complete its investigation of an error. If they cannot finish within 10 days, they **must** issue a *provisional credit (a temporary refund) for the full amount of the dispute while they continue to investigate (up to 45 or 90 days).

The Fintech Failure

Many fintech companies and “neobanks” rely on automated systems that simply ignore this deadline. They let disputes sit in “pending” status for weeks without issuing the required credit.

Strict Liability

This is a “strict liability” violation. It doesn’t matter if the bank eventually decides the charge was valid. If they missed the 10-day deadline to issue provisional credit, they have broken the law. You can sue for statutory damages, actual damages (like late fees or eviction costs caused by the missing money), and your attorney’s fees.