(j) Person means a natural person or an organization, including a corporation, government agency, estate, trust, partnership, proprietorship, cooperative, or association. When a consumer requests copies of documents, the financial institution must provide the copies in an understandable form. The same toll-free telephone number and Web site may be used to comply with 226.20(e)(3)(ii) and (f)(2). Electronic or mechanical confirmation (such as a PIN). The term bona fide trust agreement is not defined by the act or regulation; therefore, financial institutions must look to state or other applicable law for interpretation. (f) Continuing right to opt in or to revoke the opt-in. Telephone number. 1. Reasonable opportunity. A consumer may be held liable, within the limitations described in paragraph (b) of this section, for an unauthorized electronic fund transfer involving the consumer's account only if the financial institution has provided the disclosures required by 205.7(b)(1), (2), and (3). A financial institution does not have an agreement for purposes of 205.11(c)(4)(ii) solely because it participates in transactions that occur under the federal recurring payments programs, or that are cleared through an ACH or similar arrangement for the clearing and settlement of fund transfers generally, or because it agrees to be bound by the rules of such an arrangement. Prepaid Accounts Under the Electronic Fund Transfer Act (Regulation E) and the Truth In Lending Act (Regulation Z) - Nov. 22, 2016 The Office of the Federal Register publishes documents on behalf of Federal agencies but does not have any authority over their programs. Savings institutions insured under the Savings Association Insurance Fund of the FDIC and federally-chartered savings banks insured under the Bank Insurance Fund of the FDIC (but not including state-chartered savings banks insured under the Bank Insurance Fund). (iv) Provides the consumer with confirmation of the consumer's consent in writing, or if the consumer agrees, electronically, which includes a statement informing the consumer of the right to revoke such consent. 1. See also comment 17(b)6, which describes how an institution obtains a consumer's affirmative consent. (1) Notice. However, electronic disclosures made available on a person's Web site that may or may not be accessed by the consumer are not provided to the consumer and therefore would not satisfy the prior-to-purchase requirement. "Published Edition". Preauthorized transfers exempt under this paragraph (c)(7) remain subject to 205.10(e) regarding compulsory use and sections 915 and 916 of the act regarding civil and criminal liability. 1. 3. 4, 2001; 71 FR 1659, Jan. 10, 2006; 71 FR 51456, Aug. 30, 2006; 71 FR 69437, Dec. 1, 2006; 72 FR 51450, Aug. 30, 2006; 74 FR 59053, Nov. 17, 2009]. You can learn more about the process 3501 et seq. iii. 11(c) Time Limits and Extent of Investigation. The institution may provide either: i. In addition, if a consumer attempts to engage in a transaction with a gift certificate, store gift card, or general-use prepaid card, but the transaction cannot be completed due to technical or other reasons, such attempt does not constitute activity. The card meets the definition of store gift card and is therefore subject to 205.20, unless a different exclusion applies. Foreign-initiated transfers. Inactive accounts. (See also comment 2(m)5. (ii) The consumer may notify the institution in person, by telephone, or in writing. We must allow you to report an error until 60 days after the earlier of the date you electronically access your account, if the error could be viewed in your electronic history, or the date we sent the FIRST written history on which the error appeared. Changes not requiring notice. When a consumer notifies the service provider of an error, the EFT service provider must investigate and resolve the error in compliance with 205.11 as modified by 205.14(b)(2). A financial institution may use commonly accepted or readily understandable abbreviations in complying with the disclosure requirements of this part. Paragraph 3(c)(6)Telephone-Initiated Transfers. Rather, the rule simply prohibits institutions from considering the consumer's decision not to opt in when deciding whether to pay overdrafts for checks, ACH transactions, or other types of transactions. (e) Exception for receipts in small-value transfers. For an electronic fund transfer initiated by the consumer between two accounts of the consumer in the same institution, documenting the transfer on a periodic statement for one of the two accounts satisfies the periodic statement requirement. 2. A financial institution complies with the rule if it adapts its systems to identify debit card transactions as either one-time or recurring. The consumer and the financial institution (including an account for which an access device has been issued to the consumer, for example); ii. (b) Error resolution notice on periodic statements ( 205.8(b)). The term store gift card in 205.20(a)(2) includes gift certificate as defined in 205.20(a)(1). If the card is stolen and used as a credit card to make purchases or to get cash advances at an ATM from the line of credit, the liability limits and error resolution provisions of Regulation Z apply; Regulation E does not apply. Debits to consumer accounts for group insurance available only through the financial institution and payable only by means of an aggregate payment from the institution to the insurer. The absence of a deposit entry (on a periodic statement sent within two business days of the scheduled transfer date) will serve as negative notice. A retail repurchase agreement (repo), which is a loan made to a financial institution by a consumer that is collateralized by government or government-insured securities. 1. We must hear from you no later than 60 days after you learn of the error. iii. Which do we go with? The preauthorized transfers remain subject to sections 913, 915, and 916 of the act and 205.10(e), and are therefore exempt from UCC Article 4A. Generic descriptions. 2. A financial institution may require the consumer to give written confirmation of an error within 10 business days of an oral notice. Financial institutions that offer telephone-initiated Fedwire payments are subject to the requirements of UCC section 4A202, which encourages verification of Fedwire payment orders pursuant to a security procedure established by agreement between the consumer and the receiving bank. An automated teller machine operator that imposes a fee on a consumer for initiating an electronic fund transfer or a balance inquiry shall: (1) Provide notice that a fee will be imposed for providing electronic fund transfer services or a balance inquiry; and. The consumer does not make any deposits to the account, and no other transactions occur between March 4 and March 8. (ii) Decline to pay checks, ACH transactions, and other types of transactions that overdraw the consumer's account because the consumer has not affirmatively consented to the institution's overdraft service for ATM and one-time debit card transactions. 2. The agency shall verify the identity of the consumer receiving the device by reasonable means before the device is activated. For example, if a consumer is hospitalized and unable to report the loss or theft of an access device, notice is considered given when someone acting on the consumer's behalf notifies the bank of the loss or theft. The requirement to obtain a consumer's authorization to collect a fee via EFT for the return of an EFT or check unpaid applies only to the person that intends to initiate an EFT to collect the returned item fee from the consumer's account. Date. ii. For example, the institution may include a line for a printed name and an account number, as shown in Model Form A9. Nonmember insured banks and insured state branches of foreign banks. Creditors may not require repayment of loans by electronic means on a preauthorized, recurring basis. The exclusion in 205.20(b)(2) applies because policies and procedures reasonably designed to avoid the marketing of the general-purpose reloadable cards as gift cards or gift certificates are maintained, even if a retail clerk inadvertently stocks or a consumer inadvertently places a general-purpose reloadable card on the gift card display. (2) If the transfer would go over the credit limit on your overdraft line. Fedwire and ACH. You may ask for copies of the documents that we used in our investigation. A card, code, or other device initially purchased by a business is subject to this section if the card, code, or other device is purchased for redistribution or resale to consumers primarily for personal, family, or household purposes. There are policies and procedures established to prevent the sale of a certificate or card unless the certificate or card expiration date is at least five years after the date the certificate or card was sold or initially issued to a consumer; or. This restriction does not apply to forms or statements whose use is required or sanctioned by a government agency. (ii) Point-of-sale transactions. An ATM operator that imposes a fee for a specific type of transactionsuch as for a cash withdrawal, but not for a balance inquiry, or for some cash withdrawals, but not for others (such as where the card was issued by a foreign bank or by a card issuer that has entered into a special contractual relationship with the ATM operator regarding surcharges)may provide a notice on or at the ATM that a fee will be imposed or a notice that a fee may be imposed for providing EFT services or may specify the type of EFT for which a fee is imposed. Information obtained from others. 5. (Part 1) Written by Alma Calcano, Regulatory Compliance Specialist, NAFCU NAFCU's compliance team often receives questions related to regulatory requirements for providing change-in-terms disclosures for different credit union products. To impose such liability on the consumer, the institution must have disclosed the potential liability and the telephone number and address for reporting unauthorized transfers. If the institution offers a line of credit subject to the Board's Regulation Z (12 CFR part 226) or a service that transfers funds from another account of the consumer held at the institution to cover overdrafts, the institution must state that fact. ], [Reg. Paragraph 7(b)(2)Telephone Number and Address. and have been assigned OMB No. The institution provides a readily-available telephone line that consumers may call to provide affirmative consent. Permitted fees or charges. [Specify other circumstances (at payee's option). 3. A financial institution need not retain records that it has given disclosures and documentation to each consumer; it need only retain evidence demonstrating that its procedures reasonably ensure the consumers' receipt of required disclosures and documentation. (l) State means any state, territory, or possession of the United States; the District of Columbia; the Commonwealth of Puerto Rico; or any political subdivision of the above in this paragraph (l). Reg. If a card, code, or other device issued in connection with a loyalty, award, or promotional program does not have any fees, the disclosure under 205.20(a)(4)(iii)(D) is not required on the card, code, or other device. Except as provided under paragraph (c) of this section, a financial institution holding a consumer's account shall not assess a fee or charge on a consumer's account for paying an ATM or one-time debit card transaction pursuant to the institution's overdraft service, unless the institution: (i) Provides the consumer with a notice in writing, or if the consumer agrees, electronically, segregated from all other information, describing the institution's overdraft service; (ii) Provides a reasonable opportunity for the consumer to affirmatively consent, or opt in, to the service for ATM and one-time debit card transactions; (iii) Obtains the consumer's affirmative consent, or opt-in, to the institution's payment of ATM or one-time debit card transactions; and. The following examples illustrate the application of the exclusion in 205.20(b)(4). Relationship between 205.9(a)(1) and 205.16. Correction without investigation. 1. 2. Paragraph 20(b)(2)Reloadable and Not Marketed or Labeled as a Gift Card or Gift Certificate. It need not provide a toll-free number or accept collect long-distance calls from outside the area where it normally conducts business. By electronic means. Accounts covered. 2. Same facts as i., and a fee was imposed on January 15 of year two. (a) Receipts at electronic terminalsGeneral. Exclusion explained. Rebate programs operated or administered by a merchant or product manufacturer that provide cards redeemable for or towards goods or services or other monetary value to consumers in connection with the consumer's purchase of a product or service and the consumer's completion of the rebate submission process. (7) Stop payment. Notice to a financial institution by a person acting on the consumer's behalf is considered valid under this section. A financial institution need not provide notice of a transfer if the payor gives the consumer positive notice that the transfer has been initiated. 2. The statement must, however, specify the entity that owns or operates the terminal, plus the city and state. If a fee for an electronic fund transfer or check returned unpaid may be collected electronically in connection with a point-of-sale transaction, the person initiating an electronic fund transfer to collect the fee must post the notice described in paragraph (b)(3)(i) of this section in a prominent and conspicuous location. When the negative balance is attributable in part to an ATM or one-time debit card transaction, and in part to a check, ACH, or other type of transaction not subject to the fee prohibition, the date on which such a fee may be assessed is based on the date on which the check, ACH, or other type of transaction is paid into overdraft. Examples of excluded products. Such policies and procedures may include contractual provisions prohibiting a reloadable card, code, or other device from being marketed or labeled as a gift card or gift certificate, merchandising guidelines or plans regarding how the product must be displayed in a retail outlet, and controls to regularly monitor or otherwise verify that the card, code or other device is not being marketed as a gift card. Paragraph 17(b)(2)Conditioning Payment of Other Overdrafts on Consumer's Affirmative Consent. 2. An institution complies with the confirmation requirement if it has adopted reasonable procedures designed to ensure that overdraft fees are assessed only in connection with transactions paid after the confirmation has been mailed or delivered to the consumer. Security limitations. The institution need only provide telephone service during normal business hours. Regulation E applies to all persons (including branches and other offices of foreign banks located in the United States) that offer EFT services to residents of any state, including resident aliens. Restrictions on certain deposit accounts. If the consumer's delay in notifying the financial institution was due to extenuating circumstances, the institution shall extend the times specified above to a reasonable period. The requirement to disclose any fees assessed against the account does not include a finance charge imposed on the account during the statement period. Written plan or agreement. Notice Comments. We must hear from you no later than 60 days after we sent you the FIRST statement on which the error or problem appeared. iv. Providing a readily available telephone line that the consumer may call to determine whether the transfer occurred and disclosing the telephone number on the initial disclosure of account terms and on each periodic statement. 1. This year, the minimum wage . (1) General. If, however, an institution had no limits in place when the initial disclosures were given and now wishes to impose limits for the first time, it must disclose at least the fact that limits have been adopted. A financial institution may include promotional material on receipts if the required information is set forth clearly (for example, by separating it from the promotional material). A state law that is inconsistent may be preempted even if the Board has not issued a determination. The financial institution may require the consumer to give written confirmation of a stop-payment order within 14 days of an oral notification. Content of notice. The transaction history of the particular account for a reasonable period of time immediately preceding the allegation of error; iii. 2. [Reg. i. E, 61 FR 19669, May 2, 1996, unless otherwise noted. of 1978 is intended to protect individual consumers engaging in electronic fund transfers (EFTs) and remittance transfers. (iii) Delayed compliance date for fee disclosure. The exception for accounts that may be accessed only by preauthorized transfers to the account includes accounts that can be accessed by means other than EFTs, such as checks. Although no particular rules govern type size, number of pages, or the relative conspicuousness of various terms, the disclosures must be in a clear and readily understandable written form that the consumer may retain. See also comment 17(b)7. The financial institution must comply with the error resolution procedures when a consumer properly asserts an error, even if the account has been closed. The term activity means any action that results in an increase or decrease of the funds underlying a certificate or card, other than the imposition of a fee, or an adjustment due to an error or a reversal of a prior transaction. The term electronic promise as used in EFTA Sections 915(a)(2)(B), (a)(2)(C), and (a)(2)(D) means a person's commitment or obligation communicated or stored in electronic form made to a consumer to provide payment for goods or services for transactions initiated by the consumer. Choosing an item from 2. 4. Telephone notice. Clear and conspicuous standard. Except in unusual circumstances, such interpretations will not be issued separately but will be incorporated in an official commentary to this part, which will be amended periodically. If you do not want to use the card, please (destroy it at once by cutting it in half). (d) Transfer types and limitations ( 205.7(b)(4)) . Written confirmation of oral notice. If a financial institution makes a fund transfer to a consumer's account after receiving funds through Fedwire or a similar network, the transfer by ACH is covered by the regulation even though the Fedwire or network transfer is exempt. 2. Compliance with all requirements. A financial institution may comply with the requirement in 205.17(b)(1)(iv) to provide confirmation of the consumer's affirmative consent by mailing or delivering to the consumer a copy of the consumer's completed opt-in notice, or by mailing or delivering a letter or notice to the consumer acknowledging that the consumer has elected to opt into the institution's service. Institutions may, but are not required, to provide a signature line or check box where the consumer can indicate that he or she declines to opt in. Service fees. Paragraph 20(a)(3)General-Use Prepaid Card. An institution that requires written confirmation shall inform the consumer of the requirement and provide the address where confirmation must be sent when the consumer gives the oral notification. The term electronic fund transfer includes: i. 5. (2) Fees imposed. (3) Expiration of additional disclosure requirements. (b) Purpose. However, a financial institution may not limit its investigation solely to the payment instructions where additional information within its own records pertaining to the particular account in question could help to resolve a consumer's claim. Relationship between gift certificate and store gift card. 1. 1. Section 205.14Electronic Fund Transfer Service Provider Not Holding Consumer's Account, 14(a) Electronic Fund Transfer Service Providers Subject to Regulation. 7001 et seq.). Typically, employers and third-party service providers do not meet the definition of a financial institution subject to the regulation because they neither hold payroll card accounts nor issue payroll cards and agree with consumers to provide EFT services in connection with payroll card accounts. Daily or Sustained Overdraft, Negative Balance, or Similar Fee or Charge. However, if an entity that has purchased cards, codes, or other devices for business purposes sells or distributes such cards, codes, or other devices to consumers primarily for personal, family, or household purposes, that entity does not comply with 205.20 if it has not otherwise met the substantive and disclosure requirements of the rule or unless an exclusion in 205.20(b) applies. The error resolution notice must be substantially similar to the model form in appendix A of part 205. A financial institution shall make the disclosures required by this section at the time a consumer contracts for an electronic fund transfer service or before the first electronic fund transfer is made involving the consumer's account. The requirement that preauthorized EFTs be authorized by the consumer only by a writing cannot be met by a payee's signing a written authorization on the consumer's behalf with only an oral authorization from the consumer. Enhanced content is provided to the user to provide additional context. Neither a toll-free number nor a Web site must be maintained or disclosed if no fees are imposed in connection with a certificate or card, and the certificate or card and the underlying funds do not expire. A financial institution shall investigate promptly and, except as otherwise provided in this paragraph (c), shall determine whether an error occurred within 10 business days of receiving a notice of error. A non-reloadable certificate or card that bears an expiration date that is at least seven years from the date of manufacture need not state the disclosure required by 205.20(e)(3)(iii). An institution may use the same or different telephone numbers in the disclosures for the purpose of: i. [Reg. If, however, an institution had no limits in place when the initial disclosures were given and now wishes to impose limits for the first time, it must disclose at least the fact that limits have been adopted. If no physical certificate or card is issued, the disclosures must be provided to the consumer before the certificate or card is purchased. ii. If the change affects only ATM and other EFT withdrawals, you must provide the notice at least 21 calendar days before it takes affect. Under these circumstances, once the card has been fully redeemed and the account credited with the amount of the underlying funds, the five-year minimum expiration term no longer applies to the underlying funds. For direct-deposit-only accounts, a financial institution must send a periodic statement at least quarterly. 1. (i) The consumer's account balance, through a readily available telephone line; (ii) An electronic history of the consumer's account transactions, such as through an Internet Web site, that covers at least 60 days preceding the date the consumer electronically accesses the account; and. Except as provided in paragraph (h), the requirements of this section apply to any gift certificate, store gift card, or general-use prepaid card sold to a consumer on or after August 22, 2010, or provided to a consumer as a replacement for such certificate or card. 1026.9 (c) (2) (i) (A)) requires a creditor to provide 45 days advance notice of a "significant" change in terms. The information-collection requirements have been approved by the Office of Management and Budget under 44 U.S.C. Through December 31, 2007, the notice required to be provided to consumers under paragraph (b)(3)(ii) of this section in connection with a point-of-sale transaction, whether given to the consumer at the time of the transaction or subsequently mailed to the consumer, need not include either the dollar amount of any fee collected electronically for a check or electronic fund transfer returned unpaid or an explanation of how the amount of the fee will be determined. As a 1. See, however, 205.20(b)(3). The appendix contains model disclosure clauses for optional use by financial institutions to facilitate compliance with the disclosure requirements of sections 205.5(b)(2) and (b)(3), 205.6(a), 205.7, 205.8(b), 205.14(b)(1)(ii), 205.15(d)(1) and (d)(2), and 205.18(c)(1) and (c)(2). 5. 1. 2. Forced initiation. If the amount of the fee may vary due to the amount of the transaction or due to other factors, the posted notice may explain how the fee will be determined, but the notice provided to the consumer must state the dollar amount of the fee if the amount can be calculated at the time the notice is provided or mailed to the consumer.
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