Reg E Questions Flashcards
Reg E Questions
Regulation E implements what Act?
Electronic Funds Transfer Act of 1978
Regulation E establishes
Basic rights and responsibilities of consumers and financial institutions that use electronic funds transfer services.
Regulation E applies to
Debit and credit transactions to demand, savings, or other deposit accounts.
Regulation E applies to a transfer made via ACH where a consumer has provided a check to enable the merchant or other payee to capture the routing, account and serial numbers to initiate the transfer, where the check is
Blank, partially completed, or fully completed and signed, Presented at the point of sale, or is mailed to a merchant or other payee or lockbox and later converted to an EFT, Retained by the consumer, the merchant or other payee, or the payees financial institution.
Regulation E applies to a transfer made via ACH except
Electronic debits and credits to non-consumer accounts.
What disclosures are required by Regulation E?
Initial and Periodic
DFI must send periodic statement information for each monthly statement cycle in which there is electronic transfer activity on the account; when there is no activity, the periodic statement must be sent
Quarterly.
A reversal of a direct deposit to correct an error does not trigger the monthly statement requirement when the error represented a credit to the wrong consumers account, a duplicate credit, or a credit in the wrong amount.
TRUE
According to Regulation E, 1 a computation or bookkeeping error by consumers DFI, 2 Consumers receipt of incorrect amount of money at electronic terminal, and 3 an incorrectly identified entry, are all considered errors. From the list below, what else is considered an error according to Regulation E?
Unauthorized transfer, Incorrect Transfer to or from Consumers account, Transfer not included on a periodic statement
When a consumer discovers an error on their statement, how long do they have to notify the financial institution?
Oral or written notice from consumer must be received no later than 60 days of the transmittal date of the statement in which the error first appeared.
A financial institution may require written notice of error within
10 days of oral notice.
Once a financial institution receives notice, the first step is to determine whether an error occurred; and the financial institution must do so within how many days of receiving notice and must report results to the consumer within how many days. Business or Calendar and number of days
10 business days, 3 business days
If the financial institution determines during the investigation that an error did occur, the financial institution must correct within
1 business day.
If the financial institution is unable to complete the investigation within 10 business days, the institution may take how many days 90 days if not initiated in a state, is a new account, or resulted from a POS debit card transaction from receipt of notice provided they give what including interest within 10 business days of receiving the error notice, informs the consumer within how many days of provisional credit and gives consumer full use of the funds, corrects the error within 1 day of discovery, and reports results to consumer within 3 business days.
45 days, provisional credit, 2 business days
If the financial institution determines there was no error, the financial institution must
Notify consumer within 3 business days, Reverse provision credit with 5-day grace period, Supply consumer with information and documents used to determine there was no error.
The consumer can limit their liability by notifying the financial institution within
2 business days after learning of the loss or theft.
Which of the following is considered a tiers of consumer liability for unauthorized EFTs?
Up to $50, Up to $500, Unlimited amount depending on when the unauthorized EFT occurs
Negligence by the consumer cannot be used as the basis for imposing greater liability than is permissible under Regulation E
TRUE
Consumer behavior that may constitute negligence under state law, such as writing the PIN on a debit card or on a piece of paper kept with the card, does not affect the consumer liability for unauthorized transfers.
TRUE
The extent of the Consumers liability is determined solely by the Consumers promptness in reporting the loss or theft of an access device.
TRUE
An agreement between the consumer and an institution may impose greater liability on the consumer for unauthorized transfer than the limits provided in Regulation E.
FALSE
The two-business day period for a consumer to be able to limit their liability does not include the day the consumer learns of the loss or theft or any day that is not a business day.
TRUE
If the consumer notifies the financial institution of the loss or theft of the access device within the required time frame the Consumers liability will not exceed the lesser of $500 or the sum of
$50 or the amount of the unauthorized transfers that occur within the two business days, whichever is less.
Sally is on vacation and her access device is stolen on Monday. Sally uses cash for most of her purchases and does not realize the access device is missing until Thursday morning. Sally reports the loss to her financial institution on Friday. On Monday and Tuesday, the thieves spent more than $1,500 and after that there are no more transactions. What will Sallys loss be?
$50
Sally is on vacation and her purse is stolen on Monday around 2:00 p.m. After Sally reports the loss to the police, she notifies her financial institution of the theft around 3:00 p.m. The thieves were only able to spend $25
$25
Sallys debit card is stolen on Monday, and she learns of the theft that same day. However, Sally does not contact her institution until Friday. Which tier of liability applies?
Up to $500
Sallys access device is stolen on Monday, and she learns of theft that same day. However, Sally does not contact her institution until Friday and a $100 unauthorized transfer was made on Tuesday and a $600 unauthorized transfer was made on Thursday. Because the consumer is liable for the amount of the unauthorized transfers that occur within the first two business days but no more than $50, plus the amount of the unauthorized transfers that occurs after the first two business days and before the consumer gives notice, what is Sallys liability?
$500
Sallys access device is stolen on Monday, and she learns of theft that same day. However, Sally does not contact her institution until Friday and a $600 unauthorized transfer was made on Tuesday and a $100 unauthorized transfer was made on Thursday. Because the consumer is liable for the amount of the unauthorized transfers that occur within the first two business days but no more than $50, plus the amount of the unauthorized transfers that occurs after the first two business days and before the consumer gives notice, what is Sallys liability?
$150
A financial institution is considered to have received notice for purposes of limiting the Consumers liability if notice is given in a reasonable manner, even if the consumer notifies the institution but uses an address or telephone number other than the one specified by the institution.
TRUE
In what year was the Electronic Funds Transfer Act written?
1978
Which part of Title 12 of the Code of Federal Regulations is Regulation E?
205
Under Regulation E, which of the following is a business day?
Any day of the week the institution is open for carrying on substantially all business functions
Which of the following entities is given the authority to enact the provisions of the Electronic Funds Transfer Act?
CFPB
Which of the following does Regulation E not exclude from coverage?
Point of Purchase ACH transactions
Which of the following is not a requirement relating to the form of the Regulation E disclosures?
Printed in 12 point sized New Times Roman font
At what time on the second banking day after learning of the loss of the card must the consumer give notice?
11:59 p.m.
Which of the following is not an example of an electronic terminal as defined by Regulation E?
Telephone
What is the asset size found in Regulation E for a financial institution to be considered a small financial institution and, therefore, not subject to some portions of the Regulation?
$100 Million
Which of the following is not required to be included in the Regulation E initial disclosure?
Address of financial institution
What date is required to appear on an electronic terminal receipt?
The date the transfer was initiated
How many days notice is required if the terms of the EFT service will change that provides greater liability for the consumer?
21 days
Where is the shortened version of the financial institutions Error Resolution Notice supposed to appear if the financial institution chooses not to send out the annual full version of this notice?
Consumers periodic statement
Which of the following is not a notification option to be used by a financial institution for preauthorized credit transfers?
Providing the periodic statement is sufficient notification
