Regulation E

Question 1

Coverage of Reg E

Answer 1

Consumer purpose (if business and personal, can always disclose. When in doubt, disclose.)

• Any transfer of funds initiated through an electronic terminal, telephone, computer, or magnetic tape
• for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit an account

Question 2

Exceptions to Reg E

Answer 2

• Wire transfers
• Preauthorized agreements (to make transfers between accounts, pay loans at the same bank or between accounts of family members) are not EFTs

Question 3

Disclosures Required by Reg E

Answer 3

Change in terms notice

• must be given before the adverse change is taken or a fee increases
• 21 days prior written notice is required

Error resolution notice
- 2 options: (1) provided once per year (2) included with monthly statement (usually on back of statement)

ATMs must post a notice of any fee imposed for use

• on screen and on or at the machine itself
• amount of fee must appear on-screen or on paper before charged

Receipt must be given or made available at an electronic terminal (ATM/POS) (optional to user unless transaction is $15 or less. Don’t need to provide it if $15 or less)

Question 4

Periodic Statement - Reg E

Answer 4

• unlike Reg DD, they are mandatory if the account is able to be accessed via EFT
• one must be provided at least quarterly and in each monthly in which a transaction occurred

Question 5

Preauthorized Transactions - Reg E

Answer 5

Credits

• there are no special requirements here for notification

Debits
- written authorization is required (from someone) before these transactions can begin (should come from an account holder)

• customers do have the right to stop payment on them (make sure you understand what the customer wants to stop (one time vs continuing))

Question 6

Overdraft Fees Opt-In - Reg E

Answer 6

Provide opt-in before assessing overdraft fees

• unless notice was given before assessing fee, consumer affirmatively consents
• can still pay overdrafts, just can’t charge for the service until they opt in

Cannot make terms or conditions of account dependent on whether the consumer opts in

Question 7

Error Resolution Procedures -Reg E

Answer 7

1) all disputed transactions are considered unauthorized until demonstrated otherwise - go through procedure and document every time
2) notice of unauthorized transaction must come from customer within 60 days of when periodic statements containing transactions was delivered
3) from date of notice, error must be resolved or provisional credit to the account must occur within 10 business days (20 days for new accounts)

4) final resolution must occur within 45 calendar days (90 for POS or foreign ATM transaction and for new accounts)
- provisional credit is final at this time

Question 8

“New Account” definition - Reg E

Answer 8

New account under Reg E is an account that is less than 30 days old

Question 9

Consumer Liability - Reg E

Answer 9

1) None if proper disclosure was not given originally

2) $50 base liability (unauthorized, get money back except $50)
- this is often waived by contract with Visa/MasterCard

3) customer must notify bank within 2 days of discovering loss or theft of device or face $500 liability
4) customer must notify bank within 60 days of delivery (when it left bank) of the periodic statement containing the transaction or face unlimited liability for the transactions after that

Question 10

Foreign Remittance Transfers Coverage - Reg E

Answer 10

Protects consumers who send money electronically to foreign countries

1) more than $15
2) made by a consumer in the US
3) sent to a person or company in foreign country
4) includes many types of transfers (ACH, wires, etc)

Question 11

Foreign Remittance Transfers Disclosures - Reg E

Answer 11

Must be provided to consumer before paying a remittance transfer fee

Must include:

1) exchange rate
2) fees (some are optional)
3) amount of money to be delivered

Must also provide receipt or proof of payment that repeats the information in the first disclosure. Receipt must also tell consumers the date the money will arrive

Question 12

Foreign Remittance Transfers - other - Reg E

Answer 12

1) consumers get 30 minutes (or more) to cancel a transfer
- can get their money back if they cancel

2) companies must investigate if a consumer reports a problem with a transfer
- certain errors, consumers can get refund or transfer without charge if the money didn’t arrive as promised

3) companies are responsible for errors made by employees