The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.
F E D E R A L R E S E R V E B A N K OF D A L L A S S tation K, Dallas, T e x a s 7 5 2 2 2 C ir cul ar No. 84-104 October 26, 1984 TO: All depository i n s t i t u t i o n s Reserve D i s t r i c t ATTENTION: Chief Executive Of fic er SUBJECT: Amendments Transfers DETAILS: The Board of Governors of the Federal Reserve System has adopted amendments to Regulation E t h a t expand the r eg ul at io n coverage, modify i t s e r r o r re so l u t i o n requirements and provide addi ti on al f l e x i b i l i t y in the di sc lo s u r e of charges f o r e l e c t r o n i c fund t r a n s f e r s s e rv i c e s . to Regulation E in the Eleventh Federal — Electronic Fund In approving the amendments to Regulation E, the Board e s t a b l i s h e d October 16, 1984, as the e f f e c t i v e date for amendments t h a t : 1. Extend the e r r o r resolution point-of-sale transactions periods 2. Provide an exception from the provisional r e c r e d i t i n g requirement when a consumer a s s e t account is su bje ct to the Board's Regulation T 3. Provide ad dit io nal f l e x i b i l i t y in the d i sc lo s u r e of charges fo r e l e c t r o n i c fund t r a n s f e r s on periodic statements The not ice also contains several changes o f f i c i a l s t a f f commentary to Regulation E. for to the The Board e s t a b l i s h e d November 16, 1984, as the effective date fo r the l i m i t a t i o n s on consumer l i a b i l i t y for unauthorized t r a n s f e r s r e s u l t i n g from d e b it card t r a n s a c t i o n s t h a t do not involve e l e c t r o n i c terminals a t the time of the t r a n s a c t i o n , and the r e s t r i c t i o n on the u n s o l i c i t e d issuance of d e b i t cards f o r tr a n s a c ti o n s not involving e l e c t r o n i c te rm in als . Banks and others are encouraged to use the following incoming WATS numbers in contacting this Bank: 1-800-442-7140 (intrastate) and 1-800-527-9200 (interstate). For calls placed locally, please use 651 plus the extension referred to above. This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) - 2 - The Board also e s t a b l i s h e d April 16, 1985, as the e f f e c t i v e date f o r a l l oth er requirements of the re g u l a ti o n t h a t are a p p li ca bl e to t r a n s f e r s r e s u l t i n g from d e b i t card t r a n s a c t i o n s t h a t do not involve an e l e c t r o n i c terminal a t the time of the t r a n s a c t i o n . ATTACHMENTS: Board of Governors press r e l e a s e and Federal noti ce summary MORE INFORMATION: Larry C. Ripley, Extension 6290 ADDITIONAL COPIES: Public A f fa i r s Department, Extension 6289 Extension Register 6118; or Jonnie M il l e r , FEDERA^RESERV^pres^2j®22® For immediate r e l e a s e October 15, 1984 The Federal Reserve Board has adopted amendments t o Regulation E-E le c t ro n ic Fund T r a n s f e r s - - t o expand the r e g u l a t i o n ' s coverage, modify i t s e r r o r r e s o l u t i o n requirements, and provide ad di ti on al f l e x i b i l i t y in the d i s c l o s u r e of charges f o r e l e c t r o n i c fund t r a n s f e r s s e r v i c e s . e f f e c t i v e on November 16, 1984. The amendments will become However, f i n a n c i a l i n s t i t u t i o n s have u n t i l April 16, 1985, t o comply with c e r t a i n requirements r e l a t i n g t o t r a n s f e r s r e s u l t i n g from d eb it card t r a n s a c t i o n s t h a t do not involve e l e c t r o n i c te r m in al s. The amendments: Expand coverage to a l l t r a n s f e r s r e s u l t i n g from d e b i t card t r a n s a c t i o n s , including t r a n s a c t i o n s t h a t do not involve an e l e c t r o n i c terminal at the point of s a l e . Extend time periods f o r r e s o l u t i o n of e r r o r s r e s u l t i n g from p o i n t - o f - s a l e d e b i t card t r a n s a c t i o n s . Exempt consumer a s s e t accounts, su b j e ct t o the Board's Regulation T, from provisional r e c r e d i t i n g requi rements. Provide more f l e x i b i l i t y f o r th e d i s c l o s u r e of charges f o r e l e c t r o n i c fund t r a n s f e r s on pe ri odi c statements. A d e b i t card i s one allowing consumers to purchase goods or se rv ic es and t o have t h e amount debited d i r e c t l y t o a checking or o th er t r a n s a c t i o n account (as d i s t i n g u i s h e d from th e use of a c r e d i t ca rd , which r e s u l t s in a promise by th e consumer t o pay f o r a purchase at a f u t u r e tim e) . At t he same time, t h e Board published an update of the o f f i c i a l s t a f f commentary on Regulation E. Summary accounts of th es e ac t i o n s are a tt ac he d. - 0- FEDERAL RESERVE SYSTEM 12 CFR Part 205 [Reg. E; Docket No. R-0502] ELECTRONIC FUND TRANSFERS Final Rule and Update t o O f f i c i a l S t a f f Commentary AGENCY: Board of Governors of the Federal Reserve System. ACTION: Final r u le and o f f i c i a l s t a f f i n t e r p r e t a t i o n . SUMMARY: The Board i s adopting amendments t o Regulation E ( E l e c t r o n ic Fund Transfers) t o : (1) cover, within the d e f i n i t i o n of e l e c t r o n i c fund t r a n s f e r , a l l t r a n s f e r s r e s u l t i n g from de bi t card t r a n s a c t i o n s , including t r a n s a c t i o n s t h a t do not involve an e l e c t r o n i c terminal at the time of the t r a n s a c t i o n ; (2) extend the time periods f o r e r r o r r e s o l u t i o n with respect t o t r a n s f e r s r e s u l t i n g from p o i n t - o f - s a l e t r a n s a c t i o n s ; (3) provide an exception from th e pr ovisional r e c r e d i t i n g requirement when a consumer a s s e t account i s su bj ec t t o the Board's Regulation T; and (4) provide more f l e x i b i l i t y f o r the d i s c l o s u r e of charges f o r e l e c t r o n i c fund t r a n s f e r s on pe r i o d ic st ate m en ts. The no ti ce al s o contains several changes t o the o f f i c i a l s t a f f commentary t o Regulation E. EFFECTIVE DATES: October 16, 1984, fo r the amendments t h a t extend the e r r o r r e s o lu t io n periods fo r p o i n t - o f - s a l e t r a n s a c t i o n s , t h a t except f i n a n c i a l i n s t i t u t i o n s from th e provisional r e c r e d i t i n g requirement when t h e alle ge d e r r o r involves a consumer a s s e t account sub je ct t o Regulation T, and t h a t provide a d d it io n al f l e x i b i l i t y in t he d i s c lo s u r e of charges f o r e l e c t r o n i c fund t r a n s f e r s on pe r i o d i c st at em en ts, and f o r the rev isi on s t o the o f f i c i a l s t a f f commentary. November 16, 1984, for t h e l i m i t a t i o n s on consumer l i a b i l i t y for unauthorized t r a n s f e r s r e s u l t i n g from debit card t r a n s a c t i o n s not involving e l e c t r o n i c ter min als at the time of the t r a n s a c t i o n , and the r e s t r i c t i o n s on the u n s o l i c i t e d issuance of d ebi t cards f o r t r a n s a c t i o n s not involving e l e c t r o n i c terminals. - 2 - April 16, 1985, fo r a l l oth er requirements of the reg ulati on t h a t are appl ica bl e to t r a n s f e r s r e s u l t i n g from debit card t r a n s a c t i o n s t h a t do not involve an e l e c t r o n i c terminal at the time of the t r a n s a c t i o n . FOR FURTHER INFORMATION: Regarding the re gulation and commentary, c on ta ct : Gerald P. Hurst or John C. Wood, Senior Attorneys, Division of Consumer and Community A f f a i r s , Board of Governors of the Federal Reserve System, Washington, D.C. 20551, (202) 452-3667 or (202) 452-2412. an a l y s i s , contact: Regarding t he economic impact Frederick J . S’c hroeder, S t a f f Economist, Division of Research and S t a t i s t i c s , Board of Governors of the Federal Reserve System, Washington, D.C. 20551, (202) 452-2584. SUPPLEMENTARY INFORMATION: General. The E le c t r o n ic Fund T ra ns fe r Act (15 U.S.C. 1693 et s e q .) governs any t r a n s f e r of funds to or from a consumer's a s s e t account t h a t c o n s t i t u t e s an e l e c t r o n i c fund t r a n s f e r (EFT) as defined in th e Act. This s t a t u t e is implemented by the Board's Regulation E (12 CFR Pa rt 205). In January 1984 (49 FR 2204) th e Board proposed an amendment t o Regulation E t o cover fund t r a n s f e r s r e s u l t i n g from d ebi t card t r a n s a c t i o n s t h a t do not involve e l e c t r o n i c term in als but t h a t are processed e l e c t r o n i c a l l y . The Board al so proposed to extend c e r t a i n e r r o r r e s o l u t i o n periods f o r t h es e transfers. In a d d i t i o n , the Board proposed an amendment t h a t would provide f l e x i b i l i t y in the d i s c lo s u r e of e l e c t r o n i c fund t r a n s f e r charges on p e r io d ic statements by allowing d i s c l o s u r e of these charges as a t o t a l amount or on a transaction-by-transaction basis. The Board has now adopted thes e amendments to Regulation E in f i n a l form with c e r t a i n mo di fic ati ons . - 3 - Update t o o f f i c i a l s t a f f commentary. The Board is al s o publishing an update t o the o f f i c i a l s t a f f commentary i n t e r p r e t i n g Regulation E (EFT-2, Supp. II t o 12 CFR Part 205). The changes were published in proposed form on January 12, 1984 (49 FR 2204), and are now being adopted in f i n a l form. This re pr es en ts t h e second p e r io d ic update; t h e f i r s t was published on April 6, 1983 (48 FR 14880). The questions t h a t have been added are s e l f - e x p l a n a t o r y . Some of the revisio ns r e l a t e to the regulatory amendments with respect to d ebi t card t r a n s a ct io n s not involving e l e c t r o n i c te r m i n a l s . The proposed change t o Question 10-19 (regarding a consumer's stop payment order on a preauthorized debit ) has not been adopted, due t o th e lack of support in the comments; e x i s t i n g Question 10-19 remains in e f f e c t . A change has been made t o the commentary t h a t was not contained in t h e proposal: Question 9-36 (regarding i d e n t i f i c a t i o n of the type of t r a n s f e r ) has been expanded to codify a longstanding s t a f f p o s i t i o n ap p li ca b l e to cases in which the amount of the t r a n s f e r r e f l e c t s the value of the goods purchased plus the sum of cash t h a t the consumer received from the merchant. The s t a f f expects t o publish the next proposed update t o the o f f i c i a l s t a f f commentary in November 1984. The public i s i n v i t e d t o i d e n t i f y issues t h a t may warrant in c l u si o n in t h a t proposal; suggested items must be received by November 9, 1984, in order t o assure c o n s i d e ra t i o n . I t i s contemplated t h a t the fi n a l version of the next update will be published in March 1985. [The f u l l t e x t of the no tice i s a v a i l a b l e upon request from the Federal Reserve Banks.]
@FedFRASER