Full text of District Notices (Federal Reserve Bank of Dallas) : Regulation E - Official Staff Commentary, Circular No. 81-188

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federal reserv e

Bank o f Dallas

DALLAS, TEXAS

7S222

Circular No. 81-188
September 25, 1981

REGULATION E
OFFICIAL STAFF COMMENTARY
Electronic Fund Transfers

TO ALL MEMBER BANKS
AND OTHERS CONCERNED IN THE
ELEVENTH FEDERAL RESERVE DISTRICT:
The Board o f Governors
available an o fficia l s ta ff commentary
The interpretation takes the form of
requirements applicable to electronic
accounts. The e ffe c tiv e date o f the

of the Federal Reserve System has made
on Regulation E, Electronic Fund Transfers.
questions and answers about the regulatory
fund transfers to or from consumer asset
commentary is September 24, 1981.

Printed on the following pages are copies o f the Board's press release
dated September 17, 1981, and supplementary information regarding the com ­
mentary. The com plete tex t o f the commentary and o f this circular may be
obtained by request to the Department of Communications, Financial and
Community Affairs, Extension 6289.
Any questions relating to Regulation E should be directed to this Bank's
Legal Department, Extension 6171.
Sincerely yours,

William H. Wallace
First Vice President
Enclosure

Banks and others are encouraged to use the following incoming W A T S 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)

FEDERAL RESERVE press release
For immediate release

September 17, 1981

The Federal Reserve Board today made available an official staff
commentary on Regulation E, which implements the Electronic Fund Transfers
Act.
As directed by the Act, the Board adopted implementing regulatory
rules in 1979 and 1980.

The commentary, in the form of questions and

answers, deals with all sections of Regulation E.

The commentary was adopted

after consideration of comment received on a proposed commentary.
The attached summary of the commentary notes three points on which
the staff will seek interpretations by the Board in the near future, and
describes some of the principal positions taken by the staff interpretation.
The questions and answers are intended to minimize compliance
burdens and set objective standards for both compliance and enforcement.
Providers of electronic transfer services that conform to the staff
interpretation are protected from civil liability.
The EFT Act protects consumers in their use of electronic transfer
of funds.

Electronic transfer services permit consumers to transfer funds

without the use of checks.

Such services, which may involve the use of an

EFT card, permit consumers to withdraw cash from their accounts at
automated teller machines, and to debit their accounts at the point of sale
for purchases of goods and services.
The text of the commentary may be obtained from the Federal
Reserve Board or the Federal Reserve Banks.

FEDERAL RESERVE SYSTEM
12 CFR P a rt 205
Reg. E; EFT-2
ELECTRONIC FUND TRANSFERS
O f f i c i a l S t a f f Commentary
AGENCY:

Board o f Governors of t h e Federal Reserve System.

ACTION:

O fficial s t a f f in te rp r e ta tio n .

SUM ARY: In accordance w ith 12 CFR 2 0 5 . 1 3 ( b ) , t h e Board s t a f f i s p u b l i s h i n g ,
M
in f i n a l form, t h e o f f i c i a l s t a f f commentary on R egulation E, E l e c t r o n i c Fund
T r a n s f e r s . This i n t e r p r e t a t i o n t a k e s t h e form o f q u e s t i o n s and answers about
t h e r e g u l a t o r y re q u irem en ts a p p l i c a b l e t o e l e c t r o n i c fund t r a n s f e r s t o o r from
consumer a s s e t a c c o u n ts . I t i s desig ned t o f a c i l i t a t e compliance and, because
i t i s an 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 , p ro vid e s p r o t e c t i o n f o r f i n a n c i a l
i n s t i t u t i o n s t h a t o f f e r EFT s e r v i c e s and t h a t a c t in con form ity with i t .
EFFECTIVE DATE:

September 24, 1981.

FOR FURTHER INFORMATION CONTACT: John C. Wood, Sen ior A tto rn e y , o r J e s s e B.
F i l k i n s , Gerald H u r s t, o r Rugenia S i l v e r , S t a f f A t t o r n e y s , D iv ision o f Con­
sumer and Community A f f a i r s , Board o f Governors o f t h e Federal Reserve System,
Washington, D.C. 20551 (202-452-3867).
SUPPLEMENTARY INFORMATION: (1) G e n era l. R egulation E (12 CFR P a rt 205) imple­
ments t h e E l e c t r o n i c Fund T r a n s f e r Act (15 U.S.C. 1693 e t s e q . ) . The r e g u l a t i o n
was p u b lish e d in s t a g e s . Rules governing u n s o l i c i t e d is su a n c e and l i a b i l i t y were
p u b lis h e d in March 1979 (44 FR 18468) and became e f f e c t i v e on March 30, 1979.
S e c tio n s d e a l in g with d i s c l o s u r e s about account term s and c e r t a i n o t h e r m a tte r s
were p u b lish e d in October 1979 (44 FR 59464) and became e f f e c t i v e on May 10,
1980. The f i n a l p o r t i o n s — on documentation o f t r a n s f e r s , e r r o r r e s o l u t i o n ,
and o t h e r s u b j e c t s - - were p u b lis h e d in February 1980 (45 FR 8248); th e y to o
became e f f e c t i v e in May 1980.
The Board s t a f f ' s commentary a d d re s s e s t h e r e g u l a t i o n ' s v a rio u s
r e q u ir e m e n ts , and i s desig ned t o make compliance e a s i e r by p ro v id in g s p e c i f i c
an sw e rs , in n on te c h n ica l la n g ua ge, t o commonly asked q u e s t i o n s . I t f i n a l i z e s
a proposal p u b lis h e d in October 1980 (45 FR 66349).
The s t a f f has sought t o p rov id e i n t e r p r e t a t i o n s t h a t minimize compli­
ance b u rde ns, t o t h e e x t e n t p e rm itt e d by t h e a c t and r e g u l a t i o n , w ithout g iv in g
up im portant consumer p r o t e c t i o n s . Where p o s s i b l e , t h e commentary a l s o s e t s
o b j e c t i v e s ta n d a r d s so t h a t both f i n a n c i a l i n s t i t u t i o n s and t h e i r enforcement
a g e n c ie s can more e a s i l y dete rm in e w hether, and how, t h e r e g u l a t i o n a p p l i e s t o
certain tra n s fe rs.
I t t a k e s t h e p la c e of in d i v i d u a l re spo n ses t o i n q u i r i e s .
Because i t i s an 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 , i t p ro v id e s p r o t e c t i o n under
§ 915(d) o f t h e a c t from c i v i l l i a b i l i t y f o r i n s t i t u t i o n s t h a t a c t in conformity
w ith i t .

- 2 The commentary c o v e rs a l l s e c t i o n s o f t h e r e g u l a t i o n e x c e p t § 2 0 5 .1 ,
which i s s e l f - e x p l a n a t o r y . The q u e s t i o n s a r e i d e n t i f i e d by hyphenated numbers:
t h e f i r s t p a r t i n d i c a t e s t h e r e g u l a t o r y s e c t i o n ; t h e second p a r t , t h e o r d e r of
sequence f o r a p a r t i c u l a r q u e s t i o n i n t h a t s e c t i o n . For exam ple , 9-10 i n d i c a t e s
t h e t e n t h q u e s t i o n i n § 2 0 5 .9 . C a t c h l i n e s have been added t o make i t e a s i e r
f o r u s e r s t o l o c a t e r e l e v a n t q u e s t i o n s . R eferen c e s t o t h e s p e c i f i c s e c t i o n s
o f R eg u la tio n E (a n d , in some c a s e s , t h e E l e c t r o n i c Fund T r a n s f e r Act) a r e
in c lu d e d a t t h e end o f ' e a c h answer.
There has been c o n s i d e r a b l e r e a r r a n g i n g o f t h e sequence o f t h e q u e s ­
t i o n s ( p a r t i c u l a r l y i n § 2 0 5 .9 on docum entation o f t r a n s f e r s ) . As a c o n se q u e n c e ,
t h e numbers in t h e f i n a l v e r s i o n do n o t n e c e s s a r i l y conform t o t h e numbers used
in t h e p r o p o s a l . The in dex a t t h e end should e n a b l e u s e r s o f t h e commentary t o
lo cate sp ec ific in te rp re ta tio n s .
A number o f t h e q u e s t i o n s and answers in t h e commentary have been
m o d if ie d in l i g h t o f t h e comments on t h e proposed v e r s i o n . Some o f t h e q u e s ­
t i o n s t h a t were s e t f o r t h in t h e pro po sal have been d e l e t e d as s e l f - e v i d e n t o r
moot; and some new q u e s t i o n s have been added.
(2)
Items f o r Board c o n s i d e r a t i o n . To t h e e x t e n t t h a t p a r t i c u l a r
q u e s t i o n s could be d e a l t with a t t h e s t a f f l e v e l , t h e s t a f f has d is p o s e d o f
them in t h e commentary. At l e a s t t h r e e a r e a s , however, r e q u i r e Board a c t i o n
and w i l l be p r e s e n t e d f o r i t s c o n s i d e r a t i o n i n t h e n e x t s i x weeks o r s o . They
r e l a t e t o (1) t h e a p p l i c a t i o n o f t h e r e g u l a t i o n t o c e r t a i n small i n s t i t u t i o n s
t h a t p a r t i c i p a t e in t h e f e d e r a l g ov e rn m e n t's d i r e c t d e p o s i t program but do n o t
o f f e r o t h e r EFT s e r v i c e s co vered by t h e r e g u l a t i o n , (2) m o d i f i c a t i o n o f c e r t a i n
r e q u ir e m e n ts f o r i n s t i t u t i o n s t h a t o f f e r EFT s e r v i c e s i n t e r n a t i o n a l l y , and
(3) a p a r t i a l exemption from t h e p e r i o d i c s t a t e m e n t re q u ire m e n ts f o r s a v in g s
a c c o u n ts t h a t a r e a c c e s s i b l e by i n t r a - i n s t i t u t i o n a l t e l e p h o n e t r a n s f e r s . These
a r e summarized below.
Federal r e c u r r i n g t r a n s f e r s completed by p a p e r . Payments under t h e
f e d e r a l g o v e rn m e n t's r e c u r r i n g payment program a r e g e n e r a l l y s e n t v i a t h e a u t o ­
mated c l e a r i n g house system (ACH). In some c a s e s , t h e s e t r a n s f e r s a r e s e n t v ia
t h e ACH t o an i n s t i t u t i o n ' s c o r r e s p o n d e n t bank, which t h e n sends a pa p er l i s t i n g
o f r e c i p i e n t s and payment amounts t o t h e a c c o u n t - h o l d i n g i n s t i t u t i o n .
It is
argued t h a t i n s t i t u t i o n s which r e c e i v e t h e s e t r a n s f e r s in pa per form sh o u ld n o t
be s u b j e c t t o t h e r e g u l a t i o n . This r e s u l t cannot be accomplished by i n t e r p r e t a ­
t i o n , however, b ecause o f t h e d e f i n i t i o n o f e l e c t r o n i c fund t r a n s f e r , which
f o c u s e s on how t h e t r a n s f e r i s i n i t i a t e d .
The Board does have t h e a u t h o r i t y , however, t o c r e a t e e x c e p t i o n s t h a t
a l l e v i a t e burdens f o r small i n s t i t u t i o n s .
I t c o u l d , f o r exam ple, c r e a t e a
narrow exemption f o r i n s t i t u t i o n s t h a t r e c e i v e r e c u r r i n g t r a n s f e r s in paper
form th ro u gh c o r r e s p o n d e n t b an k s. The pro po sal t h a t i s being developed f o r t h e
B o a r d 's c o n s i d e r a t i o n would be a v a i l a b l e o nly t o an i n s t i t u t i o n t h a t does not
o f f e r o t h e r e l e c t r o n i c t r a n s f e r s e r v i c e s — automated t e l l e r s o r t e l e p h o n e b i l l
payment, f o r example - - s i n c e i n s t i t u t i o n s t h a t o f f e r such s e r v i c e s a r e s u b j e c t
t o t h e r e g u l a t i o n i n any c a s e . There a l s o i s l i k e l y t o be an a s s e t s i z e l i m i t a ­
t i o n f o r any exemption p ro p o s e d , s i m i l a r t o t h e l i m i t a t i o n i n R eg u la tio n D with
resp ect t o reserv e requirem ents.

- 3 S p e c i f i c d a t a t h a t would s u p p o rt an exemption f o r small i n s t i t u t i o n s
can be s u b m itte d i f and when t h e Board i s s u e s a pro p o sal f o r p u b l i c comment.
I n t e r n a t i o n a l t r a n s f e r s . P r o v i d e r s o f e l e c t r o n i c fund t r a n s f e r
s e r v i c e s who f u n c t i o n i n an i n t e r n a t i o n a l environment e n c o u n t e r c e r t a i n d i f f i ­
c u l t i e s in complying w ith t h e r e g u l a t i o n .
In p a r t i c u l a r , t h e re q u ire m e n ts
re g a r d i n g te r m in a l r e c e i p t s and t h e tim e l i m i t s f o r e r r o r r e s o l u t i o n p r e s e n t
s e r i o u ? proble ms. M o d if ic a tio n o f t h e s e and o t h e r re q u ire m e n ts may be p o s s i b l e
which would f a c i l i t a t e c o m p lia n c e, w h ile r e t a i n i n g b a s i c p r o t e c t i o n s f o r c on ­
sum ers.
Telephone t r a n s f e r s between s a v in g s and t r a n s a c t i o n a c c o u n t s . A l a r g e
number o f mutual s a v in g s banks o f f e r t e l e p h o n e b i l l payment s e r v i c e s th rough
a t r a n s a c t i o n a c c o u n t . They a l s o p e rm it t h e consumer t o i n i t i a t e t r a n s f e r s by
t e l e p h o n e , between t h a t t r a n s a c t i o n account and a s a v in g s account a t t h e same
i n s t i t u t i o n . Under t h e r e g u l a t i o n , both a c c o u n ts a r e c u r r e n t l y s u b j e c t t o t h e
p e r i o d i c s ta t e m e n t r e q u i r e m e n t s . An a s s o c i a t i o n f o r mutual s a v in g s banks has
p e t i t i o n e d t h e Board f o r an e x c e p t i o n from t h e p e r i o d i c s ta t e m e n t r e q u i r e m e n t s ,
so t h a t t h e f i n a n c i a l i n s t i t u t i o n might s a t i s f y t h e re q u ire m e n ts by p r o v id i n g
a s ta t e m e n t t h a t complies with t h e r e g u l a t i o n f o r t h e t r a n s a c t i o n , but not t h e
s a v i n g s , account i n such an a rra n g e m e n t. Savings a c c o u n ts would c o n t i n u e t o
r e c e i v e t h e t r a d i t i o n a l p e r i o d i c s t a t e m e n t s o r passbook u p d a t e s . This i s s u e
w i l l a l s o be p r e s e n t e d t o t h e Board.
(3)
P o s i t i o n s t a k e n i n t h e commentary. A number o f i s s u e s in t h e
commentary w a rra n t m e n tio n . They a r e d i s c u s s e d below, in seq ue nc e.
Home-banking t e r m i n a l s . (Q. 2-23) A number o f f i n a n c i a l i n s t i t u ­
t i o n s a r e o f f e r i n g home-banking s e r v i c e s — under e x p e r im e n ta l p i l o t pro g ram s,
i n many c a s e s - - b y means o f t e l e v i s i o n s e t s and home computers t h a t a r e li n k e d
t o t h e i n s t i t u t i o n ' s own computer sy ste m . The systems c u r r e n t l y in o p e r a t i o n
do not p ro v id e p r i n t e r s t h a t can g e n e r a t e t e r m i n a l r e c e i p t s , and t h e c o s t o f
doing so a p p a r e n t l y would be p r o h i b i t i v e .
The commentary t a k e s t h e p o s i t i o n t h a t t h e Jiome banking equip m ent,
l i k e t e l e p h o n e s (which a r e e x p r e s s l y e x clu ded by t h e r e g u l a t i o n ) , i s not an
e l e c t r o n i c t e r m i n a l f o r p u rposes o f t h e r e g u l a t i o n , and t h u s i s not s u b j e c t
t o t h e r e c e i p t r e q u i r e m e n t . The t r a n s f e r s i n i t i a t e d by means o f home banking
e q u ipm e nt, however, a r e s u b j e c t t o a l l t h e o t h e r r e g u l a t o r y p r o v i s i o n s .
Telephone t r a n s f e r p l a n s . (Q. 3-1 7 ) The commentary l i m i t s t h e a p p l i ­
c a t i o n o f t h e r e g u l a t i o n t o t e l e p h o n e t r a n s f e r p la n s o r agreements t h a t a r e
in w r i t i n g . This r u l e i s analogous t o t h e r u l e which l i m i t s R e g u la tio n Z
c o v erag e t o w r i t t e n c r e d i t a g re em e n ts.
Telephone t r a n s f e r s under informal arran g em ents have r e p r e s e n t e d a
major s o u rc e o f u n c e r t a i n t y f o r i n s t i t u t i o n s t h a t do not o f f e r t e l e p h o n e t r a n s ­
f e r p la n s but t h a t do, from tim e t o t i m e , allo w custo m ers t o i n i t i a t e t r a n s f e r s
by t e l e p h o n e . The s t a f f i n t e r p r e t a t i o n s e t s a c l e a r r u l e t h a t sh ou ld e l i m i n a t e
c o n f u s io n about what t r a n s f e r s a r e covered by e x c l u d in g such s i t u a t i o n s from t h e
reg u latio n .

- 4 Advance d i s c l o s u r e s . (Q. 7 -1 ) The r e g u l a t i o n r e q u i r e s t h a t d i s ­
c l o s u r e s be given a t t h e tim e t h e consumer c o n t r a c t s f o r an e l e c t r o n i c fund
t r a n s f e r s e r v i c e o r b e f o r e t h e f i r s t e l e c t r o n i c t r a n s f e r i s made t o o r from
t h e c o nsu m er's a c c o u n t . Some i n s t i t u t i o n s g ive b la n k e t d i s c l o s u r e s t o a l l
t h e i r custom ers w hether o r not th e y have c o n t r a c t e d f o r an EFT s e r v i c e - ­
when a c c o u nts a r e e s t a b l i s h e d , f o r example. There has been u n c e r t a i n t y about
w h eth er t h e s e d i s c l o s u r e s s a t i s f y t h e d i s c l o s u r e re q u ire m e n ts w ith r e s p e c t t o
non-EFT customers who, months l a t e r , s ig n up f o r an EFT s e r v i c e e i t h e r d i r e c t l y
w ith t h e f i n a n c i a l i n s t i t u t i o n t h a t gave t h e d i s c l o s u r e s o r with a t h i r d p a r t y
( f o r exam ple, an employer f o r t h e d i r e c t d e p o s i t o f p a y r o l l , o r an in s u r a n c e
company f o r t h e a u to m a tic d e b i t i n g o f premiums).
The s t a f f commentary seeks t o minimize t h e paperwork burden by p r o v i ­
d in g t h a t advance d i s c l o s u r e s s a t i s f y t h e d i s c l o s u r e r e q u ire m e n ts with re g a rd
t o p r e a u t h o r i z e d t h i r d - p a r t y t r a n s f e r s . Thus, t h e i n s t i t u t i o n need not g iv e
d i s c l o s u r e s anew when a consumer, who has not p r e v i o u s l y been r e c e i v i n g EFT
s e r v i c e , c o n t r a c t s f o r t h e s e t r a n s f e r s . Without t h i s i n t e r p r e t a t i o n , t h e
i n s t i t u t i o n would have t o m o n ito r ACH t r a n s f e r s c l o s e l y t o make s u re t h a t
d i s c l o s u r e s a r e given i f and when consumers e n t e r i n t o c o n t r a c t s with t h i r d
p arties.
Under t h e s t a f f i n t e r p r e t a t i o n , t h e f i n a n c i a l i n s t i t u t i o n g e n e r a l l y
remains s u b j e c t t o g iv in g d i s c l o s u r e s c l o s e t o t h e tim e o f c o n t r a c t f o r EFT
s e r v i c e s t h a t i t p r o v id e s d i r e c t l y - - such as t e l e p h o n e b i l l payment o r a u t o ­
mated t e l l e r s e r v i c e s .
D i s c l o s u r e of t e l e p h o n e numbers. (Q. 7-20) C e r t a i n r e q u i r e d d i s c l o ­
s u r e s in v o lv e t e l e p h o n e numbers. The commentary f a c i l i t a t e s compliance by
providi-ng t h a t i n s t e a d o f l i s t i n g a s p e c i f i c t e l e p h o n e number, a f i n a n c i a l
i n s t i t u t i o n may r e f e r t h e consumer t o a t e l e p h o n e number t h a t i s r e a d i l y a v a i l ­
a b l e t o t h e consumer - - such as a number t h a t i s given on t h e i n s t i t u t i o n ' s
p e r i o d i c s t a t e m e n t s . This p r o v i s i o n w i l l b e n e f i t i n s t i t u t i o n s t h a t have m u l t i p l e
branch o f f i c e s and t h a t p r e f e r t o m a in ta in d e c e n t r a l i z e d o p e r a t i o n s f o r e r r o r
r e s o l u t i o n , v e r i f i c a t i o n o f d e p o s i t , e t c . This i n t e r p r e t a t i o n does not ap p ly
t o t h e t e l e p h o n e number f o r r e p o r t i n g l o s t o r s t o l e n a c c e s s d e v i c e s ; in t h i s
c a s e , t h e i n s t i t u t i o n must c o n t i n u e t o giv e a s p e c i f i c t e l e p h o n e number on o r
w ith t h e d i s c l o s u r e s .
P r e - e x i s t i n g a u t h o r i z a t i o n . (Q. 10-17) R eg u latio n E r e q u i r e s a w r i t t e n
a u t h o r i z a t i o n f o r e l e c t r o n i c fund t r a n s f e r s from a c o n su m er's a c c o u n t , with a
copy given t o t h e consumer. Many e x i s t i n g a u t h o r i z a t i o n s f o r t h e d e b i t i n g of
consumers' acc o u n ts do not s p e c i f y t h a t d e b i t i n g i s t o o ccur by e l e c t r o n i c means.
S t i l l o t h e r s may s p e c i f y t h a t d e b i t i n g w i l l o ccu r by means o f p ap er d r a f t s t o
be i n i t i a t e d by t h e p ay ee. The commentary t a k e s t h e p o s i t i o n t h a t R e g u latio n E
does not r e q u i r e new a u t h o r i z a t i o n s t o be o b ta in e d in t h e s e c a s e s .
This i n t e r p r e t a t i o n w ill b e n e f i t in s u r a n c e companies, and more im por­
t a n t l y t h e i r p o l i c y - h o l d e r s , in a v o id in g u n n e c e s sa ry paperwork and u nin te n d e d
l a p s e s in in s u r a n c e c o v e r a g e . The t r a n s f e r s t h a t o c cu r e l e c t r o n i c a l l y w i l l ,
o f c o u r s e , be s u b j e c t t o t h e r e g u l a t i o n .
*

*

*

*

*

[NOTE: The complete t e x t o f t h e commentary can be o b ta in e d from any Federal
Reserve Bank o r from t h e D iv is io n of Consumer and Community A f f a i r s , Board o f
Governors o f t h e Fe dera l Reserve System, Washington, D. C. 20551.]

12 CFR P a rt 205, EFT-2
OFFICIAL STAFF COM ENTARY
M
O REGULATION E
N
The fo llo w in g i s an 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 o f R egulation E
(12 CFR P a rt 205) is s u e d p u rs u a n t t o § 2 0 5 . 1 3 ( b ) . Sectio n al r e f e r e n c e s a r e t o
th e r e g u l a t i o n o r t h e E l e c t r o n i c Fund T r a n s f e r Act (15 U.S.C. 1693 e t s e q . ) .
Section 205.2 — D e f i n i t i o n s and Rules o f C o n stru ctio n
2-1

Q: Access d e v i c e s .
A:

2-2

pension

When such a ccou n ts a r e e s t a b l i s h e d under a t r u s t agreem ent, as i s
g e n e r a l l y t h e c a s e , th e y a r e exempt from coverage by
§ 205.3(f).
[§ 2 0 5 . 2 ( b ) ]

Q: Escrow a c c o u n t s . Escrow a cco u nts a r e f r e q u e n t l y e s t a b l i s h e d
to
a s s u r e payment o f items such as re a l e s t a t e t a x e s , in s u r a n c e p r e ­
miums, and completion o f r e p a i r s o r improvements; a r e th e y c o n s id e re d
a s s e t accounts ?
A:

2-4

Access d e v ic e s i n c lu d e d e b i t c a r d s , personal i d e n t i f i c a t i o n numbers
(P IN s), te le p h o n e t r a n s f e r and te le p h o n e b i l l payment c o d e s , and
o t h e r means t h a t may be used by a consumer t o i n i t i a t e an e l e c t r o n i c
fund t r a n s f e r . The term does n o t in c lu d e magnetic t a p e s o r o t h e r
d e v ic e s used i n t e r n a l l y by a f i n a n c i a l i n s t i t u t i o n t o i n i t i a t e
e l e c t r o n i c fund t r a n s f e r s . [§ 2 0 5 . 2 ( a ) ( 1 ) ]

Q: P r o f i t - s h a r i n g and pension a c c o u n t s . Are p r o f i t - s h a r i n g and
a cco un ts covered by th e d e f i n i t i o n o f account?
A:

2-3

What a r e some examples o f a c c e s s d e v ic e s ?

No. These funds a r e not consumer a s s e t accounts f o r
purposes o f
t h e r e g u l a t i o n . In an arrangement o f t h i s t y p e , t h e funds a r e not
s o l e l y in t h e consumer's c o n t r o l ; c o n tro l i s shared with a f i n a n c i a l
i n s t i t u t i o n , escrow a g e n t , or o t h e r p a r t y . [§ 2 0 5 .2 (b ) ]

Q: U.S. Savings Bond a c c o u n t s . Is an account t h a t i s e s t a b l i s h e d t o
accumulate funds f o r t h e purchase o f U.S. Savings Bonds s u b j e c t
t o th e r e g u l a t i o n ?
A:

No. Such accounts g e n e r a l l y a r e not e s t a b l i s h e d by o r in t h e c o n tro l
o f t h e consumer, who has merely a u t h o r i z e d t h e purc hase o f bonds in
a given denomination and has s e t th e p e r i o d i c amount t o be w ithh eld
o r t r a n s f e r r e d f o r t h i s pu rpose. [§ 2 0 5 .2 (b ) ]

- 2 Christmas o r v a c a t i o n c lu b a c c o u n t s . Are Christmas c lu b o r v a c a tio n
c lu b a c c ou n ts s u b j e c t t o t h e r e g u l a t i o n ?
Christmas c lu b and v a c a tio n c lu b a c c ou n ts a r e consumer a s s e t a c c o u n t s .
In a g r e a t many c a s e s , however, th e y a r e not s u b j e c t t o t h e r e g u l a t i o n
because a l l e l e c t r o n i c t r a n s f e r s t o and from t h e account have been
a u t h o r i z e d in advance by t h e consumer and a r e t o or from a n o th e r
account o f t h e consumer a t t h e same i n s t i t u t i o n . [§§ 2 0 5.2(b) and
(g ), 205.3(d)]
Business day - s u b s t a n t i a l l y a l l b u s i n e s s f u n c t i o n s . In t h e d e f i n i ­
t i o n o f b u s in e s s d a y , what does " s u b s t a n t i a l l y a l l b u s in e s s f u n c t i o n s "
in c lu d e ?
The ph rase in c l u d e s both t h e p u b lic and t h e b a c k - o f f i c e o p e r a t i o n s
o f t h e i n s t i t u t i o n . For example, i f t h e o f f i c e s o f an i n s t i t u t i o n
a r e open on Saturdays f o r handling some consumer t r a n s a c t i o n s (such
as d e p o s i t s , w ith d r a w a ls , and o t h e r t e l l e r t r a n s a c t i o n s ) , b u t not
f o r perform ing i n t e r n a l f u n c t i o n s (such as i n v e s t i g a t i n g account
e r r o r s ) , th e n Saturday i s not a b u s in e s s day f o r t h a t i n s t i t u t i o n .
In t h i s c a s e , Saturday does not count toward t h e v a r io u s b u s i n e s s day s t a n d a r d s s e t by t h e r e g u l a t i o n f o r r e p o r t i n g l o s t o r s t o l e n
a c c e s s d e v i c e s , r e s o l v i n g e r r o r s , e t c . [§ 2 0 5 . 2 ( d ) ]
Business day - te le p h o n e l i n e . I f an i n s t i t u t i o n makes a te le p h o n e
H ne a v a i l a b l e on Sundays f o r r e p o r t i n g t h e l o s s o r t h e f t o f an
a c c e s s d e v i c e , b u t performs no o t h e r b u s in e s s f u n c t i o n s , i s Sunday
a b u s in e s s day?
No. Mere a v a i l a b i l i t y o f a te le p h o n e l i n e does not s a t i s f y t h e
" s u b s t a n t i a l l y a l l b u s in e s s f u n c t i o n s " s t a n d a r d . [§ 2 0 5 . 2 ( d ) ]
Business day - d u r a t i o n . Does b u s in e s s day r e f e r only t o t h e hours
d u rin g which t h e f i n a n c i a l i n s t i t u t i o n c a r r i e s on s u b s t a n t i a l l y a l l
b u s in e s s f u n c t i o n s ?
For purposes o f t h e v a rio u s b u s in e s s -d a y s ta n d a r d s s e t by t h e regu­
l a t i o n , a b u s in e s s day in c lu d e s t h e e n t i r e 24-hour p e r io d ending
a t m id n ig h t . This means t h a t a n o t i c e s a t i s f i e s t h e time l i m i t s
even i f given o u t s i d e b u s in e s s h o u rs . The r e g u l a t i o n does n o t ,
however, r e q u i r e t h a t te le p h o n e l i n e s be a v a i l a b l e on a 24-hour
b a s i s . [§ 2 0 5 .2 (d ) ]
Business day - s h o r t h o u r s . I f a f i n a n c i a l i n s t i t u t i o n engages in
s u b s t a n t i a l l y a l l b u s in e s s f u n c t i o n s u n t i l 12 noon on Saturdays
in s t e a d o f i t s normal 3 p.m. c l o s i n g , a r e Saturdays b u s in e s s
days?
The f i n a n c i a l i n s t i t u t i o n may d e te rm in e , a t i t s e l e c t i o n , whether
an a b b r e v i a t e d day i s a b u s in e s s day. The r e g u l a t i o n does not
s p e c i f y t h e number of hours t h a t an i n s t i t u t i o n must be open in
o rd e r t o have a b u s in e s s day. [§ 2 0 5 .2 (d ) ]

- 3 2-10

Q: Fund t r a n s f e r - payments in c u r r e n c y . The term e l e c t r o n i c fund
t r a n s f e r e xclu des payments made by c h eck, d r a f t , o r s i m i l a r paper
in s tr u m e n t a t an e l e c t r o n i c t e r m i n a l . What about payments made in
c u rre n c y a t an e l e c t r o n i c t e r m i n a l ?
A:

2-11

Q: Fund t r a n s f e r - d e p o s i t s o f c u r r e n c y , c h e c k s . Does t h e term e l e c t r o n l c fund t r a n s f e r i n c lu d e d e p o s i t s o f c urre nc y and checks a t an
automated t e l l e r machine (ATM)?
A:

2-12

No, because t h e fund t r a n s f e r i s i n i t i a t e d by t h e consumer by paper
means. [§ 2 0 5 .2 ( g ) ]

Q: Fund t r a n s f e r - check t r u n c a t i o n .
covered?
A:

2-15

No, because t h e s e payments t o a c r e d i t o r do not d e b i t o r c r e d i t a
consumer a s s e t a c c o u n t. [§ 2 0 5 . 2 ( g ) ]

Q: Fund t r a n s f e r - withdrawal a t a n o th e r i n s t i t u t i o n . A f i n a n c i a l
i n s t i t u t i o n i s s u e s an i d e n t i f i c a t i o n c ard t o i t s customer f o r use
a t o t h e r f i n a n c i a l i n s t i t u t i o n s . To o b t a i n f u n d s , t h e consumer
p r e s e n t s t h e card and s i g n s a withdrawal a u t h o r i z a t i o n a t t h e remote
f i n a n c i a l i n s t i t u t i o n , which o b t a i n s approval by t e le p h o n e from th e
a c c o u n t-h o l d in g i n s t i t u t i o n b e f o r e d i s b u r s i n g t h e funds t o t h e con­
sumer. The consumer's account 1s memo posted f o r t h e d e s ig n a te d
amount, but d e b i t i n g o f th e consumer's account does not occur u n t i l
t h e a c c o u n t-h o l d in g i n s t i t u t i o n r e c e i v e s t h e sig n ed withdrawal
a u t h o r i z a t i o n . Is t h i s an e l e c t r o n i c fund t r a n s f e r ?
A:

2-14

A d e p o s i t made a t an ATM o r o t h e r e l e c t r o n i c te rm in a l i s an e l e c ­
t r o n i c fund t r a n s f e r f o r purposes o f t h e r e g u l a t i o n i f t h e r e i s a
s p e c i f i c agreement between th e f i n a n c i a l i n s t i t u t i o n and t h e con­
sumer f o r t h e p r o v is io n o f EFT s e r v i c e s t o o r from t h e p a r t i c u l a r
account t o which t h e d e p o s i t i s made. [ § 2 0 5 . 2 ( g ) ; see
§ 2 0 5 . 9 ( b ) ( l ) ( i v ) , f o o t n o t e 4a]

Q: Fund t r a n s f e r - p a y ro ll a l l o t m e n t s t o repay c r e d i t . Does t h e term
e l e c t r o n i c fund t r a n s f e r i n c lu d e p r e a u t h o r i z e d p a y ro ll a l l o t m e n t s
t h a t a r e made d i r e c t l y t o a c r e d i t o r t o repay a c r e d i t e x te n s io n ?
A:

2-13

Payments in c u rre n c y a r e not e l e c t r o n i c fund t r a n s f e r s because th e y
do not d e b i t o r c r e d i t a consum er's a c c o u n t. [§ 2 0 5 .2 ( g ) ]

Are check t r u n c a t i o n systems

No, because t h e fund t r a n s f e r i s i n i t i a t e d by c h eck , d r a f t , o r
s i m i l a r paper in s t r u m e n t . [§ 2 0 5 .2 (g )]

Q: Fund t r a n s f e r - payee in f o r m a t i o n ,
n o n - e l e c t r o n i c form. I f the
payor pro v ides t h e payee in fo rm a tio n (names, account numbers, and
amount o f i n d iv id u a l c r e d i t s ) t o t h e f i n a n c i a l i n s t i t u t i o n holding
t h e p ay ees' acco u nts by means o f a paper l i s t i n g and t h e i n s t i t u t i o n
then p re p a re s MICR-encoded d e p o s i t s l i p s , a r e t h e s e t r a n s f e r s sub­
j e c t to the regulation?
A:

These t r a n s f e r s a re not e l e c t r o n i c fund t r a n s f e r s f o r purposes o f
th e r e g u l a t i o n . [§ 2 0 5 .2 (g ) ]

- 4 2-16

Q:

Fund t r a n s f e r - composite c h e c k s . An employer or o t h e r payor
d e l i v e r s a composite check made payable t o a f i n a n c i a l i n s t i t u t i o n
f o r c r e d i t i n g t o consumers' accounts a t t h e i n s t i t u t i o n . The payee
in fo r m a tio n i s c o n ta in e d on magnetic t a p e . Are t h e s e t r a n s f e r s
subject to th e regulation?

A: No, t h e s e t r a n s f e r s a r e not e l e c t r o n i c fund t r a n s f e r s .
2-17

[§ 2 0 5 . 2 ( g ) ]

Fund t r a n s f e r - ACH. I f t h e f i n a n c i a l i n s t i t u t i o n in q u e s ti o n
2-16 h o ld s only some o f t h e consumers' a c c o u n t s , and forwards t h e
remaining c r e d i t s t o o t h e r i n s t i t u t i o n s via an automated c l e a r i n g
house (ACH), a re t h e subsequent t r a n s f e r s s u b j e c t t o t h e r e g u l a t i o n ?

A:
2-18

Q:

Yes.
The t r a n s f e r s made via t h e ACH a r e e l e c t r o n i c - f u n d t r a n s f e r s
and a r e c o v ered . [§ 2 0 5 . 2 ( g ) ]

Q:

Fund t r a n s f e r - Social S e c u r i t y d e p o s i t s , c o rre sp o n d e n t bank.
Under
t h e U.S. T r e a s u r y 's d i r e c t d e p o s i t program, Social S e c u r i t y b e n e f i t s
a r e s e n t v ia t h e ACH t o t h e consumer's f i n a n c i a l i n s t i t u t i o n . Some
i n s t i t u t i o n s r e c e i v e fund t r a n s f e r s through a c o rre sp o n d e n t bank,
which sends a computer p r i n t - o u t l i s t i n g t h e payees and t h e payment
amounts, t o g e t h e r with a composite check payable t o t h e f i n a n c i a l
i n s t i t u t i o n . Are t h e s e t r a n s f e r s s u b j e c t t o t h e r e g u l a t i o n ?

A: Yes.
T r a n s f e r s made v ia t h e ACH a r e e l e c t r o n i c fund t r a n s f e r s .
[§ 2 0 5 .2 ( g ) ]
NOTE: The Board i s c o n s i d e r i n g a r e g u l a t o r y amendment under i t s
§ 904(c) a u t h o r i t y t h a t , i f a d o p te d , would change t h i s answer in
t h e case o f some i n s t i t u t i o n s . See t h e Supplementary Inform ation
p o r t i o n o f t h i s Federal R e g i s t e r n o t i c e .
,
i

2-19

Q:

Fund t r a n s f e r - p r e a u t h o r i z e d d e b i t s by magnetic t a p e / c o m p o s i t e
check. A company o b t a i n s a u t h o r i z a t i o n from consumers t o d e b i t
t h e i r accounts p e r i o d i c a l l y . The f i n a n c i a l i n s t i t u t i o n d e b i t s t h e
consumers' accounts in accordance with b i l l i n g in fo r m a tio n c o n ta in e d
on magnetic t a p e provided by t h e payee, and sends t h e payee a com­
p o s i t e check. Are t h e s e t r a n s f e r s s u b j e c t t o t h e r e g u l a t i o n ?

A: Yes, th e y a r e e l e c t r o n i c fund t r a n s f e r s .
2-20

[§ 2 0 5 . 2 ( g ) ]

Q:

Fund t r a n s f e r - p r e a u th o r iz e d d e b i t s by paper d r a f t s , ACH. A con­
sumer a u t h o r i z e s a company t o d e b i t an account a u t o m a t i c a l l y f o r
a payment. The company p r e s e n t s a paper d r a f t t h a t u l t i m a t e l y i s
d e b i t e d a g a i n s t t h e consumer's account a t t h e f i n a n c i a l i n s t i t u t i o n .
Is t h e t r a n s f e r s u b j e c t t o t h e r e g u l a t i o n ? What i f t h e t r a n s f e r i s
i n s t e a d i n i t i a t e d through an ACH?

A:

A t r a n s f e r i n i t i a t e d by a d r a f t drawn a g a i n s t t h e consumer's account
i s not an e l e c t r o n i c fund t r a n s f e r . T r a n s fe rs v ia t h e ACH, on t h e
o t h e r hand, a r e s u b j e c t t o t h e r e g u l a t i o n . [§ 2 0 5 . 2 ( g ) ]

- 5 2-21

Fund t r a n s f e r - p r e a u t h o r i z e d d e b i t s by in d i v i d u a l c h e c k s . A con­
sumer s ig n s an agreement a u t h o r i z i n g t h e f i n a n c i a l i n s t i t u t i o n t o
make r e c u r r i n g payments t o a n o th e r p a r t y from t h e c o nsum er's account,
o r t o make r e c u r r i n g i n t e r e s t payments t o th e consumer. The i n s t i ­
t u t i o n p e r i o d i c a l l y g e n e r a t e s an i n d iv id u a l check t o t h e payee by
computer. Are t h e s e t r a n s f e r s s u b j e c t t o t h e r e g u l a t i o n ?
A

2-24

E l e c t r o n i c term in al - te le p h o n e b i l l payment. I f a consumer uses
a pay-by-phone plan t o i n i t i a t e a payment, must t h e f i n a n c i a l
i n s t i t u t i o n provid e a te rm in a l r e c e i p t ?
No. A te le p h o n e i s not an e l e c t r o n i c te rm in a l f o r purposes o f t h e
r e c e i p t re q u ire m e n t, altho u g h t h e t r a n s f e r i t s e l f i s s u b j e c t t o
t h e r e g u l a t i o n . [§ 2 0 5 . 2 ( h ) ]

Q:

Home t e r m i n a l s . Some f i n a n c i a l i n s t i t u t i o n s o f f e r home banking
s e r v i c e s t o t h e i r custo m ers. The s e r v i c e w ill t y p i c a l l y in v o lv e
t h e u s e , f o r example, o f a home computer te rm in a l or a t e l e v i s i o n
s e t t h a t i s lin k e d t o t h e f i n a n c i a l i n s t i t u t i o n ' s computer by means
o f te le p h o n e o r c a b l e - t e l e v i s i o n l i n e s . Does t h e in-home equipment
used by t h e consumer t o i n i t i a t e fund t r a n s f e r s q u a l i f y as an
e l e c t r o n i c t e r m i n a l , and a r e t h e t r a n s f e r s s u b j e c t t o t h e te rm in a l
r e c e i p t requirement?

A:

2-23

Q:

A:

2-22

No. The t r a n s f e r s a r e i n i t i a t e d by check (even though t h e check i s
c o m p u te r-g e n e ra ted ) and a r e exempt. [§ 2 0 5 .2 (g ) ]

Any t r a n s f e r , t o o r from t h e consum er's a s s e t a c c o u n t, t h a t i s i n i ­
t i a t e d by means o f t h e home banking equipment i s an e l e c t r o n i c fund
t r a n s f e r and i s s u b j e c t t o t h e r e g u l a t i o n . However, alth ou g h not
e x p r e s s l y excluded from t h e d e f i n i t i o n o f e l e c t r o n i c t e r m i n a l , th e
home banking equipment used by t h e consumer f o r i n i t i a t i n g fund
t r a n s f e r s i s analogous t o a te le p h o n e in f u n c t i o n . The home banking
te rm in a l i s t h e r e f o r e s i m i l a r l y excepted from t h e e l e c t r o n i c t e r m i ­
nal d e f i n i t i o n and i s not s u b j e c t t o t h e te rm in a l r e c e i p t r e q u i r e ­
ment. [§ 2 0 5 . 2 ( h ) ]

Q:

P o i n t - o f - s a l e t e r m i n a l s . Does t h e r e g u l a t i o n cover POS t r a n s f e r s
in which t h e consumer p r e s e n t s an acc e ss d e v i c e , and does t h e te rm ­
in a l r e c e i p t requirement apply?

A:

The r e g u l a t i o n a p p l i e s t o t r a n s f e r s i n i t i a t e d a t p o i n t - o f - s a l e
te r m i n a l s i f the y c a p t u r e d a ta e l e c t r o n i c a l l y , f o r d e b i t i n g or
c r e d i t i n g t o t h e consum er's a s s e t a c c o u n t, using t h e consumer's
a cc e ss d e vic e — f o r example, when t h e consumer's personal i d e n t i ­
f i c a t i o n number i s r e q u i r e d , in p a r t , t o a c t i v a t e t h e t e r m i n a l .
Terminal r e c e i p t s would be r e q u i r e d in such c a s e s . [§ 2 0 5 . 2 ( h ) ]

- 6 2-25

Q:

T e l l e r - o p e r a t e d t e r m i n a l s . Does e l e c t r o n i c te rm in a l in c l u d e a com­
p u t e r te rm in a l o p e ra te d by a t e l l e r o r o t h e r employee o f a f i n a n c i a l
i n s t i t u t i o n , f o r purposes o f t h e te rm in a l r e c e i p t requirem ent?

A:

E l e c t r o n i c te rm in a l does not g e n e r a l l y i n c lu d e computer equipment
o p e r a te d by a f i n a n c i a l i n s t i t u t i o n ' s employees o r used i n t e r n a l l y
by t h e f i n a n c i a l i n s t i t u t i o n t o pro c e ss t r a n s f e r s .
However, t r a n s f e r s i n i t i a t e d a t such t e r m i n a l s by means o f t h e
consum er's a cc e ss dev ice (usin g th e consumer's pers onal i d e n t i f i ­
c a t i o n number, f o r example) a r e e l e c t r o n i c fund t r a n s f e r s , and a re
s u b j e c t t o o t h e r re q uirem en ts o f t h e r e g u l a t i o n . I f t h e a c c e s s
d e v ic e i s used o nly f o r i d e n t i f i c a t i o n purposes or f o r de te rm inin g
t h e account b a l a n c e , on t h e o t h e r hand, t h e t r a n s f e r s a r e not
e l e c t r o n i c fund t r a n s f e r s f o r purposes of t h e r e g u l a t i o n .
[§ 2 0 5 . 2 ( h ) ]

2-26

Q:

Unauthorized t r a n s f e r by i n s t i t u t i o n ' s employee. A f i n a n c i a l i n s t i t u t l o n ' s employee f r a u d u l e n t l y t a k e s money from a consumer's account
by e l e c t r o n i c means. Is t h e consumer l i a b l e f o r t h e s e t r a n s f e r s ?

A:

No. Unauthorized e l e c t r o n i c fund t r a n s f e r s exclude any t r a n s f e r
i n i t i a t e d by t h e f i n a n c i a l i n s t i t u t i o n o r i t s employees. The re g u ­
l a t i o n ' s l i a b i l i t y p r o v i s i o n s do n o t apply and t h e consumer has no
l i a b i l i t y f o r such t r a n s f e r s . [§§ 2 0 5 . 2 ( 1 ) , 205.6]

Section 205.3 — Exemptions
3-1

Q: Check g u a r a n t e e / a u t h o r i z a t i o n - memo p o s t i n g . A consumer's account
i s memo posted e l e c t r o n i c a l l y a t t h e time a payment t o a t h i r d p a r t y
i s guaran teed o r a u t h o r i z e d under a check g u a ra n te e o r a u t h o r i z a t i o n
s e r v i c e , but t h e f i n a n c i a l i n s t i t u t i o n does not pay o u t t h e funds
u n t i l t h e check i s r e c e i v e d . Is th e s e r v i c e exempt?
A:

3-2

Q: Mire t r a n s f e r - i n s t r u c t i o n s on magnetic t a p e . I f a t r a n s f e r o f
funds t o a f i n a n c i a l i n s t i t u t i o n i s s e n t by Fedwire o r a s i m i l a r
netw ork, and t h e i n s t r u c t i o n s f o r c r e d i t i n g in d iv id u a l consumers'
a ccounts a r e t r a n s m i t t e d on magnetic t a p e , a r e th e t r a n s f e r s exempt?
A:

3-3

Yes. Although a temporary hold i s pla ced on t h e funds 1n t h e con­
su m er's a c c o u n t, t h e g u a ra n tee does not r e s u l t in a d i r e c t d e b i t t o
t h e a c c o u n t. D ebiting occurs when t h e check o r d r a f t i s
p re s e n te d
f o r c o l l e c t i o n . [§ 2 0 5 . 3 ( a ) ]

Yes.

A Fedwire or s i m i l a r t r a n s f e r o f funds i s exempt.

[§ 2 0 5 . 3 ( b ) ]

Q: Wire t r a n s f e r - followed by ACH t r a n s f e r s . A company sends funds
by Fedwire or a s i m i l a r network from one f i n a n c i a l i n s t i t u t i o n to
a n o t h e r , and t r a n s f e r s v ia ACH a r e then made from t h e second i n s t i ­
t u t i o n t o t h e a cco u nts o f company employees a t s t i l l o t h e r i n s t i t u ­
t i o n s . Are th e subsequent t r a n s f e r s exempt?

- 7 No. Although t h e Fedwire t r a n s f e r i s exempt, th e ACH t r a n s f e r s t o
employees' a cco u n ts a r e s u b j e c t t o t h e r e g u l a t i o n . [§§ 2 0 5 . 3 ( b ) ,
205.2(g)]
Telephone t r a n s f e r p la n s - a p p l i c a b i l i t y o f i n t r a - i n s t i t u t i o n a l
exempt1onT A consumer c a l l s a f i n a n c i a l I n s t i t u t i o n , under a t e l e ­
phone t r a n s f e r p l a n , t o r e q u e s t a t r a n s f e r o f funds from a s av in g s
t o a checking a cc o u n t. Does t h e exemption f o r a u to m a tic i n t r a i n s t i t u t i o n a l t r a n s f e r s apply?
No, because even though th e t r a n s f e r i s between t h e consumer's
acco u n ts a t t h e same i n s t i t u t i o n , i t occurs under a te le p h o n e t r a n s ­
f e r plan.
(See q u e s ti o n 3 -1 7 .) [§ 2 0 5 .3 (d ) ]
Compulsory use - p r e a u th o r iz e d loan payments. P r e a u th o ri z e d loan
payments t o t h e i n s t i t u t i o n in which t h e consumer h olds an account
a r e exempt from t h e a c t and r e g u l a t i o n g e n e r a l l y , b u t a r e s u b j e c t
t o t h e s t a t u t o r y p r o h i b i t i o n a g a i n s t r e q u i r i n g repayment by means
of p r e a u t h o r i z e d e l e c t r o n i c fund t r a n s f e r s .
I f an i n s t i t u t i o n
r e q u i r e d a u tom a tic payment by e l e c t r o n i c means on c r e d i t agreements
made b e fo re May 10, 1980, must t h e i n s t i t u t i o n now o f f e r t h o s e
consumers an a l t e r n a t i v e means o f repayment?
No, i t i s not n e c e s s a ry t o do s o . However, i f a consumer who e n t e r e d
i n t o such an agreement now asks t o repay by o t h e r th a n e l e c t r o n i c
means, t h e f i n a n c i a l i n s t i t u t i o n should honor t h e r e q u e s t .
[§ 2 0 5 . 3 ( d ) ( 3 ) , § 913]
Compulsory use - s a l a r y payments. P r ea u th o rize d t r a n s f e r s from a
F ina nc ia l i n s t i t u t i o n t o a consumer's account a t t h e same i n s t i t u ­
t i o n a r e exempt from t h e a c t and r e g u l a t i o n g e n e r a l l y , b u t a r e
s u b j e c t t o t h e s t a t u t o r y p r o h i b i t i o n a g a i n s t r e q u i r i n g an employee
(as a c o n d i t i o n o f employment) t o r e c e iv e p a y ro ll d e p o s i t s by e l e c ­
t r o n i c means a t a p a r t i c u l a r i n s t i t u t i o n . Does t h i s p r o h i b i t i o n
apply t o a f i n a n c i a l i n s t i t u t i o n as an employer?
Yes. The p r o h i b i t i o n a p p l i e s t o a l l employers, in c lu d in g f i n a n c i a l
i n s t i t u t i o n s . To comply with t h e law an employer c o u l d , f o r example,
g iv e i t s employees a ch o ice as t o t h e method o f r e c e i v i n g payment —
such as having t h e i r pay d e p o s it e d a t a p a r t i c u l a r i n s t i t u t i o n , o r
r e c e i v i n g payment by check or c a s h .
As in t h e case o f p r e a u th o r iz e d loan payments, th e compulsory use
p r o h i b i t i o n does not r e q u i r e an employer t o o f f e r a l t e r n a t i v e means
o f payment t o employees who agreed t o e l e c t r o n i c d e p o s i t s a t a
p a r t i c u l a r f i n a n c i a l i n s t i t u t i o n b e fo re May 10, 1980. However, i f
an employee asks t o te r m in a te t h i s arrangem ent, th e employer should
honor t h e r e q u e s t . [§ 2 0 5 . 3 ( d ) ( 2 ) , § 913]

- 8 Compulsory use - payments from pledged s a v i n g s . Under c e r t a i n
ty p e s o f g raduated payment mortgages, a pledged savings account i s
used t o supplement th e monthly payments made by t h e borrower durin g
an i n i t i a l term — f o r example, in th e f i r s t f i v e y e a r s o f t h e
lo a n . The le n d e r d e b i t s t h e pledged account a u t o m a t i c a l l y f o r th e
p r e s c r i b e d sum each month. That auto m atic t r a n s f e r o f funds i s an
i n t e g r a l f e a t u r e o f t h i s ty p e o f a l t e r n a t i v e mortgage. Does t h e
p r o h i b i t i o n a g a i n s t compulsory use of e l e c t r o n i c fund t r a n s f e r s
b a r t h i s ty p e o f program?
No. The l e g i s l a t i v e h i s t o r y of t h e p r o h i b i t i o n a g a i n s t compulsory
use makes c l e a r t h a t i t i s p e r m i s s i b l e t o o f f e r a reduced annual
p e rc e n ta g e r a t e o r some o t h e r c o s t - r e l a t e d i n c e n t i v e f o r an automa­
t i c repayment f e a t u r e . The s p e c ia l terms o f t h e ple d ge d-ac c o un t
mortgage appear t o be such an i n c e n t i v e . [§ 2 0 5 . 3 ( d ) ( 3 ) , § 913]
Automatic t r a n s f e r s - t o j o i n t account h o l d e r ; t o fam ily member.
A consumer a u t h o r i z e s a f i n a n c i a l i n s t i t u t i o n t o make p e r i o d i c
t r a n s f e r s from t h e consumer's account t o an account held j o i n t l y
w ith a n o t h e r consumer a t t h e same i n s t i t u t i o n . Are t h e s e t r a n s f e r s
exempt? What about t r a n s f e r s t o a family member's account?
Automatic t r a n s f e r s between a consumer's acco u nts w ith in a f i n a n c i a l
i n s t i t u t i o n a r e exempt; t h e r e need not be complete i d e n t i t y of
account h o ld e r s on t h e two a c c o u n ts . I n t r a - f a m i l y t r a n s f e r s t h a t
o ccur a u t o m a t i c a l l y w ith in a f i n a n c i a l i n s t i t u t i o n a r e a l s o exempt.
[§ 2 0 5 . 3 ( d ) ( 1 ) and ( 4 ) ]
Automatic t r a n s f e r s - stop-payment c h a r g e s / o t h e r i t e m s . A f i n a n c l a i i n s t i t u t i o n e l e c t r o n i c a l l y d e b i t s o r c r e d i t s consumer accounts
f o r stop-payment c h a r g e s , NSF c h a r g e s , o v e r d r a f t c h a r g e s , p r o v i ­
s io n a l r e c r e d i t s , e r r o r a d ju s t m e n t s , and s i m i l a r ite m s . Are t h e s e
t r a n s f e r s exempt?
Yes. These a r e i n t r a - i n s t i t u t i o n a l t r a n s f e r s t h a t a r e i n i t i a t e d
by t h e f i n a n c i a l i n s t i t u t i o n a u t o m a t i c a l l y , on t h e o c cu rre n ce o f
c e r t a i n e v e n t s . [§ 2 0 5 . 3 ( d ) ]
Automatic t r a n s f e r s - group l i f e in s u r a n c e . A f i n a n c i a l i n s t i t u ­
t i o n o f f e r s group l i f e insura n ce coverage t o i t s account h o l d e r s .
The in s u ra n c e can be o b ta in e d only through t h e f i n a n c i a l i n s t i t u ­
t i o n , and t h e premiums can be paid only by means o f an a g g re g ate
payment from t h e f i n a n c i a l i n s t i t u t i o n . Consumers' accounts a r e
d e b ite d f o r t h e i r s h a r e of th e premiums, and th e f i n a n c i a l i n s t i t u ­
t i o n makes payment on b e h a l f of p a r t i c i p a t i n g account h o ld e r s f o r
t h e t o t a l premium due under th e group p o l i c y . Are t h e s e t r a n s f e r s
exempt?
Yes. The d e b i t t o an in d iv id u a l consumer's account i s an au to m a tic
t r a n s f e r t o an account o f th e f i n a n c i a l i n s t i t u t i o n . Because th e
group in s u ra n c e can be obtained only through th e i n s t i t u t i o n , th e
t r a n s f e r can be regarded as a bona f i d e i n t r a - i n s t i t u t i o n a l t r a n s f e r ,
even though t h e funds a r e u l t i m a t e l y t r a n s f e r r e d t o a t h i r d p a r t y .
[§ 2 0 5 . 3 ( d ) ( 3 ) ]

- 9 3-11

Q: Automatic t r a n s f e r s - check o r d e r c h a r g e s . Check o r d e r c h a r g e s a r e
e l e c t r o n i c a l l y d e b ite d t o an account a t t h e consumer's r e q u e s t .
Checks can only be o b ta in e d and paid f o r through t h e f i n a n c i a l
i n s t i t u t i o n . Are t h e s e t r a n s f e r s exempt?
A:

3-12

No.

[§ 205.3(d)]

Q: Telephone t r a n s f e r plan - e x i s t e n c e o f p l a n . A f i n a n c i a l i n s t i t u ­
t i o n t r a n s f e r s funds in response t o a consum er's t e le p h o n e r e q u e s t .
Is t h e t r a n s f e r s u b j e c t t o th e r e g u l a t i o n ?
A:

3-15

Yes. Under t h e unique c irc u m s tan c e s t h a t e x i s t in Rhode I s l a n d ,
t r a n s f e r s w ith in t h e p a i r e d i n s t i t u t i o n s q u a l i f y f o r i n t r a - i n s t i t u ­
t i o n a l s t a t u s . [§ 2 0 5 . 3 ( d ) ]

Q: Automatic t r a n s f e r s - a f f i l i a t e d i n s t i t u t i o n s . Does a t r a n s f e r t o
o r from an account o f t h e consumer a t a s u b s i d i a r y i n s t i t u t i o n (or
w ith in t h e same ho ld ing company) q u a l i f y as an i n t r a - i n s t i t u t i o n a l
tran sfer?
A:

3-14

[§ 2 0 5 . 3 ( d ) ( 3 ) ]

Q: Automatic t r a n s f e r s - p a ire d i n s t i t u t i o n s in Rhode I s l a n d . Rhode
I s la n d has a banking system t h a t s a n c t i o n s t h e p a i r i n g o f a t h r i f t
i n s t i t u t i o n with a commercial bank. The p a ire d i n s t i t u t i o n s f r e ­
q u e n tly s h are q u a r t e r s and have common t e l l e r s and t e l l e r s t a t i o n s .
Customers r e c e i v e a u n i f i e d statem e n t t h a t d i s t i n g u i s h e s th e two
a cco un ts by number and t y p e , but not by i n s t i t u t i o n . Are t r a n s f e r s
t h a t oc cu r w ith in t h e th r i f t - c o m m e r c i a l p a i r i n t r a - i n s t i t u t i o n a l
t r a n s f e r s f o r purposes o f t h e exemption f o r au to m a tic t r a n s f e r s ?
A:

3-13

Yes.

The t r a n s f e r i s an e l e c t r o n i c fund t r a n s f e r f o r purposes o f t h e
r e g u l a t i o n i f i t occurs under a w r i t t e n plan o r agreement between
t h e consumer and t h e f i n a n c i a l i n s t i t u t i o n .
In t h e absence o f a
w r i t t e n plan o r agreement, te le p h o n e t r a n s f e r s t h a t a r e made as an
accommodation t o t h e consumer a r e not c o v ered . [§ 2 0 5 . 3 ( e ) ]

Q: Telephone t r a n s f e r s - e x i s t e n c e o f p la n ; s i g n a t u r e c a r d . A s i g n a ­
t u r e card sign ed Dy t h e consumer when t h e account was e s t a b l i s h e d
c o n t a i n s a c l a u s e a u t h o r i z i n g t h e f i n a n c i a l i n s t i t u t i o n t o honor
t h e consumer's te le p h o n e r e q u e s t f o r fund t r a n s f e r s .
It is b asi­
c a l l y a ho ld -harm less agreement f o r
th e i n s t i t u t i o n ' s b e h a l f in
th e event t h e consumer r e q u e s t s and t h e i n s t i t u t i o n a g r e e s , a t t h e
time o f t h e r e q u e s t , t o make t h e t r a n s f e r . Does th e s i g n a t u r e c ard
c o n s t i t u t e a w r i t t e n agreement?
A:

A h o ld -h a rm less a u t h o r i z a t i o n on a s i g n a t u r e c ard does n o t , by
i t s e l f , c o n s t i t u t e a w r i t t e n plan or agreement f o r purposes o f th e
r e g u l a t i o n . [§ 2 0 5 . 3 ( e ) ]

- 10 3-16

Q: Telephone t r a n s f e r s - e x i s t e n c e o f p l a n ; l i m i t s f o r R egulation D
p u rp o s e s ^ In o r d e r t o comply with R egulation D (Reserve R eq uire ­
ments o f D epository I n s t i t u t i o n s ) , an i n s t i t u t i o n p r i n t s a legend
on a s i g n a t u r e card o r p e r i o d i c s ta te m e n t or in a passbook, l i m i t i n g
t h e number o f te le p h o n e t r a n s f e r s t h a t t h e consumer can make from a
s av in g s a c c o u n t.
Is t h i s deemed t o c o n s t i t u t e a w r i t t e n plan?
A:

3-17

Q: Telephone t r a n s f e r plan - manual c o m p le tio n . A consumer s i g n s a
te le p h o n e t r a n s f e r agreement a u t h o r i z i n g t h e f i n a n c i a l i n s t i t u t i o n
t o t r a n s f e r funds between accounts w ith in t h e i n s t i t u t i o n . To
i n i t i a t e a t r a n s f e r , t h e consumer te le p h o n e s an employee o f t h e
i n s t i t u t i o n , who th en completes t h e t r a n s f e r manually by means of
d e b i t memos, d e p o s i t s l i p s , e t c .
Is t h e t r a n s f e r exempt?
A:

3-18

No. The t r a n s f e r i s i n i t i a t e d by te le p h o n e under a te le p h o n e t r a n s ­
f e r p l a n , and i s t h e r e f o r e c ov ered . The f a c t t h a t t h e t r a n s f e r i s
completed manually does n o t change t h i s r e s u l t .
(See q u e s ti o n 3 - 4 . )
[§§ 2 0 5 . 3 ( e ) , 2 0 5 . 2 ( g ) ]

Q: Telephone t r a n s f e r plan - in d iv id u a l t r a n s f e r s . A f i n a n c i a l i n s t i ­
t u t i o n ' s te le p h o n e t r a n s f e r plan r e q u i r e s t h e consumer t o make a
s e p a r a t e r e q u e s t f o r each t r a n s f e r from t h e consum er's a c c o u n t.
That i s , t h e consumer cannot a u t h o r i z e s u c c e s s iv e p e r i o d i c payments
t o t h e d e s i g n a t e d payee by means o f a s i n g l e te le p h o n e c a l l .
Is
t h i s plan exempt?
A:

3-19

No. The legend s e r v e s as a l i m i t a t i o n on t h e account and does n o t ,
by i t s e l f , c o n s t i t u t e a w r i t t e n plan or agreement. [§ 2 0 5 . 3 ( e ) ]

No. The plan i s c o v ered . Even though t h e consumer cannot a u t h o r i z e
r e c u r r i n g payments
by means o f one te le p h o n e r e q u e s t , t h e r e i s an
agreement t h a t perm its th e consumer t o i n i t i a t e t r a n s f e r s from time
t o ti m e . [§ 2 0 5 . 3 ( e ) ]

Q: Telephone t r a n s f e r
p la n s - frequency o f u s e . Many consumers who
sig n up f o r a te le p h o n e t r a n s f e r plan use i t only o c c a s i o n a l l y ,
o t h e r s not a t a l l . Are t r a n s f e r s under t h e plan exempt, s i n c e t h e
i n s t i t u t i o n does not know when (o r whether) a te le p h o n e t r a n s f e r
w ill be made?
A:

3-20

No. T r a n s fe rs under th e plan a re not exempt, because any t r a n s f e r
t h a t does occur w ill be o c c u r rin g under t h e p re a rra ng e d p la n .
[§ 2 0 5 . 3 ( e ) ]

Q:

T ru st a cco un ts - IRAs under c u s t o d i a l agreem en ts. A f i n a n c i a l
i n s t i t u t i o n holds c e r t a i n Indiv idual Retirement Accounts (IRAs)
under c u s t o d i a l agre ements . The c u s t o d i a l agreement i s i d e n t i c a l
t o a t r u s t agreement, except t h a t t h e p a r t i e s a re i d e n t i f i e d as
d e p o s i t o r and c u s t o d i a n , r a t h e r than as g r a n t o r and t r u s t e e .
Under th e I n t e r n a l Revenue Code, t h e s e accounts q u a l i f y as t r u s t s
so long as the y o th e rw is e meet th e re q uirem en ts f o r an IRA. Do
t h e s e c u s t o d i a l accounts q u a l i f y f o r t h e r e g u l a t i o n ' s exemption
f o r t r u s t accounts ?

- 11 A:
Q:

Trust accounts - bona f i d e t r u s t agreement.
t r u s t agreement?

A:

3-21

Yes. So long as t h e c u s t o d i a l agreements a r e t h e f u n c t i o n a l e q u iv a ­
l e n t o f t r u s t a g reem en ts, th e y a r e exempt. [§ 2 0 5 . 3 ( f ) ]

The term i s not d e fin e d by th e a c t o r r e g u l a t i o n . F in a n c ia l i n s t i ­
t u t i o n s must t h e r e f o r e look t o s t a t e o r o t h e r law. The Board and
t h e s t a f f w ill not make d e te r m in a tio n s in in d i v i d u a l c a s e s .
[§ 2 0 5 . 3 ( f ) ]

What i s a bona f i d e

Section 205.4 — Special Requirements
4-1

Q: Shared system - scope
o f d i s c l o s u r e s . In a shared syste m, must an
I n s t i t u t i o n ' s i n i t i a l d i s c l o s u r e s i n c lu d e EFT c harg es and frequency
o r d o l l a r l i m i t a t i o n s imposed by o t h e r i n s t i t u t i o n s in t h e system,
t o t h e e x t e n t t h a t t h e i n s t i t u t i o n knows what t h e s e a re ?
A:

4-2

Q: Shared system - d i s c l o s u r e s on b e h a l f o f a n o th e r i n s t i t u t i o n . I f
i n s t i t u t i o n B i s making d i s c l o s u r e s on b e h a l f of' i n s t i t u t i o n A,
which holds a consumer's a c c o u n t, may B l i m i t t h e d i s c l o s u r e s t o
t h o s e w ith in i t s own knowledge?
A:

4-3

No, because t h i s in fo rm a tio n i s not w ith in t h e purview o f th e i n s t i ­
t u t i o n ' s r e l a t i o n s h i p with i t s custom er. [§§ 2 0 5 . 4 ( a ) , 2 0 5 . 7 ( a ) ]

No. The r e s p o n s i b i l i t y f o r making d i s c l o s u r e s r e s t s with t h e accounthold in g i n s t i t u t i o n . The d i s c l o s u r e s B makes f o r A ( i f A's r e s p o n s i ­
b i l i t y i s t o be met) must in c lu d e in fo rm a tio n w ith in A's knowledge
■ and t h e purview of A's r e l a t i o n s h i p with A's custo m ers. For example,
B would d i s c l o s e any e l e c t r o n i c fund t r a n s f e r c h arges imposed by A.
[§ 2 0 5 . 4 ( a ) ]

Q: M u ltip le acco u n ts and
account h o l d e r s . I f X and Y open a j o i n t
checking account and a j o i n t s av in g s account a t i n s t i t u t i o n A, how
many d i s c l o s u r e s ta t e m e n ts must A pro vid e?
A:

One, provided i t covers terms and c o n d i t i o n s on both a c c o u n t s .
The d i s c l o s u r e can be given t o e i t h e r X o r Y. [§ 2 0 5 . 4 ( b ) ]

Section 205.5 — Issuance o f Access Devices
5-1

Q:

Renewal o r s u b s t i t u t i o n - o n e -fo r- o n e r u l e . When an i n s t i t u t i o n
i s s u e s a renewal or s u b s t i t u t e d e v i c e , may i t send more th an one
in p la c e o f th e e x i s t i n g device?

A:

No. For example, only one new c ard and personal i d e n t i f i c a t i o n
number (PIN) may be is su e d t o r e p l a c e a card and PIN p r e v i o u s l y
i s s u e d . [§ 2 0 5 . 5 ( a ) ( 2 ) ]

- 12 Renewal o r s u b s t i t u t i o n - change in s e r v i c e s . Must a renewal o r
s u b s t i t u t e a cc e ss d e v ic e perm it e x a c t l y t h e same ty p e s o f e l e c t r o n i c
fund t r a n s f e r s as t h e o r i g i n a l ?
No. The renewal o r s u b s t i t u t e d e v ic e may
t i o n a l , o r fewer t y p e s .
I f a new ty p e i s
may be r e q u i r e d .
(See q u e s tio n 7 - 9 . ) I f
a r e p o s s i b l e , a c h a n g e -in - te rm s n o t i c e i s
205.7(a), 205.8(a)] '

perm it t h e
same, a d d i ­
added, new
disclosures
fewer ty p e s o f t r a n s f e r s
required.
[§§ 2 0 5 . 5 ( a ) ( 2 ) ,

Renewal o r s u b s t i t u t i o n - s u c c e s s o r i n s t i t u t i o n . Must a s u c c e s s o r
f i n a n c i a l i n s t i t u t i o n be an e n t i t y t h a t re p la c e d t h e o r i g i n a l
f i n a n c i a l i n s t i t u t i o n ( f o r example, through a c o r p o r a t e merger or
acquisition)?
No. A s u c c e s s o r could a l s o i n c l u d e , f o r example, a p a r t y t h a t
a c q u i r e s acc o u n ts o r t a k e s over t h e o p e r a t i o n o f an EFT system.
[§ 2 0 5 . 5 ( a ) ( 2 ) ]
Renewal o r s u b s t i t u t i o n - p r e - 2 / 8 / 7 9 d e v i c e . I f an i n s t i t u t i o n
i s s u e d an a cc e ss de v ic e on an u n s o l i c i t e d b a s i s b e f o r e February 8,
1979 ( th e e f f e c t i v e d a t e o f t h e a c t ' s r e s t r i c t i o n s on u n s o l i c i t e d
i s s u a n c e ) , may t h e i n s t i t u t i o n now i s s u e a v a l i d a t e d renewal o r
s u b s t i t u t e d ev ice? Or may i t do so only a f t e r r e c e i v i n g a r e q u e s t
from t h e consumer?
I f an i n s t i t u t i o n does not know whether th e u n s o l i c i t e d d e v ic e
became “a c c e p t e d , " 1 t may i s s u e a v a l i d a t e d renewal o r s u b s t i t u t e
d e v ic e f o r a p r e - 2 / 8 / 7 9 d e v i c e , provided c e r t a i n d i s c l o s u r e s accom­
pany t h e renewal o r s u b s t i t u t e d e v i c e . The renewal o r s u b s t i t u t e
d e v ic e does not become "accepted" — and th e consumer can i n c u r no
l i a b i l i t y f o r u n a u th o riz e d use — u n t i l t h e consumer uses or s ig n s
i t , o r a u t h o r i z e s someone e l s e t o use i t .
[§ 2 0 5 . 5 ( a ) ( 3 ) ]
U n s o l i c i t e d is s u a n c e - f u n c t i o n s o f PIN. I f an i n s t i t u t i o n i s s u e s
a pers onal i d e n t i f i c a t i o n number a t t h e consumer's r e q u e s t , could
t h i s is su a n c e c o n s t i t u t e both (1) a way o f v a l i d a t i n g t h e d e b i t
c ard and (2) t h e means t o i d e n t i f y t h e consumer ( r e q u i r e d as a con­
d i t i o n of imposing l i a b i l i t y f o r u n a u th o riz e d t r a n s f e r s ) ?
Yes.

[§§ 2 0 5 . 5 ( b ) , 2 0 5 . 6 ( a ) ( 2 ) ]

U n s o l i c i t e d is su a n c e - example o f non-complying method. An i n s t i t u t l o n i s s u e s an u n s o l i c i t e d d e b i t card and PIN t o a consumer, th u s
e n a b lin g t h e consumer t o i n i t i a t e e l e c t r o n i c fund t r a n s f e r s . The
i n s t i t u t i o n i n s t r u c t s th e consumer jiot t o use t h e c ard and PIN u n t i l
t h e consumer has come t o an o f f i c e o f t h e i n s t i t u t i o n f o r v e r i f i c a ­
t i o n o f th e consumer's i d e n t i t y . Does t h i s procedure comply with
the regulation?

- 13 A:

5-8

Q:

U n s o l i c i t e d is s u a n c e - example o f complying method. Same f a c t s as
in q u e s ti o n 5 - 6 , e x ce p t t h a t th e i n s t i t u t i o n ' s ATM system i s i n i ­
t i a l l y programmed n o t t o a c c e p t t h e consumer's c a r d and PIN. A f te r
t h e consumer has r e q u e s te d v a l i d a t i o n o f t h e c a r d , t h e i n s t i t u t i o n
reprograms i t s computer so t h a t t h e card and PIN now work in t h e
system. Does t h i s v a l i d a t i o n procedure comply with t h e r e g u l a t i o n ?

A:

5-7

No. In t h i s c a s e , t h e consumer could in f a c t use t h e c ard and PIN
to i n i t i a t e t r a n s f e r s (even though i n s t r u c t e d not t o do s o ) ; t h u s ,
t h e i n s t i t u t i o n has n o t met t h e requirement t h a t an u n s o l i c i t e d a c c e s s
d e v ic e be u n v a lid a te d when i s s u e d . [§ 2 0 5 . 5 ( b ) ( 1 ) ]

Yes, provided t h e i n s t i t u t i o n v e r i f i e s t h e consumer's i d e n t i t y by
some re a s o n a b le means b e f o r e reprogramming. [§ 2 0 5 . 5 ( b ) ( 4 ) ]

Q: U n s o l i c i t e d is s u a n c e - v e r i f i c a t i o n o f i d e n t i t y .
Must an i n s t i t u t i o n
v e r i f y i d e n t i t y by one o f t h e methods l i s t e d in t h e r e g u l a t i o n ?
A:

5-9

No, th e y a r e merely examples. Any re a s o n a b le means o f v e r i f y i n g
i d e n t i t y w ill comply. Even i f an i n s t i t u t i o n uses r e a s o n a b le means,
however, i f i t f a i l s t o v e r i f y i d e n t i t y c o r r e c t l y
— so t h a t an
im p oster succeeds 1n having a d e vic e v a l i d a t e d —
t h e consumer i s
not l i a b l e f o r any u n a u th o riz e d t r a n s f e r s from t h e c on sum er's a c c o u n t.
[§§ 2 0 5 . 5 ( b ) ( 4 ) , 2 0 5 . 2 ( a ) ( 2 ) , 2 0 5 . 6 ( a ) ( 1 ) ]

Q: U n s o l i c i t e d is s u a n c e - a c c e s s devic e with o v e r d r a f t f e a t u r e . The
r e g u l a t i o n p e rm its t h e u n s o l i c i t e d is s u a n c e of an a c c e s s d e v i c e .
Under t h i s p r o v i s i o n , may an i n s t i t u t i o n i s s u e a combined c r e d i t
c a r d / a c c e s s d e v ic e t o a consumer, w ith o ut a r e q u e s t or a p p l i c a t i o n
f o r t h e card?
A:

5-10

Yes, provided t h a t (1) t h e only c r e d i t f e a t u r e i s a p r e e x i s t i n g
o v e r d r a f t c r e d i t l i n e a t t a c h e d t o t h e consumer a s s e t account (o r
a s i m i l a r l i n e o f c r e d i t t h a t m a in ta in s a s p e c i f i e d minimum b a la n ce
in t h e a c c o u n t ) , and (2) t h e i n s t i t u t i o n complies w ith t h e r e g u l a ­
t i o n ' s procedures f o r an u n s o l i c i t e d i s s u a n c e . [§ 2 0 5 . 5 ( c ) ( l ) ( i i i ) ]

Q:

U n s o l i c i t e d is s u a n c e - o t h e r combined c r e d i t c a r d / a c c e s s d e v i c e s .
Ooes th e answer t o q u e s ti o n 5-9 mean t h a t an i n s t i t u t i o n i s p r o h i b i t e d from i s s u i n g , on an u n s o l i c i t e d b a s i s , any o t h e r ty p e of
combined c r e d i t c a r d / a c c e s s device?

A:

No. Section 2 2 6 .1 2 (a )(1 ) o f Regulation Z (Truth in Lending) pe rm its
c r e d i t o r s t o i s s u e , on an u n s o l i c i t e d b a s i s , a c ard t h a t may become
a c r e d i t card provided t h a t (1) t h e card a t t h e time o f Is su a n c e has
a s u b s t a n t i v e purpose o t h e r than o b ta in in g c r e d i t and cannot be used
as a c r e d i t card and (2) any c r e d i t p r i v i l e g e t h a t s u b se qu e n tly
a t t a c h e s i s a t t a c h e d only upon t h e consumer's r e q u e s t . (The sub­
s t a n t i v e purpose could be t o i n i t i a t e e l e c t r o n i c fund t r a n s f e r s . )
The r u l e s of R egulation E on u n s o l i c i t e d is su a n c e o f a cc e ss d e v ic es
w i l l , of c o u r s e , c o n tin u e t o a p p ly . [§§ 2 0 5 . 5 ( c ) ( 2 ) ( i i i ) and ( b ) ]

- 14 S e c tio n 205.6 — L i a b i l i t y o f Consumer f o r Unauthorized T r a n s f e r s

6-1

I f t h e consumer f a i l s t o r e p o r t an u n a u th o riz e d e l e c t r o n i c fund
t r a n s f e r w ith in 60 days o f t r a n s m i t t a l o f t h e p e r i o d i c s ta t e m e n t
r e f l e c t i n g t h e t r a n s f e r , t h e consumer co uld be s u b j e c t t o l i a b i l i t y .
(See q u e s t i o n s 2-26 and 7 - 7 . ) [§ 2 0 5 .6 (a ) and ( b ) ]

Q:

F a i l u r e t o d i s c l o s e b u s in e s s d a y s . I f a f i n a n c i a l i n s t i t u t i o n meets
o ther conditions (including d is c lo su re of l i a b i l i t y ) but f a i l s to
d i s c l o s e i t s b u s in e s s d a y s , can i t hold t h e consumer l i a b l e f o r
u n a u th o riz e d t r a n s f e r s in v o lv in g a l o s t o r s t o l e n a cc e ss d e v ic e ?

A:

6-3

Unauthorized t r a n s f e r s - a c c e s s d e v ic e not in v o l v e d . I f unautho­
r i z e d t r a n s f e r s do not in v o lv e t h e use of’ an a c c e s s d e v ic e such as
a d e b i t c a r d , may any l i a b i l i t y be imposed on t h e consumer?

A:

6-2

Q:

No, u n l e s s a p p l i c a b l e s t a t e law o r an agreement between t h e consumer
and t h e f i n a n c i a l i n s t i t u t i o n s e t s a l i a b i l i t y l i m i t o f $50 o r l e s s .
[§ 2 0 5 . 6 ( a ) ( 3 ) ( i i i ) ]

Q: Means o f i d e n t i f i c a t i o n - m u l t i p l e u s e r s . I f more than one a c c e s s
d e v ic e 1s is s u e d t o a c c e s s a p a r t i c u l a r consumer a c c o u n t, must t h e
f i n a n c i a l i n s t i t u t i o n p ro vid e a means t o i d e n t i f y each s e p a r a t e
u s e r in o r d e r t o impose l i a b i l i t y f o r u n a u th o riz e d t r a n s f e r s ?
A:

6-4

Q: Means o f i d e n t i f i c a t i o n - use o f PIN. Does th e use o f a personal
i d e n t i f i c a t i o n number (PIN) o r o t h e r a l p h a b e t i c a l o r numerical code
s a t i s f y t h e requirement o f e l e c t r o n i c or mechanical c o n firm a ti o n
f o r i d e n t i f y i n g t h e consumer t o whom an a cc e ss d e v ic e was is s u e d ?
A:

6-5

No. The f i n a n c i a l i n s t i t u t i o n may provid e means t o i d e n t i f y t h e
s e p a r a t e u s e r s , but i s not r e q u i r e d t o do s o . [§ 2 0 5 . 6 ( a ) ( 2 ) ]

Yes.

[§ 2 0 5 . 6 ( a ) ( 2 ) ]

Q: A p p lic a tio n o f l i a b i l i t y p r o v is io n s - examples. What a r e some
examples of when and how t h e fo llow ing would ap p ly : (1) t h e $500
l i a b i l i t y l i m i t p r o v i s i o n , (2) both th e $500 l i m i t and t h e u n lim i te d
l i a b i l i t y p r o v i s i o n s , and (3) only th e $ 5 0 /u n lim ite d l i a b i l i t y
p r o v i s i o n s ? [§ 2 0 5 . 6 ( b ) ( 1 ) , (2) and ( 3 ) ]
A:

SITUATION 1 — $500 LIMIT APPLIES
DATE

EVENT

June 1

C 's card i s s t o l e n .

June 2

$100 u n a u th o riz e d t r a n s f e r .

- 15 DATE

EVENT

June 3

C learns of t h e f t .

June 4

$25 u n a u th o riz e d t r a n s f e r .

June 5

Close o f 2 b u s in e s s d a y s.

June 7 - 8

$600 1n u n a u th o riz e d t r a n s f e r s t h a t could have been
p revented had n o t i c e been given by June 5.

June 9

C n o t i f i e s bank.

Computation o f C 's l i a b i l i t y ;
Paragraph ( b ) ( 1 ) w ill apply t o determ in e C 's l i a b i l i t y f o r any
u n a u th o riz e d t r a n s f e r s t h a t occur b e f o r e n o t i c e i s g iv e n .
C's l i a b i l i t y :
Amount o f t r a n s f e r s b e f o r e c l o s e of
2 b u s in e s s days: $125

$ 50 (maximum
liab ility
for th is
p e r io d )

Amount o f t r a n s f e r s , a f t e r c l o s e o f
2 b u s in e s s days and b e f o r e n o t i c e t o
i n s t i t u t i o n , t h a t would no t have
o ccurred but f o r C 's f a i l u r e t o n o t i f y
w ith in 2 b u s in e s s days: $600

$450 (because
maximum
1i a b i l i t y
i s $500)

C 's t o t a l l i a b i l i t y

$500

SITUATION 2 — BOTH $500 AND UNLIMITED LIABILITY PROVISIONS APPLY
DATE

EVENT

June 1

C 's card i s s t o l e n .

June 3

C learns of t h e f t .

June 5

Close of 2 b u s in e s s

June 7

$200 u n a u th o riz e d t r a n s f e r t h a t could have been
p revented had n o t i c e been given by June 5.

June 10

P e rio d i c s ta te m e n t 1s t r a n s m i t t e d t o C ( f o r p e riod
from 5/10 t o 6 / 9 ) .

June 15

$200 un a u tho riz e d t r a n s f e r t h a t could have been
p revented had n o t i c e been given by June 5.

days.

- 16 DATE

EVENT

J u ly 10

P e r io d i c s ta te m e n t o f C 's account i s t r a n s m i t t e d to
C ( f o r p e rio d from 6/10 t o 7 / 9 ) .

August 4

$300 u n a u th o riz e d t r a n s f e r t h a t could have been
p revented had n o t i c e been given by June 5.

August 9

Close o f 60 days a f t e r t r a n s m i t t a l o f s ta t e m e n t
showing u n a u th o riz e d t r a n s f e r .

August 10

P e r io d i c s ta te m e n t of C 's account i s t r a n s m i t t e d to
C ( f o r p e rio d from 7/10 t o 8 / 9 ) .

August 15

$100 u n a u th o riz e d t r a n s f e r t h a t could have been
p revented had n o t i c e been given by August 9.

August 20

C n o t i f i e s bank.

Computation o f C 's l i a b i l i t y :
Paragraph ( b ) ( 1 ) w ill apply t o dete rm in e C's l i a b i l i t y f o r
u n a u th o riz e d t r a n s f e r s t h a t appear on t h e p e r i o d i c s ta t e m e n t and
u n a u th o riz e d t r a n s f e r s t h a t occur b e f o r e th e c l o s e o f t h e 60-day
p e r i o d . (The t r a n s f e r s need not both appear on t h e p e r i o d i c s t a t e ­
ment and o ccu r b e f o r e t h e c l o s e o f t h e 60-day p e r i o d . ) The maximum
l i a b i l i t y under ( b ) ( 1 ) i s $500.
C's l i a b i l i t y :
Amount o f
t r a n s f e r s b e fo re c l o s e
o f 2 b u s in e s s d a y s: $ 0

$ 0

Amount o f
tr a n s f e r s , a f t e r close
of
2 b u s in e s s days and b e fo re c l o s e o f
60-day p e r i o d , t h a t would not have
o ccu rred but f o r C 's f a i l u r e to
n o t i f y w ith in 2 b u s in e s s days: $700

$500

(maximum
liab ility )

Paragraph ( b ) ( 2 ) ( H ) w ill apply t o dete rm ine C 's l i a b i l i t y f o r
t r a n s f e r s o c c u r rin g a f t e r t h e c l o s e o f t h e 60-day p e r i o d . There is
no d o l l a r c e i l i n g on l i a b i l i t y under paragra ph ( b ) ( 2 ) ( H ) .
Amount o f
transfers, after
60 days and b e fo re n o t i c e ,
would not have occurred b u t
f a i l u r e t o n o t i f y w ith in 60
C's t o t a l l i a b i l i t y :

close
of
that
f o r C's
da ys: $100

$100
____
$600

- 17 SITUATION 3 — $5Q/UNLIMITED LIABILITY PROVISIONS APPLY
F a c ts same as in S i t u a t i o n 2, e x ce p t t h a t C does not l e a r n o f t h e
c a r d t h e f t , but q u e s t i o n s t h e account b a la n c e and n o t i f i e s bank on
August 20 o f p o s s i b l e u n a u th o riz e d t r a n s f e r s .
Computation o f C 's l i a b i l i t y
In t h i s s i t u a t i o n only para gra ph ( b ) ( 2 ) a p p l i e s .
C 's l i a b i l i t y :
Amount o f t r a n s f e r s ap pea rin g on
t h e p e r i o d i c s ta t e m e n t o r o c c u r r in g
during t h e 60-day p e r io d : $700

$ 50 (maximum
1i a b i l i t y
for th is
p e rio d )

Amount o f t r a n s f e r s , a f t e r c l o s e o f
60-day p e rio d and b e fo re n o t i c e ,
t h a t would not have occurred but
f o r C 's f a i l u r e t o n o t i f y w ith in 60
days: $100

$100

C's t o t a l l i a b i l i t y :

$150

Knowledge o f l o s s o r t h e f t o f a cc e ss d e v i c e . May a f i n a n c i a l
i n s t i t u t i o n t r e a t t h e consumer's r e c e i p t o f a p e r i o d i c s ta t e m e n t
t h a t r e f l e c t s u n a u th o riz e d t r a n s f e r s as e s t a b l i s h i n g t h a t t h e
consumer had knowledge o f lojss o r t h e f t o f t h e a c c e s s d e v ic e?
4

1

R eceipt o f t h e p e r i o d i c s ta te m e n t r e f l e c t i n g u n a u th o riz e d t r a n s f e r s
may be c o n sid e re d a f a c t o r in determ inin g whether t h e consumer had
knowledge o f t h e l o s s or t h e f t , but cannot be deemed t o r e p r e s e n t
c o n c l u s i v e evidence t h a t th e consumer had such knowledge.
[§ 2 0 5 . 6 ( b ) ]
Notice o f l o s s o r t h e f t . The consumer g iv e s n o t i c e a t an a d d re ss
o r te le p h o n e number o t h e r than t h a t s p e c i f i e d by t h e f i n a n c i a l
in stitu tio n .
Is th e n o t i c e v a l i d f o r purposes o f l i m i t i n g th e
consum er's l i a b i l i t y ?
Yes. The i n s t i t u t i o n has re c eiv e d n o t i c e f o r purposes o f l i m i t i n g
t h e consumer's l i a b i l i t y i f n o t i c e i s given in a re a s o n a b le manner
a t some o t h e r a d d re ss o r te le ph o ne number o f th e i n s t i t u t i o n .
[§ 2 0 5 . 6 ( c ) ]

- 18 6-8

Q:

Notice o f l o s s o r t h e f t - c o n te n t o f n o t i c e . The r e g u l a t i o n r e f e r s
t o t h e consumer's ta k i n g such s t e p s as a r e re a so n a b ly n e c e s s a r y t o
p ro v id e t h e f i n a n c i a l i n s t i t u t i o n with t h e p e r t i n e n t in fo r m a tio n
about t h e l o s s o r t h e f t of an a c c e s s d e v i c e . I f a consumer i s
u n able t o f u r n i s h t h e i n s t i t u t i o n with an account number o r card
number when r e p o r t i n g a l o s t o r s t o l e n a cc e ss d e v i c e , has t h e
consumer given adequate n o tic e ?

A: Yes. In i n s t a n c e s where t h e consumer 1s unable t o p ro v ide t h e
number, t h e n o t i c e i s s t i l l v a l i d f o r purposes o f l i m i t i n g t h e
consum er's l i a b i l i t y i f th e n o t i f i c a t i o n o th e rw is e s u f f i c i e n t l y
i d e n t i f i e s t h e account in q u e s t i o n . Such a s i t u a t i o n could a r i s e ,
f o r example, i f t h e consumer's w a l l e t i s s t o l e n and t h e consumer
i s away from home. [§ 2 0 5 . 6 ( c ) ]
6-9

Q: A p p lic a b le l i a b i l i t y p r o v is io n s - cash advances from c r e d i t l i n e .
A c r e d i t card t h a t i s a l s o an a c c e s s dev ice i s used t o o b ta in
u n a u th o riz e d cash advances from a l i n e o f c r e d i t a t an automated
t e l l e r machine. Do t h e consumer l i a b i l i t y p r o v i s i o n s o f Regula­
t i o n E, o r th o s e o f Regulation Z, apply?
A:

6-10

Q: A pplicable l i a b i l i t y p r o v i s i o n s - checking account with o v e r d r a f t
f e a t u r e . I f t h e u n a u th o riz e d t r a n s f e r s 1n q u e s ti o n 6-9 were i n s t e a d
w ithdra w al? from a checking a c c o u n t, and th e y r e s u l t e d in cash
advances from an o v e r d r a f t l i n e o f c r e d i t , which l i a b i l i t y p r o v i ­
s io n s apply?
A:

6-11

Regulation Z a p p l i e s . Since t h e u n a u th o riz e d cash advances do
not in v o lve a consumer a s s e t a c c o u n t, an e l e c t r o n i c fund t r a n s f e r
has n o t o c cu rre d t h a t would make t h e t r a n s a c t i o n s u b j e c t t o Regula­
t i o n E. [§ 2 0 5 . 6 ( d ) ( 2 ) ]

Regulation E a p p l i e s , because t h e t r a n s f e r was an e l e c t r o n i c fund
t r a n s f e r ; t h e r e was an e x te n sio n o f c r e d i t only as a consequence
o f t h e o v e r d r a f t p r o t e c t i o n f e a t u r e on t h e checking a c c o u n t.
[§ 2 0 5 . 6 ( d ) ( 1 ) ]

Q: A p p lic a b le l i a b i l i t y p r o v is io n s - withdrawals from checking a c c o u n t/
c r e d i t l i n e . I f a consumer's a cc e ss dev ice i s a l s o a c r e d i t card
and t h e d e v ic e i s used t o make un a u tho riz e d w ithdra w als from t h e
checking account and, s e p a r a t e l y , t o o b ta in cash advances d i r e c t l y
from t h e l i n e of c r e d i t , which l i a b i l i t y p r o v is io n s apply?
A:

Both Regulation E and Regulation Z a pply. Regulation E would apply
t o t h e u n a u th o riz e d t r a n s f e r s in v o lv in g th e checking a c c o u n t , while
Regulation Z would apply t o th e t r a n s f e r s in v o lv in g t h e c r e d i t l i n e .
As a r e s u l t , a consumer might be l i a b l e f o r up t o $50 under Regula­
t i o n Z and, in a d d i t i o n , f o r $50, $500 or an u n lim i te d amount under
Regulation E. [§ 2 0 5 . 6 ( d ) ]

- 19 Section 205.7 - - I n i t i a l D i s c l o s u r e o f Terms and C onditions
7-1

Q Timing o f d i s c l o s u r e s - e a r l y d i s c l o s u r e .
r e q u i r e d t o g iv e
c o n t r a c t s f o r an
fund t r a n s f e r t o
p ro v id e s i n i t i a l
a c c o u n t , and t h e
11 months l a t e r ,
re qu ire m e n ts?

A:

An i n s t i t u t i o n i s
i n i t i a l d i s c l o s u r e s e i t h e r (1) when t h e consumer
EFT s e r v i c e o r (2) b e fo re th e f i r s t e l e c t r o n i c
o r from t h e consumer's a cc o u n t. I f an i n s t i t u t i o n
d i s c l o s u r e s when a consumer opens a checking
consumer does not sign up f o r an EFT s e r v i c e u n t i l
has t h e i n s t i t u t i o n s a t i s f i e d th e d i s c l o s u r e

Yes, i f t h e EFT c o n t r a c t i s between th e consumer and a t h i r d p a r t y
f o r p r e a u t h o r i z e d e l e c t r o n i c t r a n s f e r s t o be i n i t i a t e d by t h e t h i r d
p a r t y t o o r from t h e consum er's a c c o u n t. In t h i s c a s e , t h e f i n a n c i a l
i n s t i t u t i o n need n o t r e p e a t d i s c l o s u r e s p r e v i o u s l y given u n le s s
t h e term s and c o n d i t i o n s r e q u i r e d to be d i s c l o s e d a r e d i f f e r e n t
from t h o s e t h a t were g iv e n .
I f , on t h e o t h e r hand, t h e EFT c o n t r a c t i s d i r e c t l y between t h e
consumer and t h e f i n a n c i a l i n s t i t u t i o n — f o r t h e is s u a n c e o f an
a c c e s s d e v i c e , o r f o r a te le p h o n e b ill- p a y m e n t p l a n , f o r example
— t h e i n s t i t u t i o n should provid e th e d i s c l o s u r e s a t t h e tim e o f
c o n t r a c t i n g . D is c lo s u re s given b e fo re t h e time o f c o n t r a c t i n g w ill
s a t i s f y t h e r e g u l a t i o n only i f th e y occurred in c l o s e proxim ity
t h e r e t o . [§ 2 0 5 . 7 ( a ) ]

7-2

Q: Timing o f d i s c l o s u r e s - Social
S e c u rity d i r e c t d e p o s i t s . In t h e
c ase of Social S e c u r i t y d i r e c t
d e posits, the financial in s titu ti o n
r e c e i v e s no p r e n o t i f i c a t i o n . How can t h e i n s t i t u t i o n comply with
t h e d i s c l o s u r e requirem ents?
A:

7-3

Q: Form o f d i s c l o s u r e s . Are t h e r e s p e c ia l r u l e s f o r d i s c l o s u r e s t a t e ­
ments concerning such m a t t e r s as ty pe s i z e , number o f pag es, o r th e
r e l a t i v e conspic uousness o f v a rio u s terms?
A:

7-4

Before d i r e c t d e p o s i t o f Social S e c u rity payments can o c c u r , both
t h e consumer and t h e i n s t i t u t i o n must complete a Form 1199. The
i n s t i t u t i o n can make d i s c l o s u r e s a t t h a t tim e . [§ 2 0 5 . 7 ( a ) ]

No. The r e g u l a t i o n imposes no requirements concernin g m a t t e r s of
form, although i t does s p e c i f y t h a t t h e d i s c l o s u r e s must be given
in a r e a d i l y u n d e rs ta n d a b le w r i t t e n statem e n t t h a t t h e consumer
may r e t a i n . [§ 2 0 5 .7 ( a ) ]

Q: Spanish language d i s c l o s u r e s .
In Puerto Rico, where communications
normally a r e in Spanis h, may a f i n a n c i a l i n s t i t u t i o n p ro vid e th e
re q u ir e d d i s c l o s u r e s in Spanish?
A:

Yes, d i s c l o s u r e s in Spanish w ill s a t i s f y t h e r e a d i l y understandaDle
r e q u ire m e n t, provided t h a t d i s c l o s u r e s in English a r e given t o con­
sumers who r e q u e s t them. [§ 2 0 5 .7 ( a ) ]

- 20 D is c l o s u r e s co v ering a l l EFT s e r v i c e s o f f e r e d . Must t h e d i s c l o s u r e
s ta te m e n t given t o a consumer r e l a t e only t o th e p a r t i c u l a r EFT
s e r v i c e s t h a t t h e consumer w ill re c e iv e ?
An i n s t i t u t i o n may pro v id e a d i s c l o s u r e s ta te m e n t cov ering a l l t h e
EFT s e r v i c e s t h a t t h e i n s t i t u t i o n o f f e r s , even i f some consumers
r e c e i v i n g t h e d i s c l o s u r e s have not arranged t o use a l l t h e s e r v i c e s .
[§ 2 0 5 . 7 ( a ) ]
Addition o f new EFT s e r v i c e s . A consumer s ig n s up f o r an EFT
s e r v i c e and r e c e i v e s d i s c l o s u r e s . I f t h e consumer l a t e r a r r a n g e s
f o r o t h e r EFT s e r v i c e s from th e same i n s t i t u t i o n , must a d d i t i o n a l
d i s c l o s u r e s be given?
Yes, i f t h e new s e r v i c e i s s u b j e c t t o term s and c o n d i t i o n s d i f f e r e n t
from th o s e given in t h e i n i t i a l d i s c l o s u r e s . Only t h e d i s c l o s u r e s
f o r t h e a d d i t i o n a l s e r v i c e need be g iv e n . This i s a l s o t h e c a s e
i f t h e i n s t i t u t i o n begin s t o f u r n i s h a new s e r v i c e upon renewal o f
an a c c e s s d e v i c e . (See q u e s ti o n 5 - 2 . ) [§ 2 0 5 . 7 ( a ) ]
D i s c l o s u r e s about u n a u th o riz e d t r a n s f e r s - p re a u th o r iz e d t r a n s f e r s ,
i f t h e only e l e c t r o n i c fund t r a n s f e r s from an account a r e p r e a u t h o ­
r i z e d t r a n s f e r s , must t h e i n s t i t u t i o n make a l i a b i l i t y d i s c l o s u r e
re g a rd in g u n a u th o riz e d t r a n s f e r s , and p rov id e a te le p h o n e number
and a d d re s s f o r r e p o r t i n g p o s s i b l e u n a u th o riz e d t r a n s f e r s ?
Yes, u n l e s s t h e i n s t i t u t i o n
The d i s c l o s u r e o f l i a b i l i t y
e x i s t i f t h e consumer f a i l s
a r e r e f l e c t e d on a p e r i o d i c
[§ 2 0 5 . 7 ( a ) ( 1 ) and ( 2 ) ]

chooses not t o Impose any l i a b i l i t y .
should r e f l e c t t h a t l i a b i l i t y could
t o r e p o r t u n a uth o riz e d t r a n s f e r s t h a t
s t a t e m e n t . (See q u e stio n 6 - 1 . )

D is c lo s u r e s about u n a u th o riz e d t r a n s f e r s - no l i a b i l i t y imposed.
I t an i n s t i t u t i o n chooses not t o impose any l i a b i l i t y t o r unautho­
r i z e d e l e c t r o n i c fund t r a n s f e r s , must i t make any l i a b i l i t y d i s c l o ­
s u re ?
No; t h e d i s c l o s u r e i s i n a p p l i c a b l e . I f t h e i n s t i t u t i o n l a t e r
d e c i d e s t o impose l i a b i l i t y , however, i t must make t h e l i a b i l i t y
d i s c l o s u r e b e f o r e i t can do s o . [§ 2 0 5 . 7 ( a ) ( 1 ) and ( 2 ) ]
Summary d i s c l o s u r e o f r i g h t s . Several r e q u i r e d d i s c l o s u r e s r e l a t e
t o a consumer's r i g h t s under t h e a c t and r e g u l a t i o n . Must th e
d i s c l o s u r e s s p e l l o ut t h e s e r i g h t s in f u l l , as they a r e s e t f o r t h
in th e a c t and r e g u l a t i o n ?
No. These m a t t e r s can be d i s c l o s e d by means o f summary d e s c r i p t i o n s .
(For examples showing t h e amount o f d e t a i l t h a t needs t o be p ro v id e d ,
see t h e model d i s c l o s u r e c la u s e s in Appendix A.) [S 2 0 5 . 7 ( a ) ( 1 ) .
( 6 ) , (7) and (8 ) ]

- 21 7-10

Type o f t r a n s f e r - p r e a u t h o r i z e d t r a n s f e r s . Must p r e a u t h o r i z e d
t r a n s f e r s be d i s c l o s e d as a ty p e o f e l e c t r o n i c fund t r a n s f e r t h a t
t h e consumer may make?

A:

7-11

Q:

No. An i n s t i t u t i o n need not l i s t p r e a u t h o r i z e d t r a n s f e r s as one
of t h e ty p e s o f t r a n s f e r s t h a t a consumer can make, a lth o u g h i t i s
p e r m i s s i b l e t o do s o . [§ 2 0 5 . 7 ( a ) ( 4 ) ]

Q: L i m i t a t i o n s on t r a n s f e r s . How much must t h e consumer be t o l d
about l i m i t a t i o n s on frequency and d o l l a r amount o f t r a n s f e r s ?
A:

7-12

The general r u l e i s t h a t in fo rm a tio n on t h e s e l i m i t a t i o n s must be
d i s c l o s e d in d e t a i l t o consumers. This i s so even i f t h e l i m i t a ­
t i o n s a r e r e l a t e d t o t h e s e c u r i t y a s p e c t s o f t h e e l e c t r o n i c fund
t r a n s f e r system . The r e g u l a t i o n p r o v i d e s , however, t h a t t o th e
e x t e n t c o n f i d e n t i a l i t y o f c e r t a i n d e t a i l s i s dete rm ined by th e
i n s t i t u t i o n t o be e s s e n t i a l t o th e s e c u r i t y o f t h e account o r th e
sy ste m , t h e d e t a i l s may be w ith h e ld — b u t t h e f a c t t h a t t h e r e a re
l i m i t a t i o n s must be d i s c l o s e d . [§ 2 0 5 . 7 ( a ) ( 4 ) ]

Q: D is c lo s u r e o f charges - same p e r - it e m charge f o r EFT/non-EFT. The
r e g u l a t i o n r e q u i r e s d i s c l o s u r e o f ch arg es f o r e l e c t r o n i c fund t r a n s ­
f e r s or f o r t h e r i g h t t o make t r a n s f e r s .
I f a p e r - t r a n s f e r charge
f o r e l e c t r o n i c fund t r a n s f e r s i s t h e same as th e p e r - it e m charge
f o r n o n - e l e c t r o n i c t r a n s f e r s , must t h e EFT charge be d i s c l o s e d ?
A:

7-14

Q:

D is c lo s u r e o f ch arg es - charge imposed under c e r t a i n c o n d i t i o n s .
I f an i n s t i t u t i o n imposes p e r - it e m c h arg es only under c e r t a i n con­
d i t i o n s (when t h e t r a n s a c t i o n s f o r th e c y c l e exceed a c e r t a i n
number, f o r exam ple), must t h e i n s t i t u t i o n d i s c l o s e what th o s e
c o n d i t i o n s a re ?

A:

7-13

Yes, such c h arg es must be d i s c l o s e d . I f an i n s t i t u t i o n does not
wish t o i te m iz e t h e v a r io u s charges on t h e d i s c l o s u r e s t a t e m e n t ,
i t may d i s c l o s e them in an accompanying document given along with
t h e p r i n c i p a l d i s c l o s u r e s t a t e m e n t . I f an i n s e r t i s u s e d , th e
d i s c l o s u r e s ta t e m e n t must r e f e r t o t h e accompanying document.
[§ 2 0 5 . 7 ( a ) ( 5 ) ]

Yes. Again, t h i s in fo rm a tio n may be provided in a s e p a r a t e docu­
ment en closed with and re fe re n c e d by t h e EFT d i s c l o s u r e s .
[§ 2 0 5 . 7 ( a ) ( 5 ) ]

Q:

D is c lo s u re o f c h arg es - f ix e d s e r v i c e c h a r g e . I f a f i x e d s e r v i c e
charge i s a s s e s s e d only when t h e b a la nce in t h e account f a l l s
below a c e r t a i n minimum, must i t be d i s c l o s e d ?

A:

No, s i n c e t h e r e 1s no charge a t t r i b u t a b l e t o an EFT s e r v i c e .
[§ 2 0 5 . 7 ( a ) ( 5 ) ]

- 22 D i s c l o s u r e o f charges - s t o p - p a y m e n t / d i s h o n o r / o v e r d r a f t . Does t h e
r e g u l a t i o n r e q u i r e d i s c l o s u r e o f c harg es f o r stop-payment o r d e r s ,
dishonor, or ov erd rafts?

7-15

A

No. These a r e not charges f o r e l e c t r o n i c fund t r a n s f e r s o r f o r th e
r i g h t t o make such t r a n s f e r s . D is c lo s u r e i s p e r m i s s i b l e , however.
(See model d i s c l o s u r e c l a u s e A(9) in Appendix A.) [§ 2 0 5 . 7 ( a ) ( 5 ) ]
D is c lo s u r e about p riv a c y o f account i n f o r m a t i o n . The r e g u l a t i o n
r e q u i r e s an i n s t i t u t i o n t o l i s t t h e c irc u m s ta n c e s under which, in
t h e o r d i n a r y c o u rs e o f b u s i n e s s , i t w ill d i s c l o s e in fo r m a tio n t o
t h i r d p a r t i e s about an a cc o u n t.
I f a consumer holds two accounts
in an i n s t i t u t i o n — account #1 has EFT s e r v i c e , b u t account #2
does not — does t h e requirem ent apply t o both acc o u n ts ?

7-16

A

7-17

The r e q u i r e d d i s c l o s u r e r e l a t e s only t o account #1, which has an
EFT s e r v i c e . However, th e i n s t i t u t i o n must d e s c r i b e t h e c irc u m ­
s t a n c e s under which any info rm a tio n r e l a t i n g t o t h a t account (not
j u s t in fo r m a tio n concernin g e l e c t r o n i c fund t r a n s f e r s ) w ill be
made a v a i l a b l e t o t h i r d p a r t i e s . [§ 2 0 5 . 7 ( a ) ( 9 ) ]
D is c lo s u re about p riv a c y - meaning o f t h i r d p a r t i e s . For purposes
o f t h i s d i s c l o s u r e re q u ire m e n t, does t h e term t h i r d p a r t i e s i n c lu d e
o t h e r s u b s i d i a r i e s o f t h e same holding company?

A:

7-19

Q:

E r ro r r e s o l u t i o n d i s c l o s u r e . The r e g u l a t i o n c o n t a i n s an e r r o r
resolution notice,
is t h i s n o t i c e a model d i s c l o s u r e c l a u s e t h a t
t h e i n s t i t u t i o n may use a t i t s o p tio n ?

A:

7-18

Yes.

[§ 2 0 5 . 7 ( a ) ( 9 ) ]

The e r r o r r e s o l u t i o n n o t i c e i s a r e q u ir e d d i s c l o s u r e and must be
given in a form s u b s t a n t i a l l y s i m i l a r t o t h a t ap pea ring in t h e
r e g u l a t i o n . An i n s t i t u t i o n may, however, d e l e t e i n a p p l i c a b l e
p r o v i s i o n s ( e . g . , t h e requirem ent o f w r i t t e n c o n firm a ti o n o f an
o r a l n o t i f i c a t i o n ) ; s u b s t i t u t e t r a d e names; s u b s t i t u t e s u b s t a n t i v e
s t a t e law re q u ire m e n ts t h a t a f f o r d g r e a t e r consumer p r o t e c t i o n
th a n t h e r e g u l a t i o n ; o r even use d i f f e r e n t wording — so long as
t h e s u b sta n c e o f t h e n o t i c e remains s u b s t a n t i a l l y t h e same.
[§ 2 0 5 . 7 ( a ) (1 0 ) ]

Q:

D is c lo s u re s in v o lv in g te le p h o n e numbers. Several d i s c l o s u r e s
in v o lv e te le p h o n e numbers: numbers f o r r e p o r t i n g l o s s o r t h e f t of
an a c c e s s d e v ic e o r p o s s i b l e u n a uth o riz e d t r a n s f e r s , f o r i n q u i r i n g
about r e c e i p t o f a p re a u th o r iz e d c r e d i t , f o r s to p p in g payment o f a
p r e a u t h o r i z e d d e b i t , and f o r g iv in g n o t i c e o f e r r o r . May an i n s t i ­
t u t i o n use a s i n g l e te le p h o n e number f o r a l l t h e s e pu rposes?

A:

Yes. C onversely , an i n s t i t u t i o n could use d i f f e r e n t te le p h o n e
numbers f o r one o r more o f t h e s e p u rp o ses. [§ 2 0 5 . 7 ( a ) ( 2 ) , ( 6 ) ,
( 7 ) , and (1 0 ) ]

- 23 7-20

Q:

D is c lo s u r e s in v o lv in g te le p h o n e numbers. Must t h e te le p h o n e number
(o r l i s t o f numbers) r e f e r r e d t o in q u e s ti o n 7-19 be in c o r p o r a t e d
i n t o t h e t e x t o f t h e d i s c l o s u r e t o which i t r e l a t e s ?

A:

No. The i n s t i t u t i o n may i n s t e a d i n s e r t a r e f e r e n c e t o a te le p h o n e
number t h a t i s r e a d i l y a v a i l a b l e t o t h e consumer ( f o r example:
" c a l l your branch o f f i c e - - t h e number i s shown on y o u r p e r i o d i c
s t a t e m e n t " ) , ex cep t f o r t h e te le p h o n e number t o be used fo r
r e p o r t i n g a l o s t o r s t o l e n a cc e ss d e v i c e . In t h e l a t t e r c a s e , t h e
i n s t i t u t i o n must d i s c l o s e a s p e c i f i c te le p h o n e number on o r w ith
t h e d i s c l o s u r e s t a t e m e n t . [§ 2 0 5 . 7 ( a ) ( 2 ) , ( 6 ) , (7) and (1 0 ) ]

S ection 205.8 — Change in Terms; E r ro r R eso lutio n Notice
8-1

Q:

Change in te le p h o n e number o r a d d r e s s . Is an i n s t i t u t i o n r e q u i r e d
t o d i s c l o s e a change in t h e te le p h o n e number o r a d d re ss f o r r e p o r t i n g
p o s s i b l e u n a u th o riz e d t r a n s f e r s ?
No, but i t must do so i f i t wishes t o impose any l i a b i l i t y on t h e
consumer f o r such t r a n s f e r s . [§§ 2 0 5 . 8 ( a ) , 2 0 5 . 6 ( a ) ( 3 ) ]

Q:

Closing down o f ATMs. I f an i n s t i t u t i o n c l o s e s down some o f i t s
automated t e l l e r machines, must i t d i s c l o s e t h i s change?

A:
8-4

Examples o f changes t h a t must be d i s c l o s e d a r e : an i n c r e a s e in
t h e consum er's l i a b i l i t y f o r u n a u th o riz e d e l e c t r o n i c fund t r a n s f e r s ;
a d e c r e a s e in a v a i l a b l e ty p e s o f e l e c t r o n i c fund t r a n s f e r s ; an
i n c r e a s e d s t r i c t n e s s in l i m i t a t i o n s on frequency or d o l l a r amount
o f t r a n s f e r s (w ith c e r t a i n e x c e p t i o n s ; see q u e s ti o n 8 - 4 ) ; an
i n c r e a s e in ch arg es f o r e l e c t r o n i c fund t r a n s f e r s o r t h e r i g h t t o
make t r a n s f e r s , o r t h e im p o s itio n o f such c h arges f o r t h e f i r s t
t i m e . [§§ 2 0 5 . 8 ( a ) ]

A:
8-3

Terms r e q u i r i n g c h a n g e -in - te rm s n o t i c e . What c a t e g o r i e s o f i n i t i a l
d i s c l o s u r e s a r e s u b j e c t t o t h e c h a n g e -in - te rm s n o t i c e requirem ent?

A:

8-2

Q:

No; such a change does not r e l a t e t o an item r e q u i r e d t o be given
in t h e i n i t i a l d i s c l o s u r e s . [§§ 2 0 5 . 8 ( a ) , 2 0 5 . 7 ( a ) ]

Q:

Changes in l i m i t a t i o n s on t r a n s f e r s . An i n s t i t u t i o n l i m i t s t h e
amount of money t h a t consumers can withdraw d a i l y from i t s ATMs.
Because s e c re c y o f t h e l i m i t s i s e s s e n t i a l t o m a in ta in in g th e
s e c u r i t y o f t h e accounts o r t h e system a g a i n s t t h e f t , t h e d e t a i l s
o f t h e l i m i t s were not s t a t e d in t h e i n i t i a l d i s c l o s u r e s . The i n s t i
t u t i o n d i s c l o s e d only t h a t c e r t a i n l i m i t s e x i s t .
If the lim i ts are
now made s t r i c t e r , what must t h e i n s t i t u t i o n d i s c l o s e t o i t s
customers?

- 24 A:

8-5

No d i s c l o s u r e i s r e q u i r e d , provided s e c re c y i s s t i l l e s s e n t i a l .
In c o n t r a s t , i f t h e i n s t i t u t i o n had no d o l l a r l i m i t s when i t made
t h e i n i t i a l d i s c l o s u r e s , and i s now imposing l i m i t s f o r t h e f i r s t
t i m e , i t must d i s c l o s e a t l e a s t th e f a c t t h a t l i m i t s have been
a d o p te d . [§§ 2 0 5 . 8 ( a ) , 2 0 5 . 7 ( a ) ( 4 ) ]

Q:

Termination o f EFT s e r v i c e . I f an i n s t i t u t i o n t e r m i n a t e s a con­
s u m e r 's A o r POS s e r v i c e by c a n c e l l i n g t h e a c c e s s d e v i c e , must
TM
i t p ro v id e a d i s c l o s u r e ?

A: No. But i f th e s e r v i c e in v o lv e s c r e d i t (because t h e d e v ic e i s a
combined c r e d i t c a r d / a c c e s s d e v i c e , f o r exam ple), n o t i f i c a t i o n under
§ 2 0 2 .9 (a ) o f R egulation B (Equal C re d it O pp ortun ity) may be r e q u i r e d .
I f a c r e d i t r e p o r t was involv ed in t h e d e c i s i o n t o cancel t h e com­
bin ed c a r d , n o t i f i c a t i o n under § 615(a) o f t h e F a i r C r e d it Reporting
Act a l s o may be r e q u i r e d . [§ 2 0 5 . 8 ( a ) ]
8-6

Q: Form o f c h a n g e -in - te rm s n o t i c e . May an i n s t i t u t i o n giv e n o t i c e of
a change in te rms by sending c o p ie s o f i t s r e v i s e d d i s c l o s u r e
s ta te m e n t?
A:

8-7

Q: E r ro r r e s o l u t i o n n o t i c e - no p e r i o d i c s ta t e m e n ts s e n t . An i n s t i t u ­
t i o n must e i t h e r prov id e I t s customers with t h e f u l l e r r o r r e s o l u ­
t i o n n o t i c e a n n u a l l y , o r i n c lu d e a s h o r t- f o r m n o t i c e on o r with
each p e r i o d i c s t a t e m e n t . I f an i n s t i t u t i o n does n o t send p e r i o d i c
s ta t e m e n ts t o c e r t a i n EFT c u sto m e rs, how should i t comply with
t h i s requirement?
A:

8-8

Yes, provid ed a t t e n t i o n i s d i r e c t e d t o t h e change ( f o r example, in
a c ov er l e t t e r r e f e r e n c i n g t h e changed t e r m ) . No s p e c i f i c form or
wording i s r e q u i r e d . The n o t i c e may appear on a p e r i o d i c s t a t e m e n t .
[§ 2 0 5 . 8 ( a ) ]

I t must send t h e f u l l e r r o r r e s o l u t i o n n o t i c e a n n u a l l y .

[§ 2 0 5 . 8 ( b ) ]

Q: E r ro r r e s o l u t i o n n o t i c e - changeover from one form t o o t h e r . An
I n s t i t u t i o n sends annual long-form e r r o r r e s o l u t i o n n o t i c e s .
If
i t wishes t o adopt t h e s h o rt-f o rm a l t e r n a t i v e , when must t h e f i r s t
s h o r t- f o r m n o t i c e be s e n t?
A:

No l a t e r than 12 months a f t e r t h e l a s t long-form n o t i c e was s e n t .
C o n v ersely , i f an i n s t i t u t i o n wants t o switch t o t h e long form, th e
f i r s t long-form n o t i c e should be s e n t no l a t e r th an 12 months a f t e r
t h e l a s t s h o rt-f o rm n o t i c e . [§ 2 0 5 .8 (b ) ]

- 25 S e c tion 205.9 - - Documentation o f T r a n s f e r s
NOTE:

9-1

Some q u e s t i o n s in t h i s s e c t i o n r e l a t e t o both t h e r e c e i p t and th e
p e r i o d i c s ta t e m e n t requ ire m e nts o f § 2 0 5 .9 (a ) and ( b ) . These a re
i d e n t i f i e d by a R e c e i p t s / p e r i o d i c s ta t e m e n ts c a t c h l i n e and appear
t o g e t h e r fo llo w in g t h e q u e s t i o n s t h a t deal s o l e l y with § 2 0 5 .9 (a )
or § 205.9(b).
R ec e ip ts - fu r n is h e d only on r e q u e s t . An i n s t i t u t i o n ' s e l e c t r o n i c
t e r m i n a l s a r e programmed t o p ro v id e a r e c e i p t only i f th e consumer
e l e c t s t o r e c e i v e one by p r e s s i n g a key a t t h e time o f t h e t r a n s f e r
Does t h i s comply with t h e r e g u l a t i o n ?

A:

9-2

Q:

Yes; t h e r e g u l a t i o n merely r e q u i r e s t h a t a r e c e i p t be made a v a i l ­
a b l e t o t h e consumer a t t h e tim e o f t h e t r a n s f e r .
(There i s a
l i m i t e d e x c e p tio n t o t h e r e c e i p t req uire m e n t under § 2 0 5 . 9 ( f ) f o r
c e r t a i n c a s h - d i s p e n s i n g machin es, bu t only i f t h e machines were
purchased or o rd e re d b e f o r e February 6 , 1980.) [§ 2 0 5 . 9 ( a ) ]

Q: R ec e ip ts - a v a i l a b l e through t h i r d p a r t i e s . What i s t h e purpose o f
t h e f o o t n o t e in t h e r e g u l a t i o n t h a t pe rm its f i n a n c i a l i n s t i t u t i o n s
t o make te rm in a l r e c e i p t s a v a i l a b l e thro u g h t h i r d p a r t i e s ?
A:

9-3

I t p e rm its i n s t i t u t i o n s t o a r r a n g e f o r o p e r a t o r s o f t e r m i n a l s in an
EFT system (merchants o r o t h e r f i n a n c i a l i n s t i t u t i o n s , f o r example)
t o make t h e r e c e i p t a v a i l a b l e . However, t h e f i n a n c i a l i n s t i t u t i o n
holding t h e consum er's account o r p ro v id in g th e EFT s e r v i c e t o th e
consumer remains r e s p o n s i b l e f o r t h e a v a i l a b i l i t y o f t h e r e c e i p t .
[§ 2 0 5 . 9 ( a ) , f o o t n o t e 2]

Q: R ec e ip ts - in fo r m a tio n d is p la y e d on s c r e e n . Does a f i n a n c i a l i n s t i
t u t l o n comply with t h e r e c e i p t req u irem en t i f i t simply p r i n t s t h e
r e c e i p t in fo r m a tio n on a d i s p l a y s c ree n ?
A:

9-4

No. The r e c e i p t must be in a w r i t t e n form t h a t t h e consumer can
r e t a i n . [§ 2 0 5 . 9 ( a ) ]

Q:

R eceip ts - form. Are t h e r e s p e c ia l r u l e s r e g a rd in g ty p e s i z e ,
le n g th o f r e c e i p t , and so f o r t h ?

A:

No. The r e g u l a t i o n does r e q u i r e , however, t h a t t h e in fo r m a tio n on
t h e r e c e i p t be s e t f o r t h c l e a r l y . A s e r i e s o f u n l a b e l l e d numbers
o r codes f o r v a rio u s ty p e s o f i n f o r m a t i o n , i f not r e a d i l y un d e r­
s t a n d a b l e on t h e i r f a c e , would n o t be c l e a r l y s e t f o r t h w ith in th e
meaning o f t h e r e g u l a t i o n . The i n s t i t u t i o n may document in d i v i d u a l
t r a n s f e r s on s e p a r a t e r e c e i p t s , even though t h e consumer
makes
m u l t i p l e t r a n s f e r s a t t h e same t i m e , or i t may document them on a
s i n g l e r e c e i p t . [§ 2 0 5 . 9 ( a ) ]

- 26 R ec e ip ts - t r a n s f e r not com ple te d. Does t h e te rm in a l r e c e i p t
re quirem ent apply i f a t r a n s f e r 1s i n i t i a t e d but not completed
(because th e ATM i s o u t o f c u r r e n c y , f o r example)?
No; however, most t e r m i n a l s g e n e r a t e a r e c e i p t even i f a t r a n s f e r
i s not completed because o f a te rm in a l m a lfu n c tio n o r because th e
consumer d ecided not t o complete t h e t r a n s f e r . [§ 2 0 5 . 9 ( a ) ]
R ec e ip ts - not f u r n i s h e d ; i n a d v e r t e n t e r r o r . Does a v i o l a t i o n
r e s u l t i f a te rm in a l runs o u t o f paper and a r e c e i p t i s n o t made
a v a i l a b l e t o t h e consumer?
No, so long as i t i s a bona f i d e u n i n t e n t i o n a l e r r o r and th e f i n a n ­
c i a l i n s t i t u t i o n m a in ta in s pro c e du re s re a so n a b ly adapted t o avoid
such an e r r o r . [§ 2 0 5 . 9 ( a ) , § 9 1 5 (c )]
R ec e ip ts - d a t e . May a f i n a n c i a l i n s t i t u t i o n d i s c l o s e an a c c o u n tin g
o r b u s in e s s d a te on t h e te rm in a l r e c e i p t ?
The c a l e n d a r d a t e on which t h e consumer uses t h e e l e c t r o n i c te rm in a l
must be d i s c l o s e d ; an a cc ou n ting o r b u s in e s s d a t e may be d i s c l o s e d
in a d d i t i o n , so long as t h e d a t e s a r e c l e a r l y d i s t i n g u i s h e d .
If a
t r a n s f e r i s i n i t i a t e d l a t e one day and completed on t h e ne xt da y,
t h e f i n a n c i a l i n s t i t u t i o n may d i s c l o s e e i t h e r c a l e n d a r d a t e on th e
r e c e i p t . [§ 2 0 5 . 9 ( a ) ( 2 ) ]
R ec e ip ts - a cc e ss t o m u l t i p l e accounts o f same t y p e . How should
t h e ty p e o f account be d i s c l o s e d on t h e te rm in a l r e c e i p t when more
than one account o f t h e same ty p e can be acc e ss e d by t h e consumer's
a c c e s s devic e?
Some examples: I f an a cc e ss d e v ic e can be used by t h e consumer t o
make t r a n s f e r s t o or from two checking a c c o u n ts , t h e term inal
r e c e i p t must s p e c i f y which o f t h e two has been a c c e s s e d ; a f i n a n ­
c i a l i n s t i t u t i o n could d i s c l o s e a cash withdrawal as "withdrawal
from checking I" or "withdrawal from checking I I . "
I f only one
a ccount b e s id e s t h e primary checking account can be d e b i t e d by th e
a c c e s s d e v i c e , i t could be i d e n t i f i e d as "withdrawal from o t h e r
a c c o u n t." The number o f t h e account being a ccessed could be used
both t o i d e n t i f y t h e ty p e o f account and t o s e r v e as th e unique
i d e n t i f i e r o f t h e acco un t. [§ 2 0 5 .9 ( a ) ( 3 ) and ( 4 ) ]
R ec e ip ts - ty pe o f account in POS t r a n s f e r . A f o o t n o t e s t a t e s
t h a t t h e ty p e o f account need not be i d e n t i f i e d i f t h e acc e ss
d e v ic e used t o i n i t i a t e th e t r a n s f e r can a cc e ss only one account
o f any ty p e in a p o i n t - o f - s a l e t r a n s f e r . Does t h i s e x ce p tio n
apply when t h a t d e v ic e i s used a t an ATM
?
The e x ce p tio n i s g e n e r a l l y not a v a i l a b l e f o r ATM t r a n s f e r s , even
i f t h e access devic e i s capable of a c c e s s in g only one account a t
an ATM. (There i s a l i m i t e d e x ceptio n f o r c e r t a i n c a s h - d is p e n s in g
machines under § 2 0 5 . 9 ( f ) , but only i f t h e machines were purchased
o r o rd ered b e fo re February 6, 1980.)

- 27 The e x c e p tio n f o r POS t r a n s f e r s i s a v a i l a b l e even i f
th e a c c e s s
d e v ic e can a c c e s s more th an one account when used a t a d i f f e r e n t
type of f a c i l i t y ,
such as an ATM. Moreover, account r e f e r s o nly
t o a s s e t a c c o u n ts . I f a consumer can use an a c c e s s d e v ic e a t a
POS te rm in a l t o d e b i t an a s s e t account and a l s o t o a c c e s s a c r e d i t
l i n e , f o r example, t h e exemption i s s t i l l a v a i l a b l e . [§ 2 0 5 . 9 ( a ) ( 3 ) ,
f o o t n o t e 3]
9-10

Q:

R ec e ip ts - ty p e o f a c c o u n t, o f f - l i n e ATMs.

A financial i n s t i t u t i o n 's

ATMs p erm it a c c e s s t o m u l t i p l e a c c o u n ts o f t h e same ty p e when th e
ATM i s o n - l i n e , and r e c e i p t s uniquely i d e n t i f y t h e a c c o u n ts by use
o f account numbers. When t h e ATM i s o f f - l i n e , however, a c c e s s is
p e r m itt e d only t o a primary account d e s ig n a te d by t h e consumer
in advance. The consumer i s informed a t t h e ATM t h a t o nly t h e
primary account can be accessed a t t h a t t i m e . May t h e r e c e i p t
d e s c r i b e t h e t r a n s f e r as a "withdrawal from c h e c k in g ," f o r example,
w ith o u t a unique i d e n t i f i c a t i o n o f t h e account?
A:

9-12

Q:

R ec e ip ts - unique i d e n t i f i e r . Does t h e f i n a n c i a l i n s t i t u t i o n have
f l e x i b i l i t y in p ro v id in g a number o r code t h a t u n iq u e ly i d e n t i f i e s
t h e consumer, t h e c o nsum er's a c c o u n t, o r t h e a c c e s s d e v ic e used to
in iti a te a transfer?

A:

9-11

Yes. Because t h e consumer can a cc e ss only t h e primary account a t
t h e time o f t h e o f f - l i n e t r a n s f e r , unique i d e n t i f i c a t i o n o f t h e
account i s n o t r e q u i r e d . [§ 2 0 5 . 9 ( a ) ( 3 ) , f o o t n o t e 3]

Yes. Any unique i d e n t i f i c a t i o n t h a t w ill l i n k t h e consumer t o th e
p a r t i c u l a r t r a n s f e r i s s u f f i c i e n t t o comply with t h i s re q u ire m e n t.
[§ 2 0 5 . 9 ( a ) ( 4 ) ]

Q: R eceip ts - te rm in a l l o c a t i o n . A f i n a n c i a l i n s t i t u t i o n wants t o
d i s c l o s e t h e l o c a t i o n o f t h e te rm in a l on t h e te rm in a l r e c e i p t by
g iv in g a d e s c r i p t i o n in one o f t h e t h r e e forms p r e s c r i b e d in th e
r e g u l a t i o n . How may i t s a t i s f y t h e requirement?
A:

9-13

The i n s t i t u t i o n may, f o r example, p r e p r i n t t h e te rm in a l l o c a t i o n s
on i t s r e c e i p t s . An i n s t i t u t i o n t h a t owns o r o p e r a t e s t e r m i n a l s
a t only one l o c a t i o n may use i t s name (such as " F i r s t N a t ' l " ) . A
n
i n s t i t u t i o n w ith t e r m i n a l s in s ev e ra l l o c a t i o n s must use a s t r e e t
a d d re ss o r a g e n e r a l l y accepted name f o r a s p e c i f i c l o c a t i o n .
[§ 2 0 5 . 9 ( a ) ( 5 ) and ( b ) ( l ) ( i v ) ]

Q: R eceip ts - omission o f t h i r d - p a r t y name. Under what c irc u m s tan c e s
may t h e name o f a t h i r d p a r t y ( t o or from whom funds a r e t r a n s f e r r e d )
be o m itted from t h e te rm in a l r e c e i p t ?
A:

The name may be om itted i f t h e consumer p ro v id e s t h e name in a form
t h a t t h e e l e c t r o n i c te rm in a l cannot d u p l i c a t e on t h e r e c e i p t . For
example, i f a consumer i n i t i a t e s a u t i l i t y payment a t an A and
TM
p rov id e s th e name o f t h e payee by i n s e r t i n g a payment s tu b i n t o
t h e ATM, t h e term in al r e c e i p t need not name t h e u t i l i t y company.
(The name would have t o appear on t h e p e r i o d i c s t a t e m e n t , o f c o u r s e . )

I

- 28 On t h e o t h e r hand, i f t h e consumer keys in t h e i d e n t i t y o f th e payee
(by means o f a code number, f o r example) t h e r e c e i p t must name t h e
p ay ee, o r use a code t h a t i s e x p la in e d elsew here on t h e r e c e i p t .
The i n s t i t u t i o n may, f o r example, p r e p r i n t a s e r i e s o f codes and
t h e s p e c i f i c payees t o which th e y r e l a t e on t h e form — and p r i n t
t h e c o r r e c t code a t t h e tim e o f t h e t r a n s f e r . [§ 2 0 5 . 9 ( a ) ( 6 ) ]
(The r e g u l a t i o n does not apply t o b i l l payments made a t an ATM by
check o r c u r r e n c y . See q u e s tio n 2 -1 0 .)
9-14

R ec e ip ts - d e p o s i t r e c e i p t as p roof o f payment. Se ction 9 0 6 (f ) of
t h e a c t p ro v id e s t h a t r e q u i r e d documentation c o n s t i t u t e s prima f a c i e
p roof o f payment t o a n o th e r p e rs o n ; does t h i s p r o v i s i o n apply t o a
t e rm in a l r e c e i p t documenting a d e p o s i t ?

A:

No, because t h e r e i s no payment t o a n o th e r p e rs o n .

Q:

P e r i o d i c s ta t e m e n ts - when r e q u i r e d . The r e g u l a t i o n r e q u i r e s
p e r i o d i c s ta t e m e n ts t o be s e n t f o r any account t o o r from which
e l e c t r o n i c fund t r a n s f e r s can be made. What does t h i s mean?

A

9-15

Q
:

The req u irem en t a p p l i e s only t o th o s e acco u nts f o r which an a g r e e ­
ment has been e n t e r e d i n t o : (1) between t h e consumer and t h e f i n a n ­
c i a l i n s t i t u t i o n f o r EFT s e r v i c e s t o or from th e account ( i n c l u d i n g
acco u n ts f o r which an a c c e s s d e v ic e has been is s u e d t o t h e consumer);
o r (2) between t h e consumer and a t h i r d p a r t y ( f o r p r e a u t h o r i z e d
d e b i t s o r c r e d i t s , f o r exam ple), when t h e i n s t i t u t i o n has r e c e iv e d
n o t i c e o f t h e agreement and t h e fund t r a n s f e r s have begun. (P a s s ­
book and s ta t e m e n t accounts should be judged by t h e s e same c r i t e r i a
in d e te rm in in g whether t h e account i s s u b j e c t t o documentation
re q u ire m e nts under t h e r e g u l a t i o n . )

[§ 2 0 5 . 9 ( a ) ( 6 ) ]

I f t h e r e i s no s p e c i f i c agreement f o r EFT s e r v i c e s , t h e p e r i o d i c
s ta t e m e n t and o t h e r re q uirem en ts o f t h e r e g u l a t i o n do n o t ap ply t o
t h e a c c o u n t. The f a c t t h a t membership in an ACH r e q u i r e s a p a r t i ­
c i p a t i n g f i n a n c i a l i n s t i t u t i o n t o a c c e p t e l e c t r o n i c fund t r a n s f e r s
t o a cco u nts a t t h e i n s t i t u t i o n does not make every account o f t h a t
i n s t i t u t i o n s u b j e c t t o t h e r e g u l a t i o n . [§ 2 0 5 . 9 ( b ) , ( c ) , and ( d ) ]
9-16

Q:

P e rio d i c s ta t e m e n ts - fr e q u e n c y . How o f t e n must p e r i o d i c s ta t e m e n ts
be s e n t f o r a ccou n ts t h a t a r e s u b j e c t t o th e r e g u l a t i o n ?

A:

A monthly s ta t e m e n t i s r e q u ir e d f o r any account t o o r from which an
EFT has o ccu rred d u ring t h e month, i f t h e account i s one t h a t can
be d e b i t e d e l e c t r o n i c a l l y (by use o f an a cc e ss d e v i c e , te le p h o n e
b i l l - p a y m e n t s e r v i c e , or p re a u th o r iz e d t r a n s f e r s from t h e consum er's
a c c o u n t, f o r example) o r i f t h e account can be c r e d i t e d e l e c t r o n i ­
c a l l y by o t h e r than p re a u th o r iz e d d e p o s i t s . I f no t r a n s f e r s occur
du rin g some months, t h e sta te m e n t must be provided a t l e a s t q u a r t e r l y .

- 29 There a r e s p e c i a l e x c e p tio n s f o r accounts on which t h e only EFT
s e r v i c e r e l a t e s t o p r e a u t h o r i z e d c r e d i t s . The i n s t i t u t i o n may send
q u a r t e r l y s ta t e m e n t s o r , i f t h e account i s a passbook a c c o u n t , t h e
i n s t i t u t i o n may simply update t h e passbook when i t i s p r e s e n t e d fo r
u pd ating (with t h e amount and d a t e o f each EFT s i n c e t h e l a s t u p date),
[§ 2 0 5 . 9 ( b ) , ( c ) , and ( d ) ]
9-17

Q; P e r i o d i c s ta t e m e n ts - i n a c t i v e a c c o u n t s . Must q u a r t e r l y s ta t e m e n t s
be s e n t t o a l l acc o u n ts t h a t have had an EFT s e r v i c e a s s o c i a t e d
w ith them, even though t h e acc o u n ts a r e c o n sid e re d i n a c t i v e by t h e
financial in s titu tio n ?
A:

9-18

Q: P e r i o d i c s ta t e m e n ts - customer p i c k - u p .
May a f i n a n c i a l i n s t i ­
t u t i o n p erm it consumers t o c a l t f o r t n e i r p e r i o d i c s t a t e m e n t s ?
A:

9-19

An i n s t i t u t i o n need n o t send s ta t e m e n ts t o acco un ts i t c o n s i d e r s
i n a c t i v e . The d e te r m in a tio n t h a t c e r t a i n a c c o u nts a r e i n a c t i v e
must be made by t h e i n s t i t u t i o n . [§ 205.9(b) and ( d ) ]

Yes, b u t t h e i n s t i t u t i o n may not r e q u i r e i t .

Q: P e r io d i c s ta t e m e n ts - p e r i o d i c c y c l e s .
send o u t a p e r i o d i c s ta te m e n t each time
o ccurs?

[§ 2 0 5.9 (b) and ( d ) ]

May f i n a n c i a l i n s t i t u t i o n s
an e l e c t r o n i c fund t r a n s f e r

A: No. Although s ta t e m e n ts may be s e n t on
a cycle th a t is sh o rte r
th a n month ly , t h e s ta t e m e n ts must correspond t o an a c t u a l p e r i o d i c
c y c l e . [§ 2 0 5 . 9 ( b ) ]
9-20

Q:

P e r io d i c s ta t e m e n ts - v a r i a n c e i n c y c l e . Must a c y c l e f o r a p e r i o d i c
sta t e m e n t be e x a c t l y a month, q u a r t e r , o r o t h e r r e g u l a r p eriod?

A: No. Cycles w ill be c o n sid e re d equal i f
t h e number o f days in t h e
c y c l e does n o t vary by more th an 4 days
from t h e r e g u l a r day o r
date of the periodic statem ent. It is also perm issible to stagger
t h e s ta te m e n t c y c l e f o r d i f f e r e n t accounts f o r o p e r a t i o n a l or
o t h e r r e a s o n s . [§ 205.9(b) and ( d ) ]
9-21

Q:

P e r i o d i c s ta t e m e n ts - summary l i m i t e d t o EFT a c t i v i t y . C e r ta in
consumer passbook a cco u nts can be d e b ite d e l e c t r o n i c a l l y and
th u s do not q u a l i f y f o r t h e e x ce p tion from t h e p e r i o d i c s t a t e ­
ment re q u ire m e n t. The f i n a n c i a l i n s t i t u t i o n c o n tin u e s t o use t h e
passbook as t h e primary means f o r d i s p l a y i n g a l l t r a n s f e r s ( e l e c ­
t r o n i c and n o n e l e c t r o n i c ) on t h e a cc o u n t. May t h e i n s t i t u t i o n
comply with t h e r e g u l a t i o n by p ro v idin g a summary p e r i o d i c s t a t e ­
ment cov ering only t h e e l e c t r o n i c a c t i v i t y ?

A:

Yes. Other r e q u ir e d d i s c l o s u r e s (such as c h a r g e s , account b a l a n c e s ,
and a d d re ss and te le p h o n e number f o r i n q u i r i e s ) m u st, o f c o u r s e ,
a l s o be i n c lu d e d . [§ 2 0 5 .9 (b ) ]

- 30 9-22

Q:

P e r i o d i c s ta t e m e n ts - t r a n s f e r s between consum er's a c c o u n t s . A
consumer t r a n s f e r s funds between two accounts a t t h e same f i n a n c i a l
i n s t i t u t i o n . Must t h e i n s t i t u t i o n r e p e a t in fo r m a tio n d e s c r i b i n g
t h e t r a n s f e r on each s ta te m e n t?

A:

I f t h e i n s t i t u t i o n sends t h e two s ta t e m e n ts t o t h e consumer w ith in
a few days o f each o t h e r ( o r i f a combined s ta te m e n t i s u s e d ) ,
d e s c r i p t i v e in fo r m a tio n need not be d u p l i c a t e d .
In t h i s c a s e ,
d e s c r i p t i v e in fo r m a tio n on one o f t h e s ta t e m e n ts meets t h e r e g u l a ­
t i o n ' s re q u ire m e n ts a s t o both accounts so long as t h e in fo r m a tio n
on t h e second s ta t e m e n t i s s u f f i c i e n t t o allow t h e consumer t o
i d e n t i f y t h e t r a n s f e r . [§ 2 0 5 .9 (b ) ]
NOTE: The Board i s c o n s i d e r i n g a change in t h e p e r i o d i c s ta t e m e n t
re q u ire m e nts with r e s p e c t t o a ccou n ts t h a t a r e s u b j e c t t o te le p h o n e
t r a n s f e r s t o o r from a n o th e r account o f th e consumer a t t h e same
i n s t i t u t i o n . See th e Supplementary Inform ation p o r t i o n o f t h i s
Federal R e g i s t e r n o t i c e .

9-23

This p r o v is io n g iv e s f i n a n c i a l i n s t i t u t i o n s t h a t do not use d e s c r i p ­
t i v e s ta t e m e n ts an a l t e r n a t i v e means f o r meeting t h e documentation
r e q u ir e m e n ts . Some examples: An i n s t i t u t i o n could i n c lu d e c o p ie s
o f te rm in a l r e c e i p t s t o r e f l e c t t r a n s f e r s i n i t i a t e d by t h e consumer
a t e l e c t r o n i c t e r m i n a l s . I t could e n c l o s e p o s tin g memos, d e p o s i t
s l i p s , and o t h e r documents t h a t , t o g e t h e r with t h e s t a t e m e n t , d i s ­
c l o s e a l l t h e r e q u i r e d in f o r m a t i o n . I t could use codes ( f o r names
o f t h i r d p a r t i e s , te rm in a l l o c a t i o n s , e t c . ) and e x p la in t h e i n f o r ­
mation t o which th e y r e l a t e on an accompanying document.
[§ 2 0 5 . 9 ( b ) ( 1 ) , f o o t n o t e 4]

Q:

P e r io d i c s ta t e m e n ts - accompanying documents. May r e q u i r e d inform a­
t i o n o t h e r th an in fo rm a tio n about each e l e c t r o n i c t r a n s f e r appear
on accompanying documents?

A:

9-25

P e r i o d i c s ta t e m e n ts - accompanying documents. A f o o t n o t e in t h e
r e g u l a t i o n p e rm its d e t a i l s about each t r a n s f e r t o be given on
documents accompanying t h e p e r i o d i c s t a t e m e n t ; i t a l s o p e rm its codes
t o be u s e d , so long as th e y a r e e x p la in e d on t h e s ta t e m e n t or accom­
panying documents. How can a f i n a n c i a l i n s t i t u t i o n ta k e advantage
o f t h i s p r o v is io n ?

A:

9-24

Q:

Yes. The r e g u l a t i o n imposes no page re qu irem en ts f o r p e r i o d i c s t a t e ­
ments; t h u s , t h e r e q u i r e d info rm a tio n need not a l l ap p ea r on a s i n g l e
s i n g l e page. (See q u e stio n 9 -3 4 .) [§ 2 0 5 .9 ( b ) ]

Q:

P e r i o d i c s ta t e m e n ts - in fo rm a tio n o b ta in e d from o t h e r s . For p u r ­
poses o f p e r i o d i c s ta te m e n t d i s c l o s u r e s , may a f i n a n c i a l i n s t i t u t i o n
u n c o n d i t i o n a l l y r e l y on d a ta t r a n s m i t t e d t o i t by a n o th e r
financial
i n s t i t u t i o n o r o t h e r p a r t y (such as a merchant)?

- 31 A:

9-26

Q: P e r i o d i c s ta t e m e n ts - te rm in a l l o c a t i o n o m i t t e d ; e r r o r . When a
consumer makes a d e p o s i t a t an ATM, t h e i n s t i t u t i o n need not i d e n t i f y
t h e ATM l o c a t i o n on t h e p e r i o d i c s t a t e m e n t . Does t h e consumer's
r e q u e s t f o r t h e te rm in a l l o c a t i o n (o r any o t h e r in fo r m a tio n about
t h e d e p o s i t ) c o n s t i t u t e n o t i f i c a t i o n of an e r r o r under t h e r e g u l a t i o n ?
A:

9-27

[§ 2 0 5 . 9 ( b ) ( l ) ( i i i ) ]
How

For any fe d e r a l r e c u r r i n g payment (such a s Social S e c u r i t y , m i l i ­
ta r y or c i v i l se rv ic e p e n sio n s/p ay ro lls)
t h e t h i r d - p a r t y name may
be d i s c l o s e d as "U.S. g o v ' t , " "fed s a l , "
o r any o t h e r d e s i g n a t i o n
i n d i c a t i n g t h a t t h e payor i s th e United S t a t e s government.
[§ 2 0 5 . 9 ( b ) ( 1 ) (v) and ( e ) ]

Q: P e rio d i c s ta t e m e n ts - m u l t i p l e t r a n s f e r e e s . A f i n a n c i a l i n s t i t u t i o n
p e rm its consumers t o make m u l t i p l e payments a t an A by keying in
TM
a composite d o l l a r amount and i n s e r t i n g payment s tu b s i n t o th e
ATM t o i n d i c a t e who t h e in d i v i d u a l payees a r e . I f a consumer keys
in an amount and d i r e c t s th e i n s t i t u t i o n t o pay t h r e e u t i l i t y b i l l s
from t h a t sum, must t h e t h r e e companies be named on t h e p e r i o d i c
s ta te m e n t?
A

9-30

There i s no p r e s c r i b e d te rm in o lo g y .

Q: P e r i o d i c s ta t e m e n ts - t r a n s f e r o r / f e d e r a l
r e c u r r i n g payments.
should t h e name o f t h e t h i r d p a r t y be d i s c l o s e d on t h e p e r i o d i c
s ta te m e n t f o r f e d e r a l r e c u r r i n g payments?
A:

9-29

Yes, i f t h e r e q u e s t f o r t h e l o c a t i o n i s made in accordance with th e
re q u ire m e n ts o f t h e e r r o r r e s o l u t i o n s e c t i o n . On t h e o t h e r hand,
i f t h e consumer merely c a l l s t o a s c e r t a i n whether o r not a d e p o s i t
(ATM, p r e a u t h o r i z e d , or any o t h e r ty p e o f e l e c t r o n i c t r a n s f e r )
was c r e d i t e d t o th e a c c o u n t, t h e e r r o r r e s o l u t i o n pro cedures do not
a p p ly . [§§ 2 0 5 . 9 ( b ) ( l ) ( i v ) , f o o t n o t e 4 a , and 2 0 5 . 1 1 ( a ) ( 7 ) ]

Q: P e r io d i c s ta t e m e n ts - ty p e o f POS t r a n s f e r . How should t h e p e r i o d i c
sta t e m e n t i d e n t i f y a t r a n s f e r t h a t t a k e s p la c e a t a m e r c h a n t 's POS
te rm in a l — as a purc hase o r s a l e o f goods o r s e r v i c e s , o r as a
payment t o a t h i r d p a r ty ?
A:

9-28

Independent v e r i f i c a t i o n o f t h e d a t a f o r each t r a n s f e r i s not
r e q u i r e d . F in a n c ia l i n s t i t u t i o n s must, however, g e n e r a l l y m a in ta in
r e a s o n a b le proc e du re s t o avoid v i o l a t i o n s o f t h e r e g u l a t i o n , whether
as a r e s u l t o f f a u l t y d a ta tr a n s m i s s i o n o r e r r o r s o f t h i r f l p a r t i e s .
(See t h e e x ce p tio n t o l i a b i l i t y under § 915 o f t h e a c t f o r bona
f i d e u n i n t e n t i o n a l e r r o r s . ) [§ 2 0 5 . 9 ( b ) ( 1 ) ]

Yes. The names o f a l l t h r e e u t i l i t i e s must be provided on th e
p e r i o d i c sta te m e n t so t h a t th e documentation can s erv e as proof
o f payment f o r th e consumer. [§ 2 0 5 . 9 ( b ) ( 1 ) ( v ) ]
P e r i o d i c s ta t e m e n ts - consumer as t h i r d - p a r t y payee. I f a consumer
makes an e l e c t r o n i c fund t r a n s f e r t o a n o th e r consumer, may th e
f i n a n c i a l i n s t i t u t i o n i d e n t i f y t h e r e c i p i e n t on t h e p e r i o d i c s t a t e ­
ment by g iv in g th e p e r s o n 's account number?

- 32 A:
9-31

Q: P e rio d i c s ta t e m e n ts - c h a r g e s .
t h e p e r i o d i c s ta te m e n t?
A:

9-32

F in a n c ia l i n s t i t u t i o n s should d i s c l o s e e i t h e r (1) t h e t o t a l c h arg es
a s s e s s e d a g a i n s t t h e account d u rin g t h e s ta te m e n t p e rio d f o r e l e c ­
t r o n i c fund t r a n s f e r s o r t h e r i g h t t o make t r a n s f e r s , or (2) th e
t o t a l c h arg es a s s e s s e d d u rin g t h e p e rio d f o r account maintenance.
[§ 2 0 5 . 9 ( b ) ( 3 ) ]

No. The b a la n c e s must t a k e i n t o account both e l e c t r o n i c
e l e c t r o n i c a c t i v i t y . [§ 2 0 5 . 9 ( b ) ( 4 ) ]

and non­

Yes. [§

2 0 5 . 9 ( b ) (5) and (6 )]

Q: P e rio d i c s ta t e m e n ts - te le p h o n e numbers.
May t h e i n s t i t u t i o n
d i s c l o s e t h e te le p h o n e number f o r i n q u i r i n g about p r e a u t h o r i z e d
t r a n s f e r s t o th e consumer's account on a c r e d i t a dv ic e o r o t h e r
document e n closed w ith th e p e r i o d i c statem e n t?
A:

9-35

What c h arg es must be d i s c l o s e d on

Q: P e r io d i c s ta t e m e n ts - te le p h o n e numbers.
A financial i n s titu ti o n
i s r e q u i r e d t o d i s c l o s e a te le p h o n e number f o r e r r o r r e s o l u t i o n and
( i f i t i s using th e te le p h o n e a l t e r n a t i v e f o r p r e a u t h o r i z e d c r e d i t s )
a number f o r t h e consumer t o c a l l t o a s c e r t a i n whether a p r e a u t h o ­
r i z e d c r e d i t has o c c u r r e d . Would d i s c l o s u r e o f a s i n g l e te le p h o n e
number f o r both p u r p o s e s , preceded by t h e " d i r e c t I n q u i r i e s to "
la n g u a g e , s a t i s f y both re q u irem ents?
A:

9-34

by name.

Q: P e r io d i c s ta t e m e n ts - opening and c l o s i n g b a l a n c e s . The f i n a n c i a l
i n s t i t u t i o n i s r e q u i r e d t o d i s c l o s e an opening and a c l o s i n g b alan ce
in t h e consum er's a c c o u n t. May t h e s e b a la n c e s be based s o l e l y on th e
electronic activ ity ?
A:

9-33

No. The i n s t i t u t i o n must d i s c l o s e t h e r e c i p i e n t
[§ 2 0 5 . 9 ( b ) ( l ) ( v ) ]

Yes. (See q u e s tio n 9 -2 4 .)

[§ 2 0 5 . 9 ( b ) ( 6 ) ]

Q: R e c e i p t s / p e r i o d i c s ta t e m e n ts - i n c o r r e c t d e p o s i t amount. What does
t h e r e g u l a t i o n r e q u i r e i f t h e amount o f a d e p o s i t , as v e r i f i e d by
t h e i n s t i t u t i o n , t u r n s out t o be d i f f e r e n t from t h e amount e n te r e d
by t h e consumer i n t o th e te r m in a l?
A:

An i n s t i t u t i o n need not n o t i f y t h e consumer about t h e d is c r e p a n c y
per s e . The next p e r i o d i c sta te m e n t should r e f l e c t t h e proper
amount o f t h e d e p o s i t o r , depending on t h e i n s t i t u t i o n ' s bookkeeping
syste m, a c o r r e c t i o n o f t h e erroneous amount. The i n s t i t u t i o n
must o f c o u rs e comply with t h e e r r o r r e s o l u t i o n pro cedures i f th e
consumer a l l e g e s an e r r o r 1n th e d e p o s i t . [§ 2 0 5 . 9 ( a ) ( 1 ) and
(b)(l)(1)]

- 33 9-36

R e c e i p t s / p e r i o d i c s ta te m e n ts - ty p e o f a c c o u n t; g e n e r ic d e s c r i p ­
t i o n s . The r e g u l a t i o n permits a withdrawal from a c o n su m er's share
d r a f t account a t a c r e d i t union t o be i d e n t i f i e d as a "withdrawal
from c h e c k in g . " What i s t h i s p r o v is io n in ten d ed t o accomplish?
The r e g u l a t i o n p e rm its g e n e r ic d e s c r i p t i o n s o f t h e ty p e o f account
t o f a c i l i t a t e o p e r a t i o n s 1n a shared EFT network.
For example, in
a sh ared system , a c r e d i t union member may be a b le t o i n i t i a t e
t r a n s f e r s t o o r from a share d r a f t account a t a te rm in a l owned
o r o p e r a te d by a bank, which may d e s c r i b e accounts only as "checking"
o r "sa v in g s " a cco u n ts (and be unable t o g e n e r a te a r e c e i p t d e s c r i b i n g
t h e t r a n s f e r s as t o o r from a " s h a re d r a f t " a c c o u n t ) . [§ 2 0 5 . 9 ( a ) ( 3 )
and ( b ) ( 1 ) ( i i i ) ]

Q:

R e c e i p t s / p e r i o d i c s ta te m e n ts - l o c a t i o n c o de . May a t r a n s a c t i o n
code be used t o comply with t h e te rm in a l lo c a tio n
re qu ire m e n t?
Yes, i f t h e t r a n s a c t i o n code (o r t h e p o r ti o n t h a t
r e l a t e s t o th e
te rm in a l l o c a t i o n ) i s c l e a r l y s e t f o r t h on t h e r e c e i p t .
I t must,
o f c o u r s e , be reproduced on t h e p e r i o d i c s t a t e m e n t . [§ 2 0 5 .9 ( a ) ( 5 )
and ( b ) ( I ) ( i v ) ]

Q:

R e c e i p t s / p e r i o d i c s ta te m e n ts - shared system; unique c o d e s . In a
shared o r i n te r c h a n g e environment, must t h e v a rio u s c o d e s u s e d on
te rm in a l r e c e i p t s and p e r i o d i c s ta te m e n ts be unique?

A:

9-40

Q:

A:

9-39

Common d e s c r i p t i o n s a r e s u f f i c i e n t . There i s no p r e s c r i b e d t e r m i ­
n o lo g y , a lth ou g h some examples a r e c o n ta in e d in t h e r e g u l a t i o n .
On p e r i o d i c s t a t e m e n t s , f o r example, i t i s enough simply t o show
t h e amount o f t h e t r a n s f e r in t h e d e b i t o r t h e c r e d i t column i f
o t h e r in fo r m a tio n on t h e s ta te m e n t ( f o r example, a te rm in a l l o c a ­
t i o n o r t h i r d - p a r t y name) e n a b le s t h e consumer t o i d e n t i f y t h e ty pe
o f t r a n s f e r . [§ 2 0 5 .9 ( a ) ( 3 ) and ( b ) ( l ) ( i i i ) ]

A:

9-38

R e c e i p t s / p e r i o d i c s ta t e m e n ts - t y p e o f t r a n s f e r . What d e g re e o f
s p e c i f i c i t y i s r e q u i r e d on te rm in a l r e c e i p t s and p e r i o d i c s ta t e m e n ts
f o r t h e ty p e o f t r a n s f e r ?

A:

9-37

Q:

In shared o r i n te r c h a n g e sy stem s, i d e n t i c a l numbers may well appear
on t h e consumer's p e r i o d i c s ta te m e n t f o r t e r m i n a l s o p e ra te d by
d i f f e r e n t i n s t i t u t i o n s or m e rc h ants; t h i s i s p e r m i s s i b l e .
[§ 2 0 5 .9 (a ) and ( b ) ]

Q:

R e c e i p t s / p e r i o d i c s ta t e m e n ts - omission o f c i t y name. In d i s c l o s i n g
t h e te rm in a l l o c a t i o n on a te rm in a l r e c e i p t and on t h e p e r i o d i c
s t a t e m e n t , a f i n a n c i a l i n s t i t u t i o n uses a g e n e r a l l y a cc e pte d name
(such as a branch name) fo r a s p e c i f i c l o c a t i o n . May t h e c i t y be
o m itted when th e branch name and t h e c i t y a r e th e same?

A:

Yes.

[§ 2 0 5 . 9 ( a ) ( 5 ) and ( b ) ( 1 ) ( i v ) ]

- 34 9-41

R e c e i p t s / p e r i o d i c s ta t e m e n ts - te rm in a l l o c a t i o n / t h i r d p a r t y . May
a s i n g l e l i s t i n g be used t o i d e n t i f y both t h e te rm in a l l o c a t i o n and
t h e name o f t h e t h i r d p a r t y t o o r from whom funds a r e t r a n s f e r r e d ?
A

9-42

Yes. For example, i f a consumer purc hases goods from a m e rc han t,
t h e name o f t h e p a r t y t o whom funds a r e t r a n s f e r r e d ( th e merchant)
and t h e l o c a t i o n of t h e term in al where t h e t r a n s f e r i s i n i t i a t e d
w ill be s a t i s f i e d by a d i s c l o s u r e such as "XYZ S t o r e , Anytown,
Ohio."
[§ 2 0 5 . 9 ( a ) ( 5 ) and ( 6 ) , and ( b ) ( l ) ( i v ) and ( v ) ]
R e c e i p t s / p e r i o d i c s ta t e m e n ts - i n t e r m e d i a t e p a r t y . I f a p a r t y (a
merchant o r a n o th e r f i n a n c i a l i n s t i t u t i o n , f o r example) p ro c e s s e s
an e l e c t r o n i c fund t r a n s f e r but i s not t h e u l t i m a t e t r a n s f e r e e or
t r a n s f e r o r , must i t be i d e n t i f i e d on te rm in a l r e c e i p t s o r p e r i o d i c
s ta t e m e n ts ?

A:
Q:

R e c e i p t s / p e r i o d i c s ta t e m e n ts - a cc o u n t-h o ld in g i n s t i t u t i o n as t h i r d
p a r t y . The r e g u l a t i o n r e q u i r e s i d e n t i f i c a t i o n of t h e t h i r d p a r t y
t o or from whom a t r a n s f e r i s made, on th e te rm in a l r e c e i p t and
p e r i o d i c s t a t e m e n t . Is an a cc o u n t-h o ld in g f i n a n c i a l i n s t i t u t i o n
c o n sid e re d a t h i r d p a r t y f o r purposes o f t h i s req u irem ent?

A:

9-43

No.
Such p a r t i e s need not be named e i t h e r on t h e r e c e i p t o r on t h e
p e r i o d i c s t a t e m e n t . [§ 2 0 5 . 9 ( a ) ( 6 ) and ( b ) ( l ) ( v ) ]

Yes.
A t h i r d p a r t y i s g e n e r a l l y someone o t h e r th a n t h e consumer and
t h e f i n a n c i a l i n s t i t u t i o n . However, § 906(f) o f t h e a c t r e q u i r e s
t h a t any documentation provided t o t h e consumer s h a l l c o n s t i t u t e
prima f a c i e pro o f o f a t r a n s f e r t o a n o th e r p e r s o n , and a p p l i e s t o
documentation o f payments made t o t h e a c c o u n t-h o l d in g i n s t i t u t i o n .
The i n s t i t u t i o n need not be named on t h e r e c e i p t and p e r i o d i c s t a t e ­
ment as t h e payee 1f t h e f a c t t h a t payment was made t o t h e i n s t i t u ­
t i o n i s s u f f i c i e n t l y i n d i c a t e d by o t h e r in fo rm a tio n ( f o r example,
"loan payment from c h e c k in g ," i f t h i s can be ta ken t o mean t h a t
th e payment was t o t h e a cc o u n t-h o ld in g i n s t i t u t i o n ) . [§ 2 0 5 .9 ( a ) ( 6 )
and ( b ) ( l ) ( v ) ]

9-44

Q: R e c e i p t s / p e r i o d i c s ta t e m e n ts - c o n s is te n c y in t h i r d - p a r t y i d e n t i t y .
May a f i n a n c i a l i n s t i t u t i o n d i s c l o s e , on t h e p e r i o d i c s t a t e m e n t , a
t h i r d - p a r t y name o t h e r th an t h e one t h a t appeared on t h e r e c e i p t ?
A:

9-45

No. I f t h e d . b . a . (doing b u s in e s s a s) name o f t h e t h i r d p a r ty
appeared on a term inal r e c e i p t , t h a t name must a l s o appear on t h e
p e r i o d i c s t a t e m e n t . S i m i l a r l y , i f a p a re n t c o r p o r a t i o n ' s name
appeared on t h e term in al r e c e i p t , i t must a ls o be used on th e
p e r i o d i c s t a t e m e n t . [§ 2 0 5 . 9 ( a ) ( 6 ) and ( b ) ( 1 ) ( v )]

Q: Passbook updates - when r e q u i r e d . Is a f i n a n c i a l i n s t i t u t i o n
r e q u i r e d t o update a passbook every time t h e consumer p r e s e n t s i t
( f o r example, when t h e consumer uses t h e passbook t o make a d e p o s i t
o r w ith d ra w a l)?

- 35 A:

9-46

No. The i n s t i t u t i o n need only update t h e passbook (by e n t e r i n g th e
amount and d a t e o f p r e a u t h o r i z e d c r e d i t s s i n c e t h e preceding update )
when t h e
consumer p r e s e n t s i t f o r u p d a tin g . [§ 2 0 5 . 9 ( c ) ]

Q: Passbook
a ccou n ts - te le p h o n e n o t i c e a l t e r n a t i v e . May an i n s t i t u ­
t i o n u t i l i z e t h e te le p h o n e n o t i c e a l t e r n a t i v e f o r passbook a ccou n ts
t h a t do not r e c e i v e p e r i o d i c s ta te m e n ts ?
A: Yes. (See q u e s tio n 1 0 -1 2 .)

9-47

[§§ 2 0 5 . 9 ( c ) , 2 0 5 . 1 0 ( a ) ( l ) ( i i i ) ]

Q: Passbook update s - d i s c a r d i n g o f d a t a . May a f i n a n c i a l i n s t i t u t i o n
s e t a c u t - o f f p e rio d f o r r e t e n t i o n o f in fo rm a tio n a w a it in g e n t r y
in t h e consumer's passbook?
A: No. However, t h e f i n a n c i a l i n s t i t u t i o n need not update a passbook
immediately upon p r e s e n t a t i o n i f t h e in fo rm a tio n i s n o t r e a d i l y
a v a i l a b l e . I t may r e t a i n th e passbook, add th e i n f o r m a t i o n , and
r e t u r n t h e updated passbook promptly t o t h e consumer. Or, i t can
mail s e p a r a t e documentation t o t h e consumer. [§ 2 0 5 . 9 ( c ) ]

9-48

Q: Passbook update s - p e r i o d i c t r a n s m i t t a l s . May a f i n a n c i a l i n s t i t u ­
t i o n , in l i e u o f r e t a i n i n g t h e in fo rm a tio n between p r e s e n t a t i o n s o f
t h e passbook, send a consumer up d ates o f p r e a u t h o r i z e d c r e d i t s on a
periodic basis?
A:

9-49

Yes.

[§ 2 0 5 . 9 ( c ) ]

Q: Q u a rte rly s ta t e m e n ts - compliance with r e g u l a r r e q u i r e m e n t s . The
r e g u l a t i o n r e q u i r e s q u a r t e r l y p e r i o d i c s ta t e m e n ts f o r non-passbook
accounts t h a t cannot be acc e ss e d e l e c t r o n i c a l l y e x ce pt by
p r e a u t h o r i z e d c r e d i t s . Must t h e s e s ta t e m e n ts meet t h e p e r i o d i c
s ta te m e n t req uire m e nts o f t h e r e g u l a t i o n ?
A:

Yes. The s ta t e m e n ts must comply with a l l req uire m e n ts f o r p e r i o d i c
s t a t e m e n t s . The only d i f f e r e n c e i s t h a t the y may be s e n t q u a r t e r l y .
[§ 2 0 5 . 9 ( d ) ]

Section 205.10 — P r e a u th o ri z e d T r a n s f e r s
10-1

Q:

Notice o f c r e d i t - c h o ic e o f t y p e . Must consumers be given a
c ho ic e o f th e typ e o f n o t i c e t o be provided r e g a rd in g r e c e i p t o f
preauthorized c re d its ?

A:

No. I t i s up t o th e f i n a n c i a l i n s t i t u t i o n t o decide which method
o f n o t i c e t h e i n s t i t u t i o n wants t o u se. The i n s t i t u t i o n may use
d i f f e r e n t methods f o r d i f f e r e n t ty p e s or s e r i e s o f p r e a u t h o r i z e d
t r a n s f e r s . [§ 2 0 5 . 1 0 ( a ) ( 1 ) ]

- 36 10-2

Notice o f c r e d i t - when r e c e i p t g u a r a n t e e d . A f i n a n c i a l i n s t i t u ­
t i o n g u a ra n te e s I t s custom ers t h a t scheduled Social S e c u r i t y
t r a n s f e r s w ill be c r e d i t e d t o t h e i r acco u nts whether o r not th e
i n s t i t u t i o n a c t u a l l y r e c e i v e s t h e funds on t i m e . Does t h e n o t i c e
re qu ire m e n t apply?

A:

10-3

Q:

Yes — u n le s s t h e i n s t i t u t i o n has adopted t h e n e g a t i v e n o t i c e o p t i o n ,
in which c a s e sending t h e n o t i c e might confuse t h e consumer.
[§ 2 0 5 . 1 0 ( a ) ( 1 ) ]

Q: Notice provided by p a y o r. Are t h e r e i n s t a n c e s in which t h e f i n a n ­
c i a l i n s t i t u t i o n does n o t have t o pro v ide n o t i c e ?
A:

10-4

Q: Notice p rovided by payor - form. I f t h e payor-employer p ro v id e s
n o t i c e t o a consumer t h a t a t r a n s f e r has been i n i t i a t e d , what ty p e
o f n o t i c e must i t give?
A:

10-5

Id e n tific a tio n of the deposit is s u f f i c i e n t .

[§ 2 0 5 . 1 0 ( a ) ( 1 ) ]

Such a n o t i c e w ill not s a t i s f y t h e n o t i c e re q u ire m e n t.
[§ 2 0 5 . 1 0 ( a ) ( 1 ) ]

Q: P e rio d i c sta te m e n t as n o t i c e .
I f a p e r i o d i c s ta t e m e n t s e n t w ith in
two b u s in e s s days r e f l e c t s t h e t r a n s f e r , can i t s e r v e as p o s i t i v e
notice of receip t?
A:

10-8

No.

Q: C urrent account b a l a n c e . May an i n s t i t u t i o n g iv e n o t i c e by informing
t h e consumer o f t h e c u r r e n t b alan ce in t h e account?
A:

10-7

There i s no r e q u i r e d form o r te rm in o lo g y . A pay s tu b t h a t shows
t h e n e t d e p o s i t i s s u f f i c i e n t . [§ 2 0 5 .1 0 ( a ) ( 1 ) ]

Q: Content o f n o t i c e .
Is t h e r e suggested language f o r t h e n o t i c e
re g a rd in g r e c e i p t o f a p r e a u t h o r i z e d t r a n s f e r ?
A:

10-6

Yes. I f t h e payor p ro v id e s n o t i c e t o th e consumer t h a t a t r a n s f e r
has been i n i t i a t e d , t h e f i n a n c i a l i n s t i t u t i o n i s not r e q u i r e d t o
p ro v ide n o t i c e o f r e c e i p t . [§ 2 0 5 . 1 0 ( a ) ( 1 ) ]

Yes. S i m i l a r l y , t h e absence o f t h e d e p o s i t e n t r y (on a p e r i o d i c
s ta te m e n t s e n t w ith in 2 b u s in e s s days o f t h e schedule d t r a n s f e r
d a t e ) w ill s erv e as n e g a t iv e n o t i c e . [§ 2 0 5 . 1 0 ( a ) ( 1 ) ]

Q: Negative n o t i c e - t i m i n g . I f an i n s t i t u t i o n uses a n e g a t i v e n o t i c e
system and a p r e a u th o r iz e d c r e d i t f a i l s t o a r r i v e on th e scheduled
d a t e , b ut does a r r i v e w ith in two b u s in e s s d a ys, must a n o t i c e be
s e n t?
A:

No. I f th e d e p o s i t d id not a r r i v e by t h e c l o s e o f t h e second
b u s in e s s da y, however, a n o t i c e would have t o be s e n t a t t h a t tim e .
[§ 2 0 5 . 1 0 ( a ) ( 1 ) ( H ) ]

- 37 10-9

No. In t h e absence o f in fo rm a tio n from t h e consumer o r th e payor
t h a t t h e t r a n s f e r s have been t e r m i n a t e d , t h e i n s t i t u t i o n should
send t h e n o t i c e s a t l e a s t 3 t i m e s . Or, i t may n o t i f y t h e consumer
t h a t t h e i n s t i t u t i o n b e l i e v e s t h e t r a n s f e r s have s to p p e d , and t h a t
t h e r e f o r e no f u r t h e r n e g a t i v e n o t i c e s w ill be s e n t .
[§ 2 0 5 . 1 0 ( a ) ( 1 ) ( H ) ]

Q:

Telephone n o t i c e - t i m i n g . How q u ic k ly must a f i n a n c i a l i n s t i t u ­
t i o n respond t o a consum er's te le p h o n e i n q u i r y about whether a
p r e a u t h o r i z e d t r a n s f e r has been r e c e iv e d ?

A:

In most i n s t a n c e s , an i n s t i t u t i o n should be a b le t o p ro v ide v e r i f i ­
c a t i o n d u rin g t h e same te le p h o n e c a l l . However, i f t h e in fo rm a tio n
i s not immediately a v a i l a b l e — because o f a time l a p s e between th e
schedule d t r a n s f e r d a te and t h e consumer's c a l l , f o r example — t h e
i n s t i t u t i o n should respond w ith in 2 b u s in e s s days.
[§ 2 0 5 . 1 0 ( a ) ( 1 ) ( i l l ) ]

Q:

Telephone n o t i c e - a v a i l a b i l i t y . The r e g u l a t i o n r e q u i r e s t h a t t h e
te le p h o n e l i n e f o r i n q u i r i e s about p r e a u th o r iz e d c r e d i t s be r e a d i l y
a v a i l a b l e . What does t h i s mean? Also, must t h e i n s t i t u t i o n p ro ­
v ide a t o l l - f r e e number, o r a c c e p t c o l l e c t c a l l s ?

A:

10-11

Negative n o t i c e - c e s s a t i o n o f t r a n s f e r s . An i n s t i t u t i o n uses a
n e g a t iv e n o t i c e system. I f p r e a u t h o r i z e d t r a n s f e r s t o a consumer's
account c e a s e t o o c c u r , must t h e i n s t i t u t i o n send n o t i c e s of
nonreceipt in d e fin ite ly ?

A:

10-10

Q:

To s a t i s f y t h e r e a d i l y a v a i l a b l e s t a n d a r d , t h e f i n a n c i a l i n s t i t u ­
t i o n should pro vid e enough l i n e s so t h a t consumers g e t a re a so n a b ly
prompt answer, using any answering system i t wants.
As t o t o l l - f r e e c a l l s , an i n s t i t u t i o n should provid e — w ith in i t s
primary s e r v i c e a re a — a te le p h o n e number t o which c a l l s can be
made w ith o u t charge t o t h e custom er. In some c a s e s , a f i n a n c i a l
i n s t i t u t i o n w ill have customers who r e s i d e away from th e c i t y or
s t a t e where th e f i n a n c i a l i n s t i t u t i o n normally conducts b u s i n e s s ;
t h e f i n a n c i a l i n s t i t u t i o n need not provide a t o l l - f r e e number or
a c c e p t c o l l e c t l o n g - d i s t a n c e c a l l s from t h e s e cu stom ers.
The f i n a n c i a l i n s t i t u t i o n need not provide 24-hour te le p h o n e l i n e s
t o respond t o consumers' i n q u i r i e s . Telephone s e r v i c e du rin g normal
b u s in e s s hours w ill s u f f i c e . [§ 2 0 5 . 1 0 ( a ) ( 1 ) ( i i i ) ]

10-12

Q:

Telephone n o t i c e - passbook a c c o u n t s . An i n s t i t u t i o n t h a t uses
t h e te le p h o n e a l t e r n a t i v e f o r p re a u th o r iz e d c r e d i t s i s r e q u i r e d
t o giv e th e te le p h o n e number in t h e i n i t i a l d i s c l o s u r e s and on
each p e r i o d i c s t a t e m e n t . Customers whose passbook accounts can
only be accessed by p r e a u th o r iz e d c r e d i t s do not r e c e i v e p e r i o d i c
s t a t e m e n t s . How might th e f i n a n c i a l i n s t i t u t i o n comply with th e
second c o n d itio n ?

A:

The i n s t i t u t i o n may ta k e any re a so n a b le measure t o provid e th e
number t o consumers. I t may stamp th e te le p h o n e number in th e
passbook, f o r example, o r in c lu d e th e te le p ho n e number with th e
annual e r r o r r e s o l u t i o n n o t i c e . [§ 20 5 .I 0 ( a ) ( l ) ( 1 i i )]

- 38 10-13

Yes. An i n s t i t u t i o n need not a l t e r i t s e s t a b l i s h e d p o s tin g sch e du le .
However, t h e funds must be c r e d i t e d t o t h e consumers' acc o u n ts as
o f t h e d a t e t h e funds a r e r e c e i v e d . [§ 2 0 5 . 1 0 ( a ) ( 2 ) ]

Q:

P r e a u th o ri z e d c r e d i t s - funds re c e iv e d p r i o r t o agre ed c r e d i t i n g
d a t e . Is a f i n a n c i a l i n s t i t u t i o n e ver p e rm itt e d t o c r e d i t a con­
s u m e r 's account l a t e r tha n t h e d a te t h e funds a r e r e c e iv e d from
t h e payor?
Yes. I f t h e f i n a n c i a l i n s t i t u t i o n and t h e payor have agre ed t h a t
t h e payor w i l l t r a n s m i t funds t o t h e i n s t i t u t i o n in advance o f th e
d a t e on which t h e i n s t i t u t i o n i s t o c r e d i t consumers' acco u nts
( f o r example, two days in advance o f pay d a y ) , t h e i n s t i t u t i o n may
c r e d i t t h e a c c o u nts as o f t h e d a t e agreed upon with t h e payor ( t h a t
i s , pay d a y ) . [§ 2 0 5 . 1 0 ( a ) ( 2 ) ]

Q:

P r e a u th o riz e d d e b i t s - p r e - e x i s t i n g a u t h o r i z a t i o n s . I f an agreement
f o r p r e a u t h o r i z e d e l e c t r o n i c fund t r a n s f e r s from an account was
e n t e r e d i n t o b e f o r e May 10, 1980, must a new a u t h o r i z a t i o n be
o b ta in e d by t h e d e s ig n a te d payee o r by t h e f i n a n c i a l i n s t i t u t i o n ?
No.

Q:

P r e a u th o ri z e d d e b i t s - p r e - e x i s t i n g a u t h o r i z a t i o n s . I f a consumer's
e x i s t i n g a u t h o r i z a t i o n , which a u t h o r i z e s t h e i n s t i t u t i o n o r th e
d e s ig n a te d payee t o d e b i t t h e consumer's a c c o u n t, does not s p e c i f y
t h a t t h e d e b i t i n g i s t o occur e l e c t r o n i c a l l y (o r s p e c i f i e s t h a t
d e b i t i n g i s t o occur by paper means), must a new a u t h o r i z a t i o n be
o b ta in e d in o r d e r t o d e b i t t h e account e l e c t r o n i c a l l y ?

A:
10-18

P r e a u th o r i z e d c r e d i t s - p o s tin g s c h e d u le . I f a f i n a n c i a l i n s t i t u ­
t i o n normally p o s t s c r e d i t s t o cu sto m ers' a cco un ts in t h e morning,
and i t r e c e i v e s an ACH ta p e in t h e a f t e r n o o n , may t h e i n s t i t u t i o n
d e la y t h e p o s tin g u n t i l t h e next morning?

A:
10-17

Q:

A:

10-16

The r e g u l a t i o n r e q u i r e s t h a t p r e a u th o r iz e d t r a n s f e r s be c r e d i t e d
as o f t h e day t h e funds f o r t h e t r a n s f e r a r e r e c e i v e d . The d e t e r ­
m in a tio n o f when t h e s e funds a r e a v a i l a b l e t o t h e consumer f o r
withdrawal w ill depend on a p p l i c a b l e s t a t e law, i f a ny, and on
o t h e r f e d e r a l r e g u l a t i o n s , i f any. [§ 2 0 5 . 1 0 ( a ) ( 2 ) ]

A:

10-15

P r e a u t h o r i z e d c r e d i t s - a v a i l a b i l i t y o f fu n d s . When must funds
d e p o s it e d t o an account v ia p r e a u th o r iz e d t r a n s f e r s be a v a i l a b l e
t o t h e consumer?

A:

10-14

Q:

The r e g u l a t i o n does n o t r e q u i r e t h a t new a u t h o r i z a t i o n s be o b t a i n e d .
[§ 2 0 5 .1 0 (b ) ]

Q:

P r e a u th o riz e d d e b i t s - a u t h o r i z a t i o n o b ta in e d by t h i r d p a r t y . I f
a consumer a u t h o r i z e s a t h i r d p a r t y ( f o r example, an in su ra n ce
company) t o i n i t i a t e p r e a u th o r iz e d e l e c t r o n i c fund t r a n s f e r s from
t h e consumer's a c c o u n t, and t h e t h i r d p a r t y f a i l s t o o b ta in t h e
a u t h o r i z a t i o n in w r i t i n g o r t o give a copy t o t h e consumer, i s
t h e a c c o u n t-h o ld in g f i n a n c i a l i n s t i t u t i o n in v i o l a t i o n o f th e
regulation?

[§ 2 0 5 .1 0 (b ) ]

- 39 A:

Yes. The i n s t i t u t i o n may accomplish t h i s , f o r example, by s u s ­
pending a l l subsequent payments t o t h e d e s ig n a te d payee u n t i l
t h e consumer n o t i f i e s th e i n s t i t u t i o n t h a t payments should resume.
[§ 2 0 5 . 1 0 ( c ) ]

Q:

Ten-day n o t i c e o f v aryin g d e b i t s - p r e - e x i s t i n g a u t h o r i z a t i o n s .
I f t h e consumer agreed t o v aryin g p r e a u t h o r i z e d t r a n s f e r s from
t h e consum er's account p r i o r t o May 10, 1980, must t h e f i n a n c i a l
i n s t i t u t i o n (o r t h e d e s ig n a te d payee) g iv e t h e consumer t h e 10-day
advance n o t i c e o f t r a n s f e r s t h a t vary in amount?
Yes, u n le s s t h e consumer has been informed o f t h e r i g h t t o r e c e i v e
n o t i c e o f such vary in g payments and th e consumer has a u t h o r i z e d
payment w ith in a s p e c i f i e d range
o f amounts. [§ 2 0 5 .1 0 (d ) ]

Q:

Ten-day n o t i c e - p a y e e 's f a i l u r e t o p r o v i d e . Does t h e f i n a n c i a l
i n s t i t u t i o n h old in g t h e consumer's account nave any l i a b i l i t y f o r
t h e d e s ig n a te d p a y e e 's f a i l u r e t o p ro v id e n o t i c e o f v aryin g amounts?

A:

10-21

P r e a u th o riz e d d e b i t s - stop-payment o r d e r . On October 10, a consumer
o r a l l y o r d e r s t h e f i n a n c i a l i n s t i t u t i o n t o s to p payment on a $30
u t i l i t y b i l l t h a t i s scheduled t o be paid on October 15. The pay­
ment i s s to p p ed . The consumer p r o p e r ly confirm s t h e o r d e r in
w r i t i n g on October 17. On October 30 t h e u t i l i t y company re s u b m its
t h e $30 d e b i t . Must t h e f i n a n c i a l i n s t i t u t i o n s t o p payment on t h e
r e s u b m itte d item?

A:

10-20

Q:

A:

10-19

No. The p a r t y t h a t o b t a i n s t h e a u t h o r i z a t i o n — in t h i s i n s t a n c e ,
th e t h i r d p a r t y — i s t h e person t h a t i s s u b j e c t t o t h e s e r e q u i r e ­
ments . [§ 2 0 5 .1 0 (b ) ]

No.

[§ 2 0 5 .1 0 (d ) ]

Sectio n 205.11 — Procedures f o r Resolving E rro rs
11-1

T r a n s f e r s - i n i t i a t e d by i n s t i t u t i o n . I f a t r a n s f e r i s i n i t i a t e d
by a f i n a n c i a l I n s t i t u t i o n o r i t s employee w ith o u t t h e consumer's
a u t h o r i z a t i o n , does i t c o n s t i t u t e an e r r o r ?

A:

11-2

Q:

Yes. I t c o n s t i t u t e s an i n c o r r e c t e l e c t r o n i c fund t r a n s f e r u n le s s
t h e t r a n s f e r was a u t h o r i z e d , f o r example, by a c o u r t o r d e r .
[§ 205.11(a)]

Q:

Loss o r t h e f t o f a cc e ss d e v i c e . I f a consumer r e p o r t s t h e l o s s o r
t h e f t o f an a c c e s s d e v i c e , i s t h e i n s t i t u t i o n r e q u i r e d t o comply
with t h e e r r o r r e s o l u t i o n procedure s?

A:

No, u n le s s t h e consumer a l s o a l l e g e s p o s s i b l e u n a u th o riz e d use as
a consequence o f t h e l o s s o r t h e f t . [§ 2 0 5 .1 1 ( a ) ]

- 40 11-3

Q: E r ro r a s s e r t e d a f t e r account c l o s e d . Must an i n s t i t u t i o n comply
with th e e r r o r r e s o l u t i o n procedure s i f a consumer a s s e r t s an
e r r o r a f t e r c l o s i n g t h e account r e l a t i o n s h i p with t h e i n s t i t u t i o n ?
A:

11-4

[ § 205.11]

Q: Request f o r documentation o r i n f o r m a t i o n . May a f i n a n c i a l i n s t i t u ­
t i o n assume, a b s e n t a s ta te m e n t t o t h e c o n t r a r y by t h e consumer,
t h a t a r e q u e s t f o r d u p l i c a t e c o p ie s o f documentation o r o t h e r
i n fo rm a tio n i s f o r t a x o r o t h e r re c o rd -k e e p in g purposes and t h e r e ­
f o r e not an a l l e g e d e r r o r ?
A:

11-5

Yes, assuming t h a t t h e e r r o r a l l e g a t i o n i s p ro p e r ly made.

No. Requests f o r d u p l i c a t e c o p ie s o f documentation o r o t h e r i n f o r ­
mation should be t r e a t e d as e r r o r s u n le s s i t i s c l e a r t h a t t h e
r e q u e s t by t h e consumer i s only f o r t a x o r o t h e r r e c o rd -k e e p in g
p u rp o s e s . [§ 2 0 5 . 1 1 ( a ) ( 7 ) J

Q: Statement held f o r consumer - tim in g o f e r r o r r i g h t s . A consumer
has a rrang ed f o r p e r i o d i c s ta t e m e n ts t o be made a v a i l a b l e a t th e
f i n a n c i a l i n s t i t u t i o n and held u n t i l c a l l e d f o r . For purposes o f
t h e 60-day tim e l i m i t s f o r a l l e g i n g an e r r o r , when i s t h e s ta te m e n t
f o r a p a r t i c u l a r c y c l e deemed t o have been t r a n s m i t t e d ?
A:

Q
:

F a i l u r e t o pro v id e s ta te m e n t - tim in g o f e r r o r r i g h t s . How q u i c k l y
must a consumer g ive n o t i c e t h a t t h e f i n a n c i a l i n s t i t u t i o n f a i l e d
t o p ro v ide a p e r i o d i c statem e n t?

A

11 -6

When i t i s f i r s t made a v a i l a b l e t o t h e consumer.
9 - 1 8 .) [§ 2 0 5 . 1 1 ( b ) ( 1 ) ( i ) (A)]

The n o t i c e o f e r r o r must be re c e iv e d by t h e i n s t i t u t i o n w ith in 60
days from t h e d a t e on which t h e s ta t e m e n t should have been t r a n s ­
m i t t e d . [§ 2 0 5 .1 1 ( a ) ( 7 ) and ( b ) ( l ) ( 1 ) ]

11-7

(See q u e s tio n

Discovery o f e r r o r by i n s t i t u t i o n . Does d is c o v e r y o f an e r r o r by
t h e f i n a n c i a l i n s t i t u t i o n r e q u i r e t h a t t h e i n s t i t u t i o n comply with
t h e e r r o r r e s o l u t i o n procedures?
A:

11-9

Q:

Content o f e r r o r n o t i c e . Must th e n o t i c e o f e r r o r given t o th e
f i n a n c i a l i n s t i t u t i o n c o n ta in t h e consumer account number?

A:

11-8

No. The procedure s need be followed only when a n o t i c e o f e r r o r
i s re c e iv e d from t h e consumer o r an a g en t o f t h e consumer.
[§ 2 0 5 . 1 1 ( b ) ( 1 ) ]

No, so long as th e n o t i c e e nab les t h e i n s t i t u t i o n t o i d e n t i f y t h e
account in q u e s t i o n . [§ 2 0 5 .l l ( b ) ( l ) ( i i )]
W ritte n c o n firm a tio n o f e r r o r n o t i c e . Must a f i n a n c i a l i n s t i t u t i o n
have r e f e r r a l procedure s f o r forwarding a w r i t t e n c o n firm a tio n o f
e r r o r t h a t i s s e n t t o t h e wrong a d d re ss ?

- 41 A:

11-11

Q:

W ritte n c o n firm a ti o n - tim ing o f i n v e s t i g a t i o n . May a f i n a n c i a l
i n s t i t u t i o n d e la y i t s i n v e s t i g a t i o n u n t i l i t has re c e iv e d a w r i t t e n
c o n f ir m a ti o n ?

A:

11-10

No. The r e f e r r a l requirem ent does n o t apply t o a w r i t t e n c o n firm a ­
t i o n t h a t i s s e n t t o an a d d re ss o t h e r tha n t h e one s p e c i f i e d t o th e
consumer a t t h e time o ra l n o t i c e was g iv e n . [§ 2 0 5 . 1 1 ( b ) ( 1 ) ( i )*
f o o t n o t e 10 and ( b ) ( 2 ) ]

No. The i n v e s t i g a t i o n must begin promptly upon r e c e i p t o f t h e ora l
n o t i c e . This requ irem ent i s n o t a f f e c t e d by t h e i n s t i t u t i o n ' s
r e q u e s t f o r w r i t t e n c o n f i r m a t i o n . [§ 2 0 5 . 1 1 ( c ) ( 1 ) , (2) and ( 3 ) ]

Q: D eadlines f o r i n v e s t i g a t i o n o f e r r o r . May a f i n a n c i a l i n s t i t u t i o n
ta k e t h e f u l l 10 b u s in e s s days o r 45 days t o i n v e s t i g a t e ?
A:

11-12

Q: Request f o r documentation - f a c s i m i l e o r photocopy. When a consumer
r e q u e s t s docu m en tation , may t h e i n s t i t u t i o n p ro v id e a f a c s i m i l e o r a
photocopy?
A:

11-13

photocopy o r f a c s i m i l e i s l e g i b l e .
(f)(3)]
•

By a t i m e l y response t o t h e e f f e c t t h a t t h e i n s t i t u t i o n does not
have t h e r e q u e s te d m a t e r i a l . [§ 2 0 5 . 1 1 ( d ) ( 2 ) ]

Q: Scope o f i n v e s t i g a t i o n - b i l l payment t o t h i r d p a r t y . A consumer
a l l e g e s an e r r o r in v o lv in g a payment t o a t h i r d p a r t y v ia a f i n a n ­
c i a l i n s t i t u t i o n ' s te le p h o n e b ill- p a y m e n t p la n . Is a review o f t h e
i n s t i t u t i o n ' s own re c o rd s a s u f f i c i e n t i n v e s t i g a t i o n ?
A:

11-15

Yes, so long as t h e
[§ 2 0 5 .1 1 (d ) (1 ) and

Q: Request f o r documentation - t h i r d p a r t i e s . A consumer r e q u e s t s
in fo rm a tio n o r documentation t h a t i s n o t In t h e i n s t i t u t i o n ' s
p o s s e s s i o n , b ut in t h e p osse ss io n o f a t h i r d p a r t y with whom th e
f i n a n c i a l i n s t i t u t i o n has no agreement. How does an i n s t i t u t i o n
comply with t h e e r r o r r e s o l u t i o n requ ire m e n ts?
A:

11-14

The requ irem ent i s t o i n v e s t i g a t e prom ptly ; t h e s t a t e d tim e p e r io d s
a r e maximums. [§ 2 0 5 . 1 1 ( c ) ( 1 ) and ( 2 ) ]

Yes, assuming t h e r e i s no agreement between t h e f i n a n c i a l i n s t i t u ­
t i o n and t h e t h i r d p a r t y concerning t h e te le p h o n e b i ll- p a y m e n t
s e r v i c e . [§ 2 0 5 . 1 1 ( d ) ( 2 ) ]

Q: Scope o f i n v e s t i g a t i o n - p r e a u th o r iz e d c r e d i t s . A consumer a l l e g e s
an e r r o r re g a rd in g an EFT d i r e c t d e p o s i t o f p a y r o l l . The f i n a n c i a l
i n s t i t u t i o n and t h e payor have an agreement with
r e s p e c t t o honoring
an a c c e s s d e vic e a t p o i n t - o f - s a l e
t e r m i n a l s , but
t h e r e i s noa g r e e ­
ment with t h e payor re g a rd in g t h e d i r e c t d e p o s i t
o f p a y r o l l . May
the financial i n s t i t u t i o n lim it i t s in v estig atio n of the d ir e c t
d e p o s i t e r r o r t o a review o f i t s own re c o rd s?

- 42 A:

11-17

Q:

Scope o f i n v e s t i g a t i o n - POS t r a n s f e r s . A merchant a g r e e s t o honor
a f i n a n c i a l i n s t i t u t i o n ' s a c c e s s d e v ic es a t th e m e r c h a n t 's POS
t e r m i n a l s . What i s t h e i n s t i t u t i o n ' s du ty t o i n v e s t i g a t e when a
consumer a l l e g e s an e r r o r in v o lv in g a t r a n s f e r t o t h e merchant v ia
t h e POS te r m in a l?

A:

11-16

Yes. The i n s t i t u t i o n would be r e q u i r e d t o i n v e s t i g a t e beyond i t s
own r e c o rd s only i f t h e a l l e g e d e r r o r involv ed a POS t r a n s f e r o r
i f t h e f i n a n c i a l i n s t i t u t i o n and t h e payor d id have an agreement
r e g a rd in g th e d i r e c t d e p o s i t o f p a y r o l l . [§ 2 0 5 . 1 1 ( d ) ( 2 ) ]

The f i n a n c i a l i n s t i t u t i o n must c o n t a c t t h e merchant d i r e c t l y o r ,
in systems l i k e t h e n a tio n a l c r e d i t card n e tw o rk s, i n d i r e c t l y by
c o n t a c t i n g th e m e r c h a n t 's bank. I t may not r e l y on in fo rm a tio n
p r e v i o u s l y t r a n s m i t t e d by t h e merchant w ith o u t v e r i f y i n g i t .
For
example, t h e f i n a n c i a l i n s t i t u t i o n may have t o r e q u e s t a copy o f
t h e s a l e s s l i p sig ned by t h e consumer in o r d e r t o v e r i f y t h a t th e
amount o f t h e t r a n s f e r corresp o n ds t o t h e amount o f t h e consum er's
p u rc h a se . A f i n a n c i a l i n s t i t u t i o n i s n o t r e q u i r e d , however, to
t a k e such s t e p s as sending an employee t o t h e m e r c h a n t 's p la c e o f
b u s i n e s s t o a s c e r t a i n t h e c o r r e c t c o s t o f t h e merchandise purchased
in th e t r a n s a c t i o n . [§ 2 0 5 . 1 1 ( d ) ( 2 ) ]

Q: E r ro r found - d i f f e r e n t from t h a t a l l e g e d . When a f i n a n c i a l i n s t i ­
t u t i o n d e te rm in e s t h a t an e r r o r o ccu rred in a manner o r amount
d i f f e r e n t from t h a t d e s c r ib e d by t h e consumer, must t h e i n s t i t u t i o n
comply with both (1) t h e procedure s a p p l i c a b l e when t h e i n s t i t u t i o n
de te rm in e s t h a t no e r r o r occurred and (2) t h e pro cedures a p p l i c a b l e
when i t de te rm in e s t h a t an e r r o r did occur?
A:

11-18

Q: C re d itin g
o f i n t e r e s t . Does t h e requirem ent t o c r e d i t i n t e r e s t
apply t o a l l e r r o r c o r r e c t i o n s ?
A:

11-19

Yes, t o t h e e x t e n t t h a t t h e pro cedures a r e r e l e v a n t .
In such a
c a s e , t h e i n s t i t u t i o n may g iv e n o t i c e o f c o r r e c t i o n and t h e e x p l a ­
n a t i o n e i t h e r s e p a r a t e l y o r in a combined form.
[§ 205.11(e) and ( f ) ]
.

No, i t a p p l i e s only t o th o s e in v o lv in g i n t e r e s t - b e a r i n g a c c o u n t s .
[§ 2 0 5 . 1 1 ( e ) ( 1 ) ]

Q: Refunding
o f fe e s and c h a r g e s . Is t h e f i n a n c i a l i n s t i t u t i o n
required,
when i t c o r r e c t s an e r r o r , t o refund a l l fe e s or charges
imposed on th e account?
A:

The f i n a n c i a l i n s t i t u t i o n i s r e q u ir e d t o refund th o s e fe e s o r
ch arg es t h a t were imposed as a consequence o f t h e e r r o r .
In a com­
bined c r e d it/E F T t r a n s a c t i o n , f o r example, t h e f i n a n c i a l i n s t i t u t i o n
must re fund any fin a n c e charges i n c u r r e d as a r e s u l t o f t h e e r r o r .
Fees o r c h arg es t h a t would have been imposed even i f t h e e r r o r had
not o ccu rred need not be refunded. [§ 2 0 5 . 1 1 ( e ) ( 1 ) ]

- 43 11-20

W ritten e x p l a n a t i o n - t i m i n g .
I f an i n s t i t u t i o n completes i t s
i n v e s t i g a t i o n on day 45 and determ ines t h a t no e r r o r o c c u r r e d ,
must i t send th e w r i t t e n e x p la n a ti o n t h a t same day?
Under t h e 45-day l i m i t , th e f i n a n c i a l i n s t i t u t i o n has an a d d i t i o n a l
3 b u s in e s s days t o send th e e x p l a n a t i o n .
I f , however, t h e f i n a n c i a l
i n s t i t u t i o n i s proceeding under t h e 10 -b u s in e ss -d a y p r o v i s i o n and
d e te rm in e s on day 10 t h a t no e r r o r o c c u r r e d , t h e i n s t i t u t i o n does
not have an a d d i t i o n a l 3 b u s in e s s d a y s ; i t must send t h e e x p la n a ­
t i o n on day 10. [§ 2 0 5 . 1 1 ( f ) ( 1 ) ]

Q:

D eb itin g o f r e c r e d i t e d funds - items t o be honored. I f a f i n a n c i a l
i n s t i t u t i o n d e b i t s a consumer's account f o r p r o v i s i o n a l l y r e c r e d i t e d
f u n d s , must i t honor a l l items p re s e n te d d u rin g t h e succeedin g 5
b u s in e s s days?
No. The f i n a n c i a l i n s t i t u t i o n
need honor only t h o s e items t h a t
would have been p a i d , under t h e b a n k 's normal o p e r a t i n g p r o c e d u r e s ,
i f t h e account had not been d e b i t e d . For example: i f an account
w ith a b a la n ce o f $155 i s d e b ite d in t h e amount o f $100 f o r p r o v i ­
s i o n a l l y r e c r e d i t e d funds ( le a v in g a balance o f $55) and checks
f o r $150 and $200 a r e p re s e n te d by t h i r d p a r t i e s , t h e f i n a n c i a l
i n s t i t u t i o n need honor only t h e $150 ite m . Moreover, t h e i n s t i t u ­
t i o n need honor o nly items (in c lu d in g p r e a u t h o r i z e d t r a n s f e r s )
payable t o t h i r d p a r t i e s . I t need not perm it ATM o r o t h e r cash
w ith draw als by t h e consumer. [§ 2 0 5 . 1 1 ( f ) ( 2 ) ( H ) ]

Q:

Debiting o f r e c r e d i t e d funds - an a l t e r n a t i v e p r o c e d u re . I f t h e
i n s t i t u t i o n i n s t e a d e s t a b l i s h e s a procedure under which i t n o t i f i e s
t h e consumer t h a t t h e consumer's account w ill be d e b i t e d 5 b u s in e s s
days from t h e t r a n s m i t t a l o f th e n o t i f i c a t i o n — and s p e c i f i e s
t h e c a l e n d a r d a t e on which t h i s d e b i t i n g w ill oc cu r - - does t h i s
p rocedure s a t i s f y t h e requirement?

A:
11-24

Q:

A:

11-23

Whether such a m a ilin g w ill be prompt enough t o s a t i s f y t h e r e q u i r e ­
ment must be dete rm ined by t h e f i n a n c i a l i n s t i t u t i o n , ta k i n g i n t o
account t h e s p e c i f i c f a c t s in v o lv e d . [§ 2 0 5 . 1 1 ( e ) , f o o t n o t e 12]

A:

11-22

Notice o f c o r r e c t i o n - t i m i n g .
The r e g u l a t i o n r e q u i r e s n o t i c e o f
a c o r r e c t i o n t o be given promptly. Is t h i s re q u ire m e nt s a t i s f i e d
i f t h e i n s t i t u t i o n i n c lu d e s t h e n o t i c e on a p e r i o d i c s ta te m e n t
m ailed w ith in t h e 10 b u s in e s s days o r 45 c a l e n d a r days?

A:

11-21

Q:

Yes.

Q:

D ebitin g o f r e c r e d i t e d funds - charges f o r o v e r d r a f t s . May a
f i n a n c i a l i n s t i t u t i o n charge t h e consumer f o r o v e r d r a f t s which
occur as a consequence o f th e f a c t s d e s c rib e d in q u e s ti o n 11-22?

A:

The f i n a n c i a l i n s t i t u t i o n may not charge th e consumer f o r o v e r d r a f t
items t h a t a r e honored as a consequence o f th e 5 -b u s in e ss -d a y
re q u ire m e n t.
I t may, however, impose any normal t r a n s a c t i o n or

[§ 2 0 5 . 1 1 ( f ) ( 2 ) ( i i ) ]

I

- 44 item charges t h a t a re u n r e l a t e d t o an o v e r d r a f t r e s u l t i n g from th e
d e b i t i n g . The i n s t i t u t i o n may, f o r example, impose a r e t u r n - i t e m
charge r e l a t i v e t o t h e $200 r e t u r n e d item r e f e r r e d t o in q u e s ti o n
11- 2 2.
A fte r t h e 5 b u s in e s s d a y s , i f t h e account i s s t i l l overdrawn th e
i n s t i t u t i o n may impose f in a n c e ch arg es t o which i t i s e n t i t l e d
( i f any) under an o v e r d r a f t c r e d i t p l a n . [§ 2 0 5 . 1 1 ( f ) ( 2 ) ( i i ) ]
11-25

Q: Documents r e l i e d on r e q u e s t from consumer. When a consumer
r e q u e s t s c o p ie s o f documents t h a t t h e f i n a n c i a l i n s t i t u t i o n r e l i e d
on in d e te rm in in g t h a t no e r r o r o c c u r r e d , what i s re q u ir e d ?
A:

11-26

Q: Documents r e l i e d on - p riv a c y i s s u e . I f a document c o n t a i n s i n f o r ­
mation on se v e ra l consumers, should a copy o f t h e e n t i r e document
be given t o t h e consumer?
A:

11-27

The f i n a n c i a l i n s t i t u t i o n may comply with t h e requirem ent t o provide
c o p ie s of documentation by informing t h e consumer t h a t t h e r e l e v a n t
documents were searched and were found t o c o n ta in no in fo rm a tio n
about t r a n s f e r s r e l a t i n g t o th e consumer. [§ 2 0 5 . 1 1 ( f ) ( 1 ) and ( 3 ) ]

Q: Withdrawal of e r r o r n o t i c e .
A consumer withdraws an a l l e g a t i o n of
e rro r a f t e r the i n s t i t u t i o n
has i n v e s t i g a t e d and has dete rm ined
t h a t no e r r o r o c c u r r e d , but b e f o r e t h e i n s t i t u t i o n provided th e
w r i t t e n e x p l a n a t i o n . May th e i n s t i t u t i o n t r e a t th e e r r o r as
v o l u n t a r i l y withdrawn?
A:

11-29

No. To p r o t e c t t h e priv a c y o f t h e o t h e r consumers, t h e i n s t i t u t i o n
should provid e only t h e in fo rm a tio n o r documentation r e l a t i n g t o
t h e consumer a l l e g i n g
t h e e r r o r . [§ 2 0 5 . 1 1 ( f ) ( 3 ) ] '

Q: Documents r e l i e d on - no in fo rm a tio n on r e l e v a n t t a p e s . I f a f i n a n ­
c i a l i n s t i t u t i o n ' s i n v e s t i g a t i o n shows t h a t t h e r e i s no in fo r m a tio n
r e l a t i n g t o t h e consumer on t h e magnetic ta p e o r o t h e r documenta­
t i o n in q u e s t i o n , what does
th e i n s t i t u t i o n have t o provide?
A:

11-28

The i n s t i t u t i o n should provide c o p ie s o f t h e documentation in a
r e a d i l y u n d e rs ta n d a b le form. An i n s t i t u t i o n t h a t r e l i e s on magnetic
t a p e in making i t s d e te rm in a tio n should t r a n s l a t e th e d a ta i n t o
re a d a b le form — by p r i n t i n g o u t t h e a p p l i c a b l e d a ta and e x p l a i n i n g
t h e c o d e s , f o r example. [§ 2 0 5 . 1 1 ( f ) ( 3 ) ]

Yes.

[§ 2 0 5 .1 1 (g ) ]

Q: Withdrawal o f e r r o r n o t i c e .
A consumer c a l l s t h e f i n a n c i a l i n s t i ­
t u t i o n t o q u e s ti o n t h e amount o f a Social S e c u rity d e p o s i t , and
th e i n s t i t u t i o n s u g g e s ts th e d i f f e r e n c e may be due t o a general
d e c r e a s e in b e n e f i t s .
Is th e consumer's accepta nce o f t h e e x p la n a ­
t i o n a v o lu n ta ry withdrawal o f an e r r o r a l l e g a t i o n ?
A:

Yes.

[§ 2 0 5.1 1 (g)]

- 45 11-30

Q: R e a s s e rti o n o f e r r o r . Does a consumer who has withdrawn an a l l e g a ­
t i o n o f e r r o r have t h e r i g h t t o r e a s s e r t t h e a l l e g a t i o n ?
A:

11-31

Q: Charges f o r e r r o r r e s o l u t i o n .
May a f i n a n c i a l i n s t i t u t i o n charge
consumers f o r t h e i n s t i t u t i o n ' s compliance with t h e e r r o r r e s o l u ­
t i o n procedure s?
A:

11-32

Yes, u n le s s t h e f i n a n c i a l i n s t i t u t i o n had complied w ith a l l o f t h e
e r r o r r e s o l u t i o n re q u ire m e n ts b e fo re t h e a l l e g a t i o n was withdrawn.
The consumer must, however, r e a s s e r t t h e e r r o r by g iv in g pro p e r
n o t i c e w ith in t h e o r i g i n a l 60-day p e r i o d . [§ 205.11(b) and ( h ) ]

Although t h e r e g u l a t i o n i s s i l e n t on t h i s p o i n t , t h e Board has
e x p re ss e d concern about any c h i l l i n g e f f e c t on t h e good f a i t h
a s s e r t i o n o f e r r o r s t h a t might r e s u l t from t h e im p o s itio n o f c h arges,
F in a n c ia l i n s t i t u t i o n s should be aware o f t h e p r o h i b i t i o n a g a i n s t
agreements t h a t c o n s t i t u t e a waiver o f r i g h t s c o n f e r r e d by t h e a c t .
[§ 2 05 .11 , § 914]

Q: A pp licab le e r r o r r e s o l u t i o n p r o v i s i o n s - o v e r d r a f t c r e d i t l i n e . A
consumer withdraws f"n d s from
a checking account by use o f an ATM
and t h e withdrawal overdraws t h e a c c o u n t, th e r e b y r e s u l t i n g in a
t r a n s f e r o f funds from t h e
c r e d i t l i n e t o t h e checking
a c c o u n t. I f
an e r r o r i s a l l e g e d , which
e r r o r r e s o l u t i o n procedure s
apply t o th e
o v e r d r a f t p o r t i o n , R egulation E o r R egulation Z?
A:

Regulation E a p p l i e s because t h e r e has been an e l e c t r o n i c fund
t r a n s f e r . The f i n a n c i a l i n s t i t u t i o n must fo llo w t h e re q u irem en ts
o f t h e e r r o r r e s o l u t i o n p r o v i s i o n s o f Regulation E t h a t deal with
t h e d e f i n i t i o n o f e r r o r , re quirem ents f o r n o t i c e , and pro cedures
for correction of e rro rs .
S e c tio n s 226.13(d) and (g)
o f Regulation Z c o n tin u e t o
apply t o t h e
c r e d i t e x te n s io n p o r t i o n . These in c lu d e t h e temporary p r o h i b i t i o n
on c o l l e c t i o n a c t i o n s ; th e consumer's r i g h t t o w ithhold d i s p u t e d
amounts; t h e l i m i t a t i o n on a d verse c r e d i t r e p o r t s ; and t h e r i g h t
t o p re v e n t an autom atic d e b i t o f d i s p u t e d amounts. [§ 2 0 5 .1 1 (i )]

11-33

Q:

A pplicable e r r o r r e s o l u t i o n pro cedures - c r e d i t c a r d / a c c e s s d e v i c e .
i t a consumer uses a combined c r e d i t c a r d / a c c e s s de vic e t o withdraw
funds a t an ATM d i r e c t l y from a n o n - o v e r d r a f t c r e d i t l i n e and l a t e r
a l l e g e s an e r r o r , which e r r o r r e s o l u t i o n procedure s apply — Regula­
t i o n E o r Regulation Z?

A:

R egulation Z a p p l i e s because t h e c r e d i t l i n e i s not a consumer a s s e t
a c c o u n t. The t r a n s a c t i o n th u s does not in v o lv e an e l e c t r o n i c fund
t r a n s f e r . [§ 2 0 5 .1 1 (1 ) ]

- 46 Section 205.12 - - R e la tio n t o S t a t e Law
12-1

Q:

Preemption o f s t a t e EFT laws - s p e c i f i c d e t e r m i n a t i o n s . The re g u ­
l a t i o n p r e s c r i b e s s t a n d a r d s f o r d e te rm in in g ’ ’whether s t a t e laws t h a t
’’
govern e l e c t r o n i c fund t r a n s f e r s a r e preempted by t h e a c t and th e
regulation.
I f , under t h e s e s t a n d a r d s , s t a t e law i s i n c o n s i s t e n t
with th e fe d e r a l law , i s t h e s t a t e law a u t o m a t i c a l l y preempted?

A:

No. A s p e c i f i c d e te r m in a tio n o f preemption w ill be made by t h e
Board. I n t e r e s t e d p a r t i e s seeking a d e te r m in a tio n should fo llo w t h e
pro cedures s e t f o r t h in t h e r e g u l a t i o n . [§ 205.12(a) and ( b ) ]

Sectio n 205.13 — A d m in is tr a tiv e Enforcement
13-1

D is c lo s u r e forms - compliance. Will t h e Board o r i t s s t a f f review
o r approve d i s c l o s u r e forms o r s ta t e m e n ts f o r f i n a n c i a l i n s t i t u t i o n s ?

A:

No. However, t h e Board has is s u e d model c la u s e s t h a t f i n a n c i a l
i n s t i t u t i o n s may u s e , i f th e y w ish , when de sig n in g t h e i r forms or
s t a t e m e n t s . I f a f i n a n c i a l i n s t i t u t i o n uses t h e s e c l a u s e s a c c u r ­
a te ly to r e f l e c t i t s s e rv ic e s , the financial i n s t i t u t i o n is protected
from l i a b i l i t y f o r f a i l u r e t o make d i s c l o s u r e s in p ro p er form.
[Appendix A, § 9 1 5 (d ) ]

Q:

Record r e t e n t i o n - evid ence o f comp!iance. Must a f i n a n c i a l i n s t i ­
t u t i o n r e t a i n re c o rd s t h a t i t has given d i s c l o s u r e s and documenta­
t i o n t o each consumer?

A:

13-2

Q:

No, i t need only r e t a i n evidence d e m o nstra tin g t h a t i t s procedures
re a so n a b ly i n s u r e t h e consumer's r e c e i p t o f t h e r e q u i r e d d i s c l o s u r e s
and documentatio n. [§ 2 0 5 . 1 3 ( c ) ( 1 ) ]

Sectio n 205.14 — S e rv ic e s Offered by F in a n c ia l I n s t i t u t i o n s
Not Holding Consumer's Account
14-1

Q:

A p p l i c a b i l i t y t o p r e a u th o r iz e d c r e d i t s . Does t h i s s e c t i o n apply
t o an i n s t i t u t i o n which i n i t i a t e s p re a u th o r iz e d e l e c t r o n i c p a y ro ll
d e p o s i t s on b e h a l f o f t h e consumer's employer t o t h e consumer's
account a t a n o th e r f i n a n c i a l I n s t i t u t i o n ?

A:

No. This s e c t i o n a p p l i e s only when t h e s e r v i c e - p r o v i d i n g i n s t i t u ­
t i o n i s s u e s an a cc e ss d e vic e t o a consumer (a d e b i t c ard o r a co d e,
f o r example) w ith which t h e consumer can i n i t i a t e t r a n s f e r s t o o r
from th e consumer's account a t a n o th e r i n s t i t u t i o n , and t h e two
i n s t i t u t i o n s have no agreement with re g a rd t o t h i s s e r v i c e . Because

- 47 a code used t o i n i t i a t e te le p h o n e t r a n s f e r s i s an a cc e ss d e v i c e , t h e
s e c t i o n a p p l i e s , f o r example, when a f i n a n c i a l i n s t i t u t i o n which
h o ld s a consumer's account p e r i o d i c a l l y t r a n s f e r s funds t o or from
t h e consumer's account a t a n o th e r f i n a n c i a l i n s t i t u t i o n upon r e c e i v i n g
i n s t r u c t i o n s from t h e consumer on t h e t e l e p h o n e . [§ 2 0 5.14(a) and
(c)]
14-2

Q:

A:
14-3 Q:

A p p l i c a b i l i t y of account a t both i n s t i t u t i o n s . Does t h e f a c t
t n a t t h e consumer h olds an account a t both f i n a n c i a l i n s t i t u t i o n s
in volved in t h e t r a n s f e r neg ate t h e a p p l i c a t i o n o f t h i s s e c t i o n ?
No, assuming t h e i n s t i t u t i o n s have no agreements with each o t h e r as
t o t h e EFT s e r v i c e . [§ 2 0 5 . 1 4 ( a ) ]

Agreement. I f an ACH e s t a b l i s h e s arrangements in which i t s members
a g re e t o honor each o t h e r ' s EFT c a r d s , 1s t h e r e an "agreement" f o r
purposes o f t h i s s e c t i o n ?
A:
Q:

P e r io d i c s ta te m e n t - s e r v i c e - p r o v i d i n g i n s t i t u t i o n . Does t h e
s e r v i c e - p r o v i d i n g i n s t i t u t i o n have t o p ro v ide t o t h e consumer a
p e r i o d i c s ta te m e n t showing t r a n s f e r s o t h e r th a n e l e c t r o n i c fund
t r a n s f e r s made with t h e s e r v i c e p r o v i d e r ' s a c c e s s d e v ic e?

A:

14-4

Yes.

[§ 2 0 5 . 1 4 ( c ) ]

No.

[§ 2 0 5 . 1 4 ( a ) ( 2 ) ]

INDEX
Access Device (see a l s o Issuance o f Access Devices)
C a n c e l l a t i o n , 8-5
Examples, 2-1
I d e n t i f i c a t i o n c a r d , remote d is b u rs e m e n t, 2-13
I d e n t i f i c a t i o n of consumer, 6 - 3 , 6-4
I n t e r - i n s t i t u t i o n a l t r a n s f e r s , 14-1
Issued by n o n -a c co u n t-h o id in g i n s t i t u t i o n , 14-1
L i a b i l i t y f o r u n a u th o riz e d u s e , 5 - 4 , 5 - 8 , 6 - 2 , 6 - 5 , 6-6
T e l l e r - o p e r a t e d t e r m i n a l s , 2-25
Account
A c ce ss ib le by EFT, meaning, 2-11, 9 -15 , 9-17
ATM d e p o s i t s t o , 2-11
Christmas c l u b , v a c a tio n c l u b , 2-5
C redit a c c o u n ts , 2-12

- 48 Account ( c o n t ' d . )
Escrow a c c o u n t s , 2-3
Pension a c c o u n t s , 2-2
P r o f i t s h a r in g a c c o u n t s , 2-2
U. S. Savings Bond fund, 2-4
Business Day
Busin ess f u n c t i o n s , 2 -6 , 2-7
Business h o u r s , 2 - 8 , 2-9
F a i l u r e t o d i s c l o s e , 6-2
R ep ortin g l o s t / s t o l e n a c c e s s d e v i c e , 2 -6 , 2 -7 , 2-8
Resolving e r r o r s , 2-6
S aturday/S unday, 2 - 6 , 2-7
Telephone l i n e a v a i l a b i l i t y , 2-7
Change in Terms
Changes t h a t need not be d i s c l o s e d , 8 - 2 , 8 - 3 , 8 - 4 , 8-5
Changes t o be d i s c l o s e d , 5 - 2 , 8 - 1 , 8-4
Change in t e r m s , new i n i t i a l d i s c l o s u r e s , 8-6
Termination of s e r v i c e , 8-5
Check Guarantee or A u t h o r i z a t i o n , 3-1
C r e d it Repayments

.

Compulsory u s e , 3 -5 , 3-7
Payroll a l l o t m e n t s , 2-12
Deposits
At ATM, 2-11, 9 -1 4 , 9 -2 5 , 9-34
D is c lo s u r e o f Terms and C onditio ns
A dditio nal s e r v i c e s , 7-6
Blanket d i s c l o s u r e s , 7-5
Change in te r m s , 8 - 1 , 8 - 2 , 8-6
Closing of a c c o u n t , 8-3
C ontents
c h a r g e s , 7 -1 2 , 7 -1 3 , 7 -14 , 7 -15 , 8-1
l i a b i l i t y d i s c l o s u r e s , 7 - 7 , 7 - 8 , 8-1
l i m i t a t i o n s on u s e , 7 -1 1 , 8 - 1 , 8 - 3 , 8-4
summary o f r i g h t s , 7-9
t e le p h o n e numbers, 7 -1 9 , 7 -20 , 8-2
ty p e s o f EFT s e r v i c e s , 7 - 6 , 7 -1 0 , 8-1

- 49 D is c l o s u r e o f Terms and C ondition s ( c o n t ' d . )
E r ro r r e s o l u t i o n n o t i c e , 7 - 1 8 , 8 - 7 , 8-8
Form, d e t a i l , 7-3
J o i n t account d i s c l o s u r e s , 4-3
Model c l a u s e s , 7 - 9 , 7-18
M u l t i p l e a c c o u n t s , d i s c l o s u r e s f o r , 4-3
P r e a u th o ri z e d t r a n s f e r s e r v i c e s , d i s c l o s u r e s f o r , 7 - 2 , 7 - 7 , 7-10
P r iv a c y d i s c l o s u r e , 7 -1 6 , 7-17
Shared system , 4 - 1 , 4-2
Socia l S e c u r i t y d e p o s i t s , 7-2
Spanish la n g u a g e , 7-4
Stop-payment o r d e r s , charges f o r , 7-15
Telephone numbers, 7 -1 9 , 7-20
Timing o f , 7 - 1 , 7 - 2 , 7-6
Third p a r t i e s , p riv a c y d i s c l o s u r e , 7-17
E l e c t r o n i c Fund T r a n s fe r
ACH t r a n s f e r s , 2 -1 7 , 2 -1 8 , 2 -2 0 , 3-3
ATM d e p o s i t s , 2-11
Cash payments a t ATM, 2-10
Check, d r a f t , o r s i m i l a r paper i n s t r u m e n t , 2 -13, 2-14, 2-2 0 , 2-21
Check t r u n c a t i o n system , 2-14
Composite ch ec k s , 2-16, 2 -18, 2-19
Compulsory u s e , 3 - 5 , 3 - 6 , 3-7
Computer g e n e r a te d c h e c k s , 2-21
Fund disbursem ent by remote f i n a n c i a l i n s t i t u t i o n , 2-13
Loan payments from p a y r o l l , 2-12
Magnetic t a p e , 2 -1 6 , 2 -1 9 , 3-2
Paper d r a f t s , 2-20
Payee in fo r m a tio n in paper form, 2-15, 2-18
Social S e c u r ity t r a n s f e r s , 2-18
T e l l e r - o p e r a t e d t e r m i n a l s , 2-25
E l e c t r o n i c Terminal
Home banking, 2-23
P o i n t - o f - s a l e t e r m i n a l s , 2-24
T e l e p h o n e - i n i t i a t e d t r a n s f e r s , 2-22
T e l l e r - o p e r a t e d t e r m i n a l s , 2-25
Enforcement
Approval o f forms, 13-1
Record r e t e n t i o n , 13-2
E r r o r R esolu tion
A l l e g a t i o n withdrawn, 11-28, 11-29, 11-30
A p p lic a tio n of R egulation Z, 11-32, 11-33
Charges, 11-19, 11-24, 11-31
C o rre c tio n o f e r r o r , 11-17, 11-18, 11-19, 11-20

- 50 E r ro r R e s o lu tio n ( c o n t ' d . )
Documents r e l i e d on, 11-25, 11-26, 11-27
E rro rs s u b j e c t t o p r o c e d u r e s , 11-1, 1 1 -2 , 1 1 -3 , 1 1 -4 , 11-7
E x p lan a tio n t o consumer, 11-21
F a i l u r e t o p rov id e s t a t e m e n t , 11-6
L o s s / t h e f t o f access d e v i c e , 11-2
Notice o f e r r o r from consumer, 11-5, 1 1 -6 , 11-8
Prompt i n v e s t i g a t i o n , 11-10, 11-11
P r o v is io n a l r e c r e d i t i n g / r e d e b i t i n g , 11-22, 1 1-23, 11-24
Request f o r documents, 11-4, 11-12, 11-13, 11-25, 11-26, 11-27
Request f o r d u p l i c a t e c o p i e s , 11-4
Third p a r t y in v o lv e d , 11-13, 11-14, 11-15, 11-16
T r a n s f e r i n i t i a t e d by i n s t i t u t i o n , 2 -2 6 , 11-1
Use o f "w ill c a l l " s t a t e m e n t s , 11-5
W ritten c o n f i r m a t i o n , 1 1 -9 , 11-10
E r r o r R e s o lutio n Notice
Change t o l o n g / s h o r t form, 8 -8
Required d i s c l o s u r e , 7 -1 8, 8-7
Timing o f n o t i c e , 8-8
Fedwire T r a n s f e r s , 3 - 2 , 3-3
Fin a n c ia l I n s t i t u t i o n
Non-account-holding i s s u e r of acc e ss d e v i c e , 14-1, 14-2, 14-3, 14-4
I n t r a - i n s t i t u t i o n a l T r a n s fe rs
i

♦ A f f i l i a t e d i n s t i t u t i o n s , 3 -1 2 , 3-13
Automatic repayments, 3 - 5 , 3-7
Between consumer's a c c o u n t s , 3 -4 , 3-8
Check o r d e r , o t h e r account c h a r g e s , 3 - 9 , 3-11
Compulsory use of EFT, 3 - 5 , 3-6
Group i n s u r a n c e , 3-10
I n s t i t u t i o n as employer, 3-6
Paired i n s t i t u t i o n s , Rhode I s l a n d , 3-12
Issuance of Access Devices
D is c lo s u re s r e q u i r e d , 5 - 2 , 5 - 4 , 7-20
R e l a t i o n t o Truth in Lending, c r e d i t c a r d s , 5 - 9 , 5-10
Renewal o r s u b s t i t u t e d e v ic es
f o r o t h e r th a n a ccepted d e v i c e , 5-4
g e n e r a l l y , 5 - 1 , 5 - 2 , 5-4

- 51 Issuance o f Access Devices ( c o n t ' d . )
Successor f i n a n c i a l I n s t i t u t i o n , 5-3
U n s o l i c i t e d a cc e ss d e v i c e
p r e - 2 / 8 / 7 9 i s s u a n c e , 5 -4
v a l i d a t i o n p r o c e d u r e , 5 - 5 , 5 - 6 , 5-7
v e r i f i c a t i o n of i d e n t i t y , 5 -8
Issuance o f R eceip ts

(see R eceip ts a t E l e c t r o n i c Term in als)

L i a b i l i t y f o r U nauthorized T r a n s fe rs
Con ditions of imposing l i a b i l i t y
a ccepted a cc e ss d e v i c e , 5 -4
acc e ss d e v i c e , 6-2
d i s c l o s u r e s r e q u i r e d , 6 - 2 , 7 - 7 , 7 - 8 , 8-2
i d e n t i f i c a t i o n , means o f , 5 - 5 , 6 - 3 , 6-4
m u l t i p l e u s e r s , one a c c o u n t, 6-3
use o f personal i d e n t i f i c a t i o n number (PIN), 5 - 5 , 6-4
L i m i t a t i o n s , 6-5
Loss o r t h e f t o f an a cc e ss d e v i c e , 6 - 5 , 6-6
Notice t o f i n a n c i a l i n s t i t u t i o n , 6 - 7 , 6-8
P e r i o d i c s ta te m e n t r e f l e c t i n g u n a u th o riz e d t r a n s f e r s , 6-6
R elatio n t o Truth in Lending, 6 - 9 , 6 - 1 0 , 6-11
Passbook a c c o u n t s . 9 -1 5 , 9 -2 1 , 9 -45, 9 -4 6 , 9 -4 7 , 9-4 8 , 10-12
P e r io d i c s tatem e n ts
Accompanying documents, 9 -2 3 , 9-24
Accounts r e q u i r i n g , 9 -1 5 , 9-17
Codes, 9 -23 , 9 -38, 9-39
Contents
b a l a n c e , 9-32
c h a r g e s , 9-31
in fo r m a tio n from t h i r d p a r t i e s , 9-25
te le p h o n e number, 9 -3 3 , 9-34
te r m i n a l l o c a t i o n , 9 -26, 9-38, 9 -3 9 , 9-4 0 , 9-41
t h i r d p a r t i e s , 9 -2 5 , 9 -2 8 , 9 -2 9 , 9 -3 0 , 9 -4 1 , 9 -4 2 , 9 -4 3 , 9-44
t y p e and i d e n t i f i c a t i o n o f a c c o u n t, 9-37
• t y p e of t r a n s f e r , 9 - 2 7 , 9 -3 6 , 9-37
Customer p i c k - u p , 9 -1 8 , 11-5
C y c le s , 9 -1 9 , 9-20
Documentation accompanying, 9 -2 3 , 9-24
Erro r r e s o l u t i o n , 9 -3 3 , 9 -3 5 , 9 -4 4 , 1 1 -5 , 11-6
Form, 9-24

- 52 P e r i o d i c sta te m e n ts ( c o n t ' d . )
F in a n c ia l i n s t i t u t i o n as t h i r d p a r t y , 9-43
Frequency r e q u i r e d , 9 -1 6 , 9 - 1 7 , 9 -1 9 , 9-45
Manner o f t r a n s m i t t a l , 9 -1 8 , 11-5
Non-passbook a c c o u n t s , 9-49
Passbook acounts
p r e a u t h o r i z e d c r e d i t s , 9 -4 6 , 9-47
up d atin g of passbook, 9 - 4 5 , 9 - 4 7 , 9-48
P r e a u t h o r i z e d T r a n s fe rs
A u t h o r i z a t i o n s , 10-16, 10-17, 10-18
C r e d i t i n g consumer's a c c o u n t, t i m i n g , 10-13, 10-14, 10-15
D i s c l o s u r e s , 7 - 1 , 7 - 7 , 7-10
From consumer's a c c o u n t, w r i t t e n a u t h o r i z a t i o n , 10-16, 10-17, 10-18
I n t e r - i n s t i t u t i o n a l t r a n s f e r s , 14-1
N otice o f r e c e i p t
c o n t e n t , 1 0-5, 10-6
from p a y o r, 10-3, 10-4
g e n e r a l , 1 0-1, 1 0-2, 1 0-3, 1 0 -5 , 10-6
n e g a t i v e / p o s i t i v e n o t i c e , 1 0-2, 10-7, 10-8, 10-9
passbook a c c o u n t s , 9 -5 4 , 10-12
p e r i o d i c s t a t e m e n t , 10-7
te le p h o n e n o t i c e , 10-10, 10-11, 10-12, 10-15
P r e - e x i s t i n g a u t h o r i z a t i o n s , 10-16, 10-17
Stop-payment o r d e r , 10-22
Unauthorized t r a n s f e r s , 2 -26, 6 - 1 , 7-7
Varylng-payment n o t i c e , 10-20, 10-21
R eceip ts a t E l e c t r o n i c Terminals
As proof o f payment, 9-14
A v a i l a b i l i t y , 9 -1 , 9 -2 , 9-3
Contents
cod es, 9-4
d a t e , 9-7
i d e n t i f i c a t i o n of consumer, 9-11
m u l t i p l e a c c o u n t s , 9-8
m u l t i p l e t r a n s f e r s , 9-4
te rm in a l l o c a t i o n , 9 -1 2 , 9 -3 7 , 9 -38, 9 -3 9 , 9 -40, 9-41
t h i r d p a r t i e s , 9 -1 3 , 9 -4 1 , 9 -4 2 , 9 -4 3 , 9-44
t y p e / i d e n t i f i c a t i o n of a c c o u n t, 9 -8 , 9 - 9 , 9 -1 0 , 9 -11, 9-37
ty p e of t r a n s f e r , 9 -3 6 , 9-37
F a i l u r e t o p r o v i d e , 9-6
Form, 9 - 3 , 9-4
Hard Copy, 9-3
Issued through t h i r d p a r t i e s , 9-2

- 53 R eceip ts a t E l e c t r o n i c Terminals ( c o n t ' d . )
Payments, a u t h o r i z e d by phone, 2-22
Point o f s a l e , 2 -24, 9-9
T e l l e r - o p e r a t e d t e r m i n a l s , 2-25
T r a n s fe r not comple te d, 9-5
Readily u n d e r s t a n d a b l e , 9-4
Use o f c o d e s , 9 -1 1 , 9 -3 7 , 9-38
Shared Systems
D i s c l o s u r e s , 4 - 1 , 4-2
S t a t e Law, preemption o f , 12-1
Telephone A l t e r n a t i v e
Deposit v e r i f i c a t i o n , 9 -4 5 , 10-1, 10-10, 10-11, 10-12
Telephone T ra n s fe rs
Covered t r a n s f e r s , 3 - 4 , 3 -17, 3 -18, 3-19
E l e c t r o n i c t e r m i n a l , 2-22
Offered by n o n-a c co u n t-h o ld in g i n s t i t u t i o n , 14-1, 14-2
R egulation D l i m i t a t i o n s , 3-16
W ritten p l a n , 3-14, 3-15, 3-16
T rust exem ption, 3-20, 3-21
Unauthorized T r a n s f e r s (See L i a b i l i t y f o r Unauthorized T r a n s f e r s )

Board o f Governors o f th e Federal Reserve System, September 16, 1981.

[SEAL]

(s ig n e d ) William W Wiles
.
W 111 am W W I es
i
. i
S e c r e ta r y of th e Board