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F ederal reserve Ba n k DALLAS, TEXAS of D allas 75222 Circular No. 80-35 February 26, 1980 REVISED REGULATION E PAMPHLET TO ALL MEMBER BANKS, AND OTHERS CONCERNED IN THE ELEVENTH FEDERAL RESERVE DISTRICT: The Board o f Governors of the Federal R eserve System has issued the revised R egulation E pamphlet as amended e ffe c tiv e May 10, 1980. The changes were explained in our Circular No. 80-28, dated February 13, 1980. Member banks and others who maintain Regulations Binders should file the enclosed pamphlet in their binders. The previous pamphlet and am endm ents should be rem oved and destroyed. Additional copies o f the pamphlets w ill be furnished upon request to the S ecretary's O ffice o f this Bank, Ext. 6267. Sincerely yours, Robert H. Boykin 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) B OARD OF GOVERNORS o f the F E D E R A L RESERVE SYSTEM ELECTRONIC FUND TRANSFERS REGULATION E (12 CFR 205) Effective March 30, 1979 as amended effective May 10, 1980 CONTENTS Sec. 2 0 5 .!— A u th o rity , P urpose, a n d S c o p e ................................................................................................................................. S e c . 2 0 5 . 2 — D e f i n i t i o n s a n d R u l e s o f C o n s t r u c t i o n ............................................................................................................ S e c . 2 0 5 . 3 — E x e m p t i o n s .................................................................................................................................................................................. S e c . 2 0 5 . 4 — S p e c i a l R e q u i r e m e n t s ........................................................................................................................................................ S e c . 2 0 5 . 5 — I s s u a n c e o f A c c e s s D e v i c e s .................................................. ....................................................................................... S e c . 2 0 5 . 6 — L i a b i l i t y o f C o n s u m e r f o r U n a u t h o r i z e d T r a n s f e r s ............................................................................... S e c . 2 0 5 . 7 — I n i t i a i D i s c l o s u r e o f T e r m s a n d C o n d i t i o n s ................................................................................................ S e c . 2 0 5 . 8 — C h a n g e in T e r m s ; E r r o r R e s o l u t i o n N o t i c e ................................................................................................... S e c . 2 0 5 . 9 — D o c u m e n t a t i o n o f T r a n s f i :r s .................................................................................................................................... S e c . 2 0 5 . 1 0 — P r e a u t h o r i z e d T r a n s f e r s ............................................................................................................................................. S e c . 2 0 5 . 1 1— P r o c e d u r e s f o r R e s o l v i n g E r r o r s ........................................................................................................................ S e c . 2 0 5 . 1 2 — R e l a t i o n t o S t a t e L a w ............................................................................................................................................... S e c . 2 0 5 . 1 3 — A d m i n i s t r a t i v e E n f o r c e m e n t .................................................................................................................................... S e c . 2 0 5 . 1 4 — S e r v ic e s O f f e r e d by F in a n c ia l In s t it u t io n s not H o l d in g C o n s u m e r ' s A c c o u n t .................................................................................................................. S t a t u t o r y A p p e n d i x ........................................................................................................................................................................................... A p e n d i x A — M o d e l D i s c l o s u r e C l a u s e s ............................................................................................................................................ A p p e n d i x B — F e d e r a l E n f o r c e m e n t A g e n c i e s ............... ............................................................................................................... STATUTORY AUTHORITY This regulation is issued under provisions of section 9 0 4 of the Electronic Fund Transfer Act, U.S.C., Title 1 5 , sec. 1 6 9 3 b et seq. REGULATION E (12 CFR 205) ELECTRONIC FUND TRANSFERS SECTION 205.1— AUTHORITY, PURPOSE, A N D SCOPE the purpose of transferring money between accounts or obtaining money, property, labor, or services; (ii) Requests validation of an access device (a) Authority. This regulation, issued by the issued on an unsolicited basis; or Board of Governors of the Federal Reserve System, (iii) Receives an access device issued in re implements Title IX (Electronic Fund Transfer Act) newal of, or in substitution for, an accepted access of the Consumer Credit Protection Act, as amended device, whether such access device is issued by the (15 U.S.C. 1601 et seq.). initial financial institution or a successor. (b) Purpose and Scope. In November 1978, the (b) “Account” means a demand deposit (check Congress enacted the Electronic Fund Transfer Act. ing), savings, or other consumer asset account The Congress found that the use of electronic sys (other than an occasional or incidental credit bal tems to transfer funds provides the potential for ance in a credit plan) held either directly or in substantial benefits to consumers, but that the uni directly by a financial institution and established que characteristics of these systems make the appli primarily for personal, family, or household pur cation of existing consumer protection laws unclear, poses. leaving the rights and liabilities of users of electronic (c) “Act” means the Electronic Fund Transfer fund transfer systems undefined. The Act establishes Act (Title IX of the Consumer Credit Protection the basic rights, liabilities, and responsibilities of Act, 15 U.S.C. 1601 et seq.). consumers who use electronic money transfer ser (d) “Business day” means any day on which the vices and of financial institutions that offer these offices of the consumer’s financial institution are services. This regulation is intended to carry out the open to the public for carrying on substantially all purposes of the Act, including, primarily, the protec business functions. tion of individual consumers engaging in electronic (e) “Consumer” means a natural person. transfers. Except as otherwise provided, this regula (f) “Credit” means the right granted by a finan tion applies to all persons who are financial institu cial institution to a consumer to defer payment of tions as defined in § 205.2(i). debt, incur debt and defer its payment, or purchase property or services and defer payment therefor. SECTION 205.2— DEFINITIONS AND (g) “Electronic fund transfer” means any trans RULES OF CONSTRUCTION fer of funds, other than a transaction originated by check, draft, or similar paper instrument, that is in For the purposes of this regulation, the following itiated through an electronic terminal, telephone, or definitions and rules of construction apply, unless computer or magnetic tape for the purpose of order the context indicates otherwise: ing, instructing, or authorizing a financial institu (a)(1) “Access device” means a card, code, or tion to debit or credit an account. The term in other means of access to a consumer’s account, or cludes, but is not limited to, point-of-sale transfers, any combination thereof, that may be used by the automated teller machine transfers, direct deposits consumer for the purpose of initiating electronic or withdrawals of funds, and transfers initiated by fund transfers. (2) An access device becomes an “acceptedtelephone. The term does not include payments made by check, draft, or similar paper instrument access device’’when the consumer to whom the ac at an electronic terminal. cess device was issued: (i) Requests and receives, or signs, or uses, (h) “Electronic terminal” means an electronic or authorizes another to use, the access device for device, other than a telephone operated by a con- § 2 0 5 .2 R E G U L A T IO N E sumer, through which a consumer may initiate an electronic fund transfer. The term includes, but is not limited to, point-of-sale terminals, automated teller machines, and cash dispensing machines. (i) “Financial institution” means a State or Na tional bank, a State or Federal savings and loan association, a State or Federal mutual savings bank, a State or Federal credit union, or any other person who, directly or indirectly, holds an account be longing to a consumer. The term also includes any person who issues an access device and agrees with a consumer to provide electronic fund transfer ser vices. (j) “Preauthorized electronic fund transfer” means anelectronicfundtransferauthorizedinadvance to recur at substantially regular intervals. (k) “State” means any State, territory or posses sion of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any political subdivision of any of the above. (1) “Unauthorized electronic fund transfer” means an electronic fund transfer from a consum er’s account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit. The term does not include any electronic fund transfer (1) initiated by a person who was fur nished with the access device to the consumer’s account by the consumer, unless the consumer has notified the financial institution involved that trans fers by that person are no longer authorized, (2) initiated with fraudulent intent by the consumer or any person acting in concert with the consumer, or (3) that is initiated by the financial institution or its employee. (m) Footnotes have the same legal effect as the text of the regulation. SECTION 205.3— EXEMPTIONS The Act and this regulation do not apply to the following: (a) Check guarantee or authorization services. Any service that guarantees payment or authorizes acceptance of a check, draft, or similar paper in strument and that does not directly result in a debit or credit to a consumer’s account. (b) Wire transfers. Any wire transfer of funds for a consumer through the Federal Reserve Com munications System or other similar network that is used primarily for transfers between financial insti tutions or between businesses. (c) Certain securities or commodities trans fers. Any transfer the primary purpose of which is the purchase or sale of securities or commodities regulated by the Securities and Exchange Commis sion or the Commodity Futures Trading Commis sion. (d) Certain automatic transfers. Any transfer under an agreement between a consumer and a financial institution which provides that the institu tion will initiate individual transfers without a spe cific request from the consumer (1) Between a consumer’s accounts within the financial institution, such as a transfer from a checking account to a savings account; (2) Into a consumer’s account by the financial institution, such as the crediting of interest to a sav ings account (except that the financial institution is subject to §§ 913(2), 915, and 916 of the Act); or (3) From a consumer’s account to an account of the financial institution, such as a loan payment (except that the financial institution is subject to §§ 913(1), 915, and 916 of the Act). (e) Certain telephone-initiated transfers. Any transfer of funds that (1) is initiated by a telephone conversation between a consumer and an officer or employee of a financial institution and (2) is not under a telephone bill-payment or other prearranged plan or agreement in which periodic or recurring transfers are contemplated. (f) Trust accounts. Any trust account held by a financial institution under a bona fide trust agree ment. SECTION 205.4— SPECIAL REQUIREMENTS (a) Services offered by two or more Financial institutions. Two or more financial institutions that jointly provide electronic fund transfer services may contract among themselves to comply with the re quirements that this regulation imposes on any or all of them. When making disclosures under §§ 205.7 and 205.8, a financial institution that pro vides electronic fund transfer services under an agreement with other financial institutions need make only those disclosures which are within its knowledge and the purview of its relationship with the consumer for whom it holds an account. REGULATION E. § 205.4 (1) The access device is not validated; (2) The distribution is accompanied by a com (1) If a consumer holds two or more accounts plete disclosure, in accordance with § 205.7(a), of at a financial institution, the institution may com the consumer’s rights and liabilities that will apply bine the disclosures required by the regulation into if the access device is validated; one statement (for example, the financial institution (3) The distribution is accompanied by a clear may mail or deliver a single periodic statement or explanation that the access device is not validated annual error resolution notice to a consumer for and how the consumer may dispose of the access multiple accounts held by that consumer at that in device if validation is not desired; and stitution). (4) The access device is validated only in re (2) If two or more consumers hold a joint sponse to the consumer’s oral or written request or account from or to which electronic fund transfers application for validation and after verification of can be made, the financial institution need provide the consumer’s identity by any reasonable means, only one set of the disclosures required by the reg such as by photograph, fingerprint, personal visit, ulation for each account. or signature comparison. (c) Additional information; disclosures re An access device is considered validated when a quired by other laws. At the financial institution’s financial institution has performed all procedures option, additional information or disclosures re necessary to enable a consumer to use it to initiate quired by other laws (for example, Truth in Lend an electronic fund transfer. ing disclosures) may be combined with the disclo (c) Relation to Truth in Lending. (1) The Act sures required by this regulation. and this regulation govern; (i) Issuance of access devices; SECTION 205.5— ISSUANCE (ii) Addition to an accepted credit card, as OF ACCESS DEVICES defined in 12 CFR 226.2(a) (Regulation Z), of the (a) General rule. A financial institution may capability to initiate electronic fund transfers; and issue an access device to a consumer only: (iii) Issuance of access devices that permit (1) In response to an oral or written request or credit extensions only under a preexisting agree application for the device;1 or ment between a consumer and a financial institution (2) As a renewal of, or in substitution for, an to extend the credit when the consumer’s account is accepted access device, whether issued by the ini overdrawn or to maintain a specified minimum tial financial institution or a successor. balance in the consumer’s account. (3) As a renewal of, or in substitution for, an (2) The Truth in Lending Act (15 U.S.C. 1601 access device issued before February 8, 1979 (other et seq.) and 12 CFR Part 226 (Regulation Z), than an accepted access device, which can be re which prohibit the unsolicited issuance of credit newed or substituted under paragraph (a)(2) of this cards, govern section), provided that the disclosures set forth in (i) Issuance of credit cards as defined in 12 §§ 205.7(a)(1), (2), and (3) accompany the renewal CFR 226.2(r); or substitute device; except .that for a renewal or (ii) Addition of a credit feature to an substitution that occurs before July 1, 1979, the accepted access device; and disclosures may be sent within a reasonable time (iii) Issuance of credit cards that are also ac after the renewal or substitute device is issued. cess devices, except as provided in paragraph (b) Exception. Notwithstanding the provisions of (c)(l)(iii) of this section. paragraph (a)(1) of this section, a financial institu tion may distribute an access device to a consumer SECTION 205.6— LIABILITY OF CONSUMER on an unsolicited basis if: FOR UNAUTHORIZED TRANSFERS (b) Multiple accounts and account holders. 1 In the case o f a joint account, a financial institution may issue an access device to each account holder for whom the requesting holder specifically requests an ac cess device. (a) General rule. A consumer is liable, within the limitations described in paragraph (b) of this section, for unauthorized electronic fund transfers involving the consumer’s account only if: § 205.6 (1) The access device used for the unauthorized transfers is an accepted access device; (2) The financial institution has provided a means (such as by signature, photograph, finger print, or electronic or mechanical confirmation) to identify the consumer to whom the access device was issued; and (3) The financial institution has provided the following information, in writing, to the consumer: (i) A summary of the consumer’s liability under this section, or under other applicable law or agreement, for unauthorized electronic fund trans fers and, at the financial institution’s option, notice of the advisability of promptly reporting loss or theft of the access device or unauthorized transfers. (ii) The telephone number and address of the person or office to be notified in the event the consumer believes that an unauthorized electronic fund transfer has been or may be made. (iii) The financial institution’s business days, as determined under § 205.2(d), unless ap plicable State law or an agreement between the consumer and the financial institution sets a liability limit not greater than $50. (b) Limitations on amount of liability. The amount of a consumer’s liability for an unauthor ized electronic fund transfer or a series of related unauthorized transfers shall not exceed $50 or the amount of unauthorized transfers that occur before notice to the financial institution under paragraph (c) of this section, whichever is less, unless one or both of the following exceptions apply: (1) If the consumer fails to notify the financial institution within 2 business days after learning of the loss or theft of the access device, the consum er’s liability shall not exceed the lesser of $500 or the sum of (i) $50 or the amount of unauthorized elec tronic fund transfers that occur before the close of the 2 business days, whichever is less, and (ii) The amount of unauthorized electronic fund transfers that the financial institution estab lishes would not have occurred but for the failure of the consumer to notify the institution within 2 business days after the consumer learns of the loss or theft of the access device, and that occur after the close of 2 business days and before notice to the financial institution. (2) If the consumer fails to report within 60 days of transmittal of the periodic statement any REGULATION E unauthorized electronic fund transfer that appears on the statement, the consumer’s liability shall not exceed the sum of (i) The lesser of $50 or the amount of unau thorized electronic fund transfers that appear on the periodic statement or that occur during the 60-day period, and (ii) The amount of unauthorized electronic fund transfers that occur after the close of the 60 days and before notice to the financial institution and that the financial institution establishes would not have occurred but for the failure of the consum er to notify the financial institution within that time. (3) Paragraphs (b)(1) and (2) of this section may both apply in some circumstances. Paragraph (b)(1) shall determine the consumer’s liability for any unauthorized transfers that appear on the periodic statement and occur before the close of the 60-day period, and paragraph (b)(2)(ii) shall deter mine liability for transfers that occur after the close of the 60-day period. (4) If a delay in notifying the financial institu tion was due to extenuating circumstances, such as extended travel or hospitalization, the time periods specified above shall be extended to a reasonable time. (5) If applicable State law or an agreement be tween the consumer and financial institution im poses lesser liability than that provided in paragraph (b) of this section, the consumer’s liability shall not exceed that imposed under that law or agreement. (c) Notice to financial institution. For purposes of this section, notice to a financial institution is given when a consumer takes such steps as are reasonably necessary to provide the financial insti tution with the pertinent information, whether or not any particular officer, employee, or agent of the financial institution does in fact receive the infor mation. Notice may be given to the financial insti tution, at the consumer’s option, in person, by tele phone, or in writing. Notice in writing is consid ered given at the time the consumer deposits the notice in the mail or delivers the notice for trans mission by any other usual means to the financial institution. Notice is also considered given when the financial institution becomes aware of circum stances that lead to the reasonable belief that an un authorized electronic fund transfer involving the consumer’s account has been or may be made. § 205.6 REGULATION E (6) A summary of the consumer’s right to re (d) Relation to Truth in Lending. (1) A con ceive documentation of electronic fund transfers, as sumer’s liability for an unauthorized electronic fund provided in §§ 205.9, 205.10(a), and 205.10(d). transfer shall be determined solely in accordance (7) A summary of the consumer’s right to stop with this section if the electronic fund transfer payment of a preauthorized electronic fund transfer (i) Was initiated by use of an access device and the procedure for initiating a stop-payment that is also a credit card as defined in 12 CFR order, as provided in § 205.10(c). 226.2(r), or (8) A summary of the financial institution’s (ii) Involves an extension of credit under an agreement between a consumer and a financial in liability to the consumer for its failure to make or stitution to extend the credit when the consumer’s to stop certain transfers under § 910 of the Act. (9) The circumstances under which the finan account is overdrawn or to maintain a specified cial institution in the ordinary course of business minimum balance in the consumer’s account. will disclose information to third parties concerning (2) A consumer’s liability for unauthorized use the consumer’s account. of a credit card that is also an access device but (10) A notice that is substantially similar to the that does not involve an electronic fund transfer following notice concerning error resolution proce shall be determined solely in accordance with the Truth in Lending Act and 12 CFR Part 226 (Reg dures and the consumer’s rights under them: ulation Z). SECTION 205.7— INITIAL DISCLOSURE OF TERMS A N D CONDITIONS (a) Content of disclosures. At the time a con sumer contracts for an electronic fund transfer ser vice or before the first electronic fund transfer is made involving a consumer’s account, a financial institution shall disclose to the consumer, in a readily understandable written statement that the consumer may retain, the following terms and con ditions of the electronic fund transfer service, as applicable: (1) A summary of the consumer’s liability under § 205.6, or other applicable law or agree ment, for unauthorized electronic fund transfers and, at the financial institution’s option, the advisa bility of promptly reporting loss or theft of the ac cess device or unauthorized transfers. (2) The telephone number and address of the person or office to be notified when the consumer believes that an unauthorized electronic fund trans fer has been or may be made. (3) The financial institution’s business days, as determined under § 205.2(d). (4) The type of electronic fund transfers that the consumer may make and any limitations on the frequency and dollar amount of transfers. The de tails of the limitations need not be disclosed if their confidentiality is essential to maintain the security of the electronic fund transfer system. (5) Any charges for electronic fund transfers or for the right to make transfers. In C a s e o f E r r o r s o r Q u e s tio n s A b o u t Y o u r E lec tro n ic T ran sfers Telephone us at [insert telephone number] or Write us at [insert address] as soon as you can, if you think your statement or receipt is wrong or if you need more information about a transfer listed on the statement or receipt. We must hear from you no later than 60 days after we sent the FIRST statement on which the problem or error appeared. (1) Tell us your name and account number (if any). (2) Describe the error or the transfer you are unsure about, and explain as clearly as you can why you believe it is an error or why you need more information. (3) Tell us the dollar amount of the suspected error. If you tell us orally, we may require that you send us your complaint or question in writing with in 10 business days. We will tell you the results of our investigation within 10 business days after we hear from you and will correct any error promptly. If we need more time, however, we may take up to 45 days to in vestigate your complaint or question. If we decide to do this, we will recredit your account within 10 business days for the amount you think is in error, so that you will have the use of the money during the time ittakes us to complete our investigation. If REGULATION E § 2 0 5 .7 we ask you to put your complaint or question in writing and we do not receive it within 10 business days, we may not recredit your account. If we decide that there was no error, we will send you a written explanation within 3 business days after we finish our investigation. You may ask for copies of the documents that we used in our investigation. (b) Timing of disclosures for accounts in exist ence on M a y 10, 1980. A financial institution shall mail or deliver to the consumer the information re quired by paragraph (a) of this section on or before June 9, 1980, or with the first periodic statement required by § 205.9(b) after May 10, 1980, whichever is earlier, for any account that is open on May 10, 1980, and (1) From or to which electronic fund transfers were made prior to May 10, 1980; (2) With respect to which a contract for such transfers was entered into between a consumer and a financial institution; or (3) For which an access device was issued to a consumer. SECTION 205.8— CHANGE IN TERMS; ERROR RESOLUTION NOTICE (a) Change in terms. A financial institution shall mail or deliver a written notice to the consumer at least 21 days before the effective date of any change in a term or condition required to be dis closed under § 205.7(a) if the change would result in increased fees or charges, increased liability for the consumer, fewer types of available electronic fund transfers, or stricter limitations on the frequen cy or dollar amounts of transfers. Prior notice need not be given where an immediate change in terms or conditions is necessary to maintain or restore the security of an electronic fund transfer system or account. However, if such a change is to be made permanent, the financial institution shall provide written notice of the change to the consumer on or with the next regularly scheduled periodic statement or within 30 days, unless disclosure would jeopard ize the security of the system or account. (b) Error resolution notice. For each account from or to which electronic fund transfers can be made, a financial institution shall mail or deliver to the consumer, at least once each calendar year, the notice set forth in § 205.7(a)(10). Alternatively, a financial institution may mail or deliver a notice that is substantially similar to the following notice on or with each periodic statement required by § 205.9(b): I n C a s e o f E r r o r s o r Q u e s tio n s A b o u t Y o u r E le c t r o n ic T r a n s fe r s Telephone us at [insert telephone number] or Write us at [insert address] as soon as you can, if you think your statement or receipt is wrong or if you need more information about a transfer on the statement or receipt. We must hear from you no later than 60 days after we sent you the FIRST statement on which the error or problem appeared. (1) Tell us your name and account number (if any). (2) Describe the error or the transfer you are unsure about, and explain as clearly as you can why you believe there is an error or why you need more information. (3) Tell us the dollar amount of the suspected error. We will investigate your complaint and will cor rect any error promptly. If we take more than 10 business days to do this, we will recredit your account for the amount you think is in error, so that you will have use of the money during the time it takes us to complete our investigation. SECTION 205.9— DOCUMENTATION OF TRANSFERS (a) Receipts at electronic terminals. At the time an electronic fund transfer is initiated at an electronic terminal by a consumer, the financial in stitution shall make available2 to the consumer a written receipt of the transfer(s) that clearly sets forth the following information, as applicable: (1) The amount of the transfer. A charge for the transfer may be included in this amount if the terminal is owned or operated by a person other than the financial institution holding the consumer’s account, provided the amount of the charge is dis 2 A financial institution may arrange for a third party, such as a merchant, to make the receipt available. REGULATION E § 2 0 5 .9 that charge may be included in the amount of the closed on the receipt and on a sign posted on or at the terminal. transfer. (ii) The date the transfer was credited or de (2) The calendar date the consumer initiated the transfer. bited to the consumer’s account. (iii) The type of transfer and the type of the (3) The type of transfer and the type of the consumer’s accounts) to or from which funds were consumer’s account(s)3 to or from which funds are transferred, such as “withdrawal from checking,” transferred. (iv) For each transfer initiated by the con “transfer from savings to checking,” or “payment from savings.” These descriptions may be used for sumer at an electronic terminal, the location that appeared on the receipt or, ifan identification (such transfers to or from accounts that are similar in as a code or terminal number) was used, that iden function to checking accounts (such as share draft tification and one of the following descriptions of or negotiable order of withdrawal accounts) or to savings accounts (such as share accounts). Codes the terminal’s location: (A) The address, including number and may be used only if they are explained elsewhere street (the number may be omitted if the street on the receipt. alone uniquely identifies the terminal location) or (4) A number or code that uniquely identifies the consumer initiating the transfer, the consumer’s intersection, city, and state or foreign country;5 (B) A generally accepted name for a spe account(s), or the access device used to initiate the cific location (such as a branch of the financial in transfer. stitution, a shopping center, or an airport), city, (5) The location (in a form prescribed by para graph (b)(l)(iv) of this section) of the terminal at and state or foreign country;6 or (C) The name of the entity at whose place which the transfer was initiated or an identification of business the terminal is located or which owns (such as a code or terminal number). or operates the terminal (such as the financial insti (6) The name of any third party to or from tution7 or the seller of goods or services), city, and whom funds are transferred; a code may be used only if it is explained elsewhere on the receipt. state or foreign country.8 (v) The name of any third party to or from This requirement does not apply if the name is pro whom funds were transferred.5 If the transfer was vided by the consumer in a form that the electronic initiated by the consumer at an electronic terminal terminal cannot duplicate on the receipt. (b) Periodic statements. For any account to or and a code was used on the receipt to identify the third party, the statement shall include the code and from which electronic fund transfers can be made, the financial institution shall mail or deliver a state the name of the third party. (2) The number(s) of the consumer’s ment for each monthly or shorter cycle in which an electronic fund transfer has occurred, but at least a account(s) for which the statement is issued. quarterly statement if no transfer has occurred. The statement shall include the following, as applicable: 5 The city and state may be omitted if all the terminals (1) For each electronic fund transfer occurringowned or operated by the financial institution providing the statement (or by the system in which it participates) during the cycle,4 (i) The amount of the transfer. If a transfeare r located in the same city. The state may be omitted if all the terminals owned or operated by the financial insti charge was added at the time of initiation by the tution providing the statement (or by the system in which owner or operator of an electronic terminal in it participates) are located in that state. accordance with paragraph (a)(1) of this section, 6 See footnote 5. 3 If more than one account of the same type may be accessed by a single access device, the accounts must be uniquely identified. 4 The information required by paragraph (b)(1) of this section may be provided on accompanying documents. Codes explained on the statement or on accompanying documents are acceptable. 7 If the financial institution providing the statement owns or operates terminals at more than one location, it shall describe the location of its electronic terminals by use of paragraphs (b)(l)(iv)(A ) or (B) o f this section. 8 See footnote 5. 9 A financial institution need not identify third parties whose names appear on checks, drafts, or similar paper instruments deposited to the consum er’s account at an electronic terminal. § 2 0 5 .9 (3) The total amount of any fees or charges, other than a finance charge under 12 CFR 226.7(b)(l)(iv), assessed against the account during the statement period for electronic fund transfers or for the right to make such transfers. (4) The balances in the consumer’s account(s) at the beginning and at the close of the statement period. (5) The address and telephone number to be used for inquiry or notice of errors, preceded by “Direct Inquiries To:” or similar language. Alter natively, the address and telephone number may be provided on the notice of error resolution proce dures set forth in § 205.8(b). (6) If the financial institution uses the notice procedure set forth in § 205.10(a)(l)(iii), the tele phone number the consumer may call to ascertain whether a preauthorized transfer to the consumer’s account has occurred. (c) Documentation for certain passbook accounts. In the case of a consumer’s passbook account which may not be accessed by any electron ic fund transfers other than preauthorized transfers to the account, the financial institution may, in lieu of complying with paragraph (b) of this section, upon presentation of the consumer’s passbook, pro vide the consumer with documentation by entering in the passbook or on a separate document the amount and date of each electronic fund transfer made since the passbook was last presented. (d) Periodic statements for certain n o n passbook accounts. If a consumer’s account other than a passbook account may not be accessed by any electronic fund transfers other than preauthor ized transfers to the account, the financial institu tion need provide the periodic statement required by paragraph (b) of this section only quarterly. (e) Use of abbreviations. A financial institution may use commonly accepted or readily understand able abbreviations in complying with the documen tation requirements of this section. REGULATION E been initiated, the financial institution shall provide notice by one of the following means: (i) The institution shall transmit oral or writ ten notice to the consumer, within 2 business days after the transfer, that the transfer occurred; (ii) The institution shall transmit oral or written notice to the consumer, within 2 business days after the date on which the transfer was sched uled to occur, that the transfer did not occur; or (iii) The institution shall provide a readily available telephone line that the consumer may call to ascertain whether or not the transfer occurred, and shall disclose the telephone number on the ini tial disclosures required by § 205.7 and on each periodic statement. (2) A financial institution that receives a preauthorized transfer of the type described in para graph (a)(1) of this section shall credit the amount of the transfer as of the day the funds for the trans fer are received. (b) Preauthorized transfers from a consumer’s account; written authorization. Preauthorized electronic fund transfers from a consumer’s account may be authorized by the consumer only in writing, and a copy of the authorization shall be provided to the consumer by the party that obtains the author ization from the consumer. (c) Consumer’s right to stop payment. A con sumer may stop payment of a preauthorized elec tronic fund transfer from the consumer’s account by notifying the financial institution orally or in writ ing at any time up to 3 business days before the scheduled date of the transfer. The financial institu tion may require written confirmation of the stoppayment order to be made within 14 days of an oral notification if, when the oral notification is made, the requirement is disclosed to the consumer together with the address to which confirmation should be sent. If written confirmation has been re quired by the financial institution, the oral stoppayment order shall cease to be binding 14 days after it has been made. SECTION 205.10— PREAUTHORIZED (d) Notice of transfers varying in amount. TRANSFERS Where a preauthorized electronic fund transfer from (a) Preauthorized transfers to a consumer’s the consumer’s account varies in amount from the account. (1) Where a consumer’s account is sched previous transfer relating to the same authorization, uled to be credited by a preauthorized electronic or the preauthorized amount, the financial institu fund transfer from the same payor at least once ev tion or the designated payee shall mail or deliver, ery 60 days, except where the payor provides posi at least 10 days before the scheduled transfer date, tive notice to the consumer that the transfer has a written notice of the amount and scheduled date REGULATON E of the transfer. If the financial institution or desig nated payee informs the consumer of the right to receive notice of all varying transfers, the consumer may elect to receive notice only when a transfer does not fall within a specified range of amounts or, alternatively, only when a transfer differs from the most recent transfer by more than an agreedupon amount. § 2 0 5 .1 0 (A) Transmitted a periodic statement or provided documentation under § 205.9(c) on which the alleged error is first reflected; or (B) Transmitted additional information, clarification, or documentation described in para graph (a)(7) of this section that was initially re quested in accordance with paragraph (b)(l)(i)(A) of this section; (ii) Enables the financial institution to iden SECTION 205.11— PROCEDURES FOR tify the consumer’s name and account number; and RESOLVING ERRORS (iii) Except for errors described in paragraph (a)(7) of this section, indicates the consumer’s be (a) Definition of error. For purposes of this sec lief, and the reasons for that belief, that an error tion, the term “error” means: exists in the consumer’s account or is reflected on (1) An unauthorized electronic fund transfer; documentation required by §§ 205.9 or 205.10(a), (2) An incorrect electronic fund transfer to or and indicates to the extent possible the type, the from the consumer’s account; date, and the amount of the error. (3) The omission from a periodic statement of (2) A financial institution may require a written an electronic fund transfer to or from the consum confirmation to be received within 10 business days er’s account that should have been included; of an oral notice if, when the oral notice is given, (4) A computational or bookkeeping error the consumer is advised of the requirement and of made by the financial institution relating to an elec the address to which confirmation must be sent. tronic fund transfer; (c) Investigation of errors. (1) After receiving a (5) The consumer’s receipt of an incorrect n otice of an error, the financial institution shall amount of money from an electronic terminal; promptly investigate the alleged error, determine (6) An electronic fund transfer not identified in whether an error occurred, and transmit the results accordance with the requirements of §§ 205.9 or of its investigation and determination to the con 205.10(a); or sumer within 10 business days. (7) A consumer’s request for any documenta (2) As an alternative to the 10-business-day re tion required by §§ 205.9 or 205.10(a), or for addi quirement of paragraph (c)(1) of this section, the tional information or clarification concerning an financial institution shall investigate the alleged electronic fund transfer. This includes any request error and determine whether an error occurred, for documentation, information, or clarification in order to assert an error within the meaning of para promptly but in no event later than 45 calendar days after receiving a notice of an error, and shall graphs (a)(1) through (6) of this section. It does not transmit the results of its investigation and determi include a routine inquiry about the balance in the nation to the consumer, provided consumer’s account or a request for duplicate (i) The financial institution provisionally re copies of documentation or other information that is credits the consumer’s account in the amount of the made only for tax or other record-keeping purposes. alleged error (including interest where applicable) (b) Notice of error from consumer. (1) A within 10 business days after receiving the notice of notice of an error is an oral or written notice from error. If the financial institution has a reasonable the consumer that bn a1 s0is for believing that an unauthorized electronic (i) Is received by the financial institutio fund transfer may have occurred and that it has no later than 60 days after the institution satisfied the requirements of § 205.6(a), it may 10 A financial institution may require the consumer to withhold a maximum of $50 from the amount re give notice only at the telephone number or address dis credited; closed by the institution, provided the institution main (ii) The financial institution, promptly but tains reasonable procedures to refer the consumer to the no later than 2 business days after the provisional specified telephone number or address if the consumer recrediting, orally reports or mails or delivers attempts to give notice to the institution in a different manner. notice to the consumer of the amount and date of §205.11 the recrediting and of the fact that the consumer will have full use of the funds pending the determi nation of whether an error occurred; (iii) The financial institution gives the con sumer full use of the funds provisionally recredited during the investigation; and (iv) If the financial institution determines that no error occurred and debits the account, the institution gives notice of the debiting and con tinues to honor certain items as required by para graph (f)(2) of this section. (3) A financial institution that requires but does not receive timely written confirmation of oral notice of an error shall comply with all require ments of this section except that it need not provi sionally recredit the consumer’s account. (d) Extent of required investigation. (1) A financial institution complies with its duty to inves tigate, correct, and report its determination regard ing an error described in paragraph (a)(7) of this section by transmitting the requested information, clarification, or documentation within the time limits set forth in paragraph (c) of this section. If the institution has provisionally recredited the con sumer’s account in accordance with paragraph (c)(2) of this section, it may debit the amount upon transmitting the requested information, clarification, or documentation. (2) Except in the case of services covered by § 205.14, a financial institution’s review of its own records regarding an alleged error will satisfy its investigation responsibilities under paragraph (c) of this section if the alleged error concerns a transfer to or from a third party and there is no agreement between the financial institution and the third par ty" regarding the type of electronic fund transfer alleged in the error. (3) A financial institution may make, without investigation, a final correction to a consumer’s account in the amount or manner alleged by the REGULATION E consumer to be in error, but must comply with all other applicable requirements of this section. (e) Procedures after financial institution deter mines that error occurred. If the financial institu tion determines that an error occurred, it shall (1) Promptly, but no later than 1 business day after its determination, correct the error (subject to the liability provisions of §§ 205.6(tt) and (b)), in cluding, where applicable, the crediting of interest and the refunding of any fees or charges imposed, and (2) Promptly, but in any event within the 10business-day or 45-day time limits, orally report or mail or deliver to the consumer notice of the cor rection and, if applicable, notice that a provisional credit has been made final.12 (f) Procedures after financial institution deter mines that no error occurred. If the financial in stitution determines that no error occurred or that an error occurred in a different manner or amount from that described by the consumer, (1) The financial institution shall mail or deliv er to the consumer a written explanation of its find ings within 3 business days after concluding its in vestigation, but in no event later than 10 business days after receiving notice of the error ifthe institu tion is proceeding under paragraph (c)(1) of this section. The explanation shall include notice of the consumer’s right to request the documents upon which the institution relied in making its determina tion. (2) Upon debiting a provisionally recredited amount, the financial institution (i) Shall orally report or mail or deliver notice to the consumer of the date and amount of the debiting and the fact that the financial institu tion will honor checks, drafts, or similar paper in struments payable to third parties and preauthorized transfers from the consumer’s account (using the provisionally recredited funds) for 5 business days after transmittal of the notice. (ii) Shall honor checks, drafts, or similar paper instruments payable to third parties and preauthorized transfers from the consumer’s account (without charge to the consumer as a result of an 11 Institutions do not have an agreement for purposes of paragraph (d)(2) o f this section solely because they parti cipate in transactions under the federal recurring payments program, or that are cleared through an automated or other clearing house or similar arrangement for the clear ing and settlement o f fund transfers generally, or because 12 This notice requirement may be satisfied by a notice they agree to be bound by the rules of such arrangements. on a periodic statement that is mailed or delivered within An agreement that a third party will honor an access de the 10-business-day or 45-day time limits and that clearly vice is an agreement for purposes of this paragraph. identifies the correction to the consum er’s account. R EGU LATON E § 205.11 in determining whether a state law, or a provision overdraft) for 5 business days after transmittal of of that law, is inconsistent with the Act and this the notice. The institution need only honor items regulation. Inconsistency may exist when state law that it would have paid if the provisionally recre (1) Requires or permits a practice or act pro dited funds had not been debited. (3) Upon the consumer’s request, the financialhibited by the Act or this regulation; (2) Provides for consumer liability for unau institution shall promptly mail or deliver to the con thorized electronic fund transfers which exceeds sumer copies of the documents on which itrelied in that imposed by the Act and this regulation; making its determination. (3) Provides for longer time periods than the (g) Withdrawal of notice of error. The finan cial institution has no further error resolution re Act and this regulation for investigation and correc tion of errors alleged by a consumer, or fails to sponsibilities as to a consumer’s assertion of an provide for the recrediting of the consumer’s error if the consumer concludes that no error did in account during the institution’s investigation of fact occur and voluntarily withdraws the notice. errors as set forth in § 205.11(c); or (h) Reassertion of error. A financial institution (4) Provides for initial disclosures, periodic that has fully complied with the requirements of statements, or receipts that are different in content this section with respect to an error has no further from that required by the Act and this regulation responsibilities under this section if the consumer except to the extent that the disclosures relate to subsequently reasserts the same error, regardless of rights granted to consumers by the state law and the manner in which it is reasserted. This paragraph not by the Act or this regulation. does not preclude the assertion of an error defined in paragraphs (a)(1) through (6) of this section fol (c) Procedures for preemption. Any request for lowing the assertion of an error described in para a determination shall include the following: graph (a)(7) of this section regarding the same elec (1) A copy of the full text of the state law in tronic fund transfer. question, including any regulatory implementation (i) Relation to Truth in Lending. Where an or judicial interpretation of that law; electronic fund transfer also involves an extension (2) A comparison of the provisions of state of credit under an agreement between a consumer law with the corresponding provisions in the Act and a financial institution to extend credit when the and this regulation, together with a discussion of consumer’s account is overdrawn or to maintain a reasons why specific provisions of state law are specified minimum balance in the consumer’s either consistent or inconsistent with corresponding account, the financial institution shall comply with sections of the Act and this regulation; and the requirements of this section rather than those of (3) A comparison of the civil and criminal lia 12 CFR 226.2(j), 226.2(cc), and 226.14(a) gov bility for violation of state law with the provisions erning error resolution. of §§ 915 and 916(a) of the Act. SECTION 205.12— RELATION TO STATE LAW (a) Preemption of inconsistent state laws. The Board shall determine, upon the request of any state, financial institution, or other interested party, whether the Act and this regulation preempt state laws relating to electronic fund transfers. Only those state laws that are inconsistent with the Act and this regulation shall be preempted and then only to the extent of the inconsistency. A state law is not inconsistent with the Act and this regulation if it is more protective of a consumer. (b) Standards for preemption. The following are examples of the standards the Board will apply (d) Exemption for state-regulated transfers. (1) Any state may apply to the Board for an ex emption from the requirements of the Act and the corresponding provisions of this regulation for any class of electronic fund transfers within the state. The Board will grant such an exemption if the Board determines that (i) Under the law of the state that class of electronic fund transfers is subject to requirements substantially similar to those imposed by the Act and the corresponding provisions of this regulation, and (ii) There is adequate provision for state en forcement. (2) To assure that the federal and state courts § 2 0 5 .1 2 will continue to have concurrent jurisdiction, and to aid in implementing the Act: (i) No exemption shall extend to the civil liability provisions of § 915 of the Act; and (ii) After an exemption has been granted, for the purposes of § 915 of the Act, the require ments of the applicable state law shall constitute the requirements of the Act and this regulation, except to the extent the state law imposes requirements not imposed by the Act or this regulation. REGULATON E appropriate, the interpretation will be published in the Federal Register to become effective 30 days after the publication date. Ifa request for public comment isreceived, the effective date will be suspended. The interpretation will then be republished in the Federal Register and the public given an opportunity to com ment. Any official staff interpretation issued after opportunity for public comment shall become effec tive upon publication in the Federal Register. (3) Any request for public comment on an offi cial staff interpretation of this regulation shall be SECTION 205.13— ADMINISTRATIVE made in writing and addressed to the Secretary, ENFORCEMENT Board of Governors of the Federal Reserve System, Washington, D.C. 20551. It must be postmarked or (a) Enforcement by federal agencies. (1) Admin received by the Secretary’s office within 30 days of istrative enforcement of the Act and this regulation the interpretation’s publication in the Federal Regis for certain financial institutions is assigned to the ter.The request shall contain a statement setting forth Comptroller of the Currency, Board of Governors of the reasons why the person making the request be the Federal Reserve System, Board of Directors of lieves that public comment would be appropriate. the Federal Deposit Insurance Corporation, Federal (4) Pursuant to § 915(d) of the Act, the Board Home Loan Bank Board (acting directly or through has designated the Director and other officials of the the Federal Savings and Loan Insurance Corpora Division of Consumer and Community Affairs as tion), National Credit Union Administration Board, officials “duly authorized” to issue, at their discre Civil Aeronautics Board, and Securities and Ex tion, official staff interpretations of this regulation. change Commission. (c) Record retention. (1) Evidence of compliance (2) Except to the extent that administrative en with the requirements imposed by the Act and this forcement is specifically committed to other author regulation shall be preserved by any person subject to ities, compliance with the requirements imposed the Act and this regulation for a period of not less under the Act and this regulation is enforced by the than 2 years. Records may be stored by use of micro Federal Trade Commission. fiche, microfilm, magnetic tape, or other methods (b) Issuance of staff interpretations. (1) Un capable of accurately retaining and reproducing infor official staff interpretations are issued at the staff’s mation. discretion where the protection of § 915(d) of the Act (2) Any person subject to the Act and this reg is neither requested nor required, or where a rapid ulation that has actual notice that it is being investi response is necessary. gated or is subject to an enforcement proceeding by (2)(i) Official staff interpretations are issued at an agency charged with monitoring that person’s the discretion of designated officials. No interpreta compliance with the Act and this regulation, or that tions will be issued approving financial institutions’ has been served with notice of an action filed under forms or statements. Any request for an official staff §§ 910, 915, or 916(a) of the Act, shall retain the interpretation of this regulation shall be made in writ information required in paragraph (c)(1) of this sec ing and addressed to the Director of the Division of tion that pertains to the action or proceeding until Consumer and Community Affairs, Board of Gov final disposition of the matter, unless an earlier time ernors of the Federal Reserve System, Washington, is allowed by order of the agency or court. D.C. 20551. The request shall contain a complete statement of all relevant facts concerning the transfer SECTION 205.14— SERVICES OFFERED BY or service, and shall include copies of all pertinent FINANCIAL INSTITUTIONS NOT HOLDING documents. CONS UME R’S ACCOUNT (ii) Within 5 business days of receipt of a request, an acknowledgment will be sent to the per (a) Compliance by service-providing institu son making the request. If the designated officials tion. Except as provided in this section, where a deem issuance of an official staff interpretation to be financial institution issues an access device to a con § 205.14 R E G ULA TIO N E sumer to be used for initiating electronic fund trans fers to or from the consumer’s account held by another financial institution, and the serviceproviding institution does not have an agreement with the account-holding institution regarding the service, the service-providing institution shall comply with all requirements of the Act and this regulation thatrelate to the service or the electronic fund transfers made by the consumer under the service. For this purpose, the following special rules shall apply: (1) Section 205.6 shall require the serviceproviding institution to reimburse the consumer for unauthorized electronic fund tranfers in excess of the limits set by that section. (2) Sections 205.7, 205.8, and 205.9 shall re quire the service-providing institution to provide those disclosures and documentation that are within itsknowledge and the purview of itsrelationship with the consumer. (3) Section205.1 l(b)(l)(i)shallrequiretheserv ice-providing institution to extend by a reasonable time the time periods within which notice of an error must be received if a delay in notifying the serviceproviding institution was due to the fact that the consumer initially notified or attempted to notify the account-holding institution. (4) Sections 205.1 l(c)(2)(i) and (e)(1) shall re quire the service-providing institution to transfer funds, in the appropriate amount and within the ap plicable time period, to the consumer’s account atthe account-holding institution. (5) Section 205.1 l(c)(2)(ii) shall require the service-providing institution to disclose the date on which it initiates a transfer to effect the provisional recredit. (6) Section 205.11(f)(2) shall require the serv ice-providing institution to notify the accountholding institution of the date until which the account-holding institution must honor any debit to the account as required by § 205.11(f)(2). Ifan over draft results, the service-providing institution shall promptly reimburse the account-holding institution in the amount of the overdraft. (b) Compliance by account-holding institution. An account-holding institutiondescribed inparagraph (a) of this section need not comply with the require ments of the Act and this regulation with respect to electronic fund transfers to or from the consumer’s account made by the service-providing institution, except that the account-holding institution shall com ply with § 205.11 by: (1) Promptly providing, upon the request of the service-providing institution, information or copies of documents required for the purpose of investigating alleged errors or furnishing copies of documents to the consumer; and (2) Honoring debits to the account in accord ance with § 205.11(f)(2). (c) Definition of agreement. For purposes of this section, an agreement between the service-providing and the account-holding institutions regarding the electronic fund transfer service refers to a specific agreement(s) among institutions (or among institu tions and another person thatparticipates inthe opera tion of the service) which sets forth the rights and obligations ofthe institutions with respectto a service involving the issuance of an access device to the consumer. Institutions do not have such an agreement solely because they participate in transactions thatare cleared through an automated or other clearing house or similar arrangement forthe clearing and settlement of fund transfers generally, or because they agree to be bound by the rules of such an arrangement. ST A T U T O R Y APPENDIX FINANCIAL INSTITUTIONS REGULATORY AN D INTEREST RATE CONTROL ACT OF 1978 PUBLIC L A W 95-630 TITLE X X — ELECTRONIC FUND TRANSFERS S e c . 2001. The Consumer Protection Act (15 U.S.C. 1601 etseq.) isamended by adding atthe end thereof the following new title: TITLE IX— ELECTRONIC FUND TRANSFERS §901. SHORT TITLE This title may be cited as the “Electronic Fund Transfer Act” . § 902. FINDINGS A N D PURPOSE (a) The Congress finds that the use of electronic systems to transfer funds provides the potential for substantial benefits to consumers. However, due to the unique characteristics of such systems, the appli ST ATUTOR Y APPEN D IX cation of existing consumer protection legislation is unclear, leaving the rights and liabilities of consum ers, financial institutions, and intermediaries in elec tronic fund transfers undefined. (b) It is the purpose of this title to provide a basic framework establishing the rights, liabilities, and re sponsibilities of participants in electronic fund trans fer systems. The primary objective of this title, however, is the provision of individual consumer rights. SECTION 903— DEFINITIONS As used in this title— (1) the term “accepted card or other means of access” means a card, code, or other means of access to a consumer’s account for the purpose of initiating electronic fund transfers when the person to whom such card or other means of access was issued has requested and received or has signed or has used, or authorized another to use, such card or other means of access for the purpose of transferring money between accounts orobtaining money, property, labor, or serv ices; (2) the term “account” means a demand de posit, savings deposit, or other asset account (other than an occasional or incidental credit balance in an open end credit plan as defined in section 103(i) of this Act), as described in regulations of the Board, established primarily for personal, family, or house hold purposes, but such term does not include an account held by a financial institution pursuant to a bonafide trust agreement; (3) the term “Board” means the Board of Gov ernors of the Federal Reserve System; (4) the term “business day” means any day on which the offices of the consumer’s financial institu tion involved in an electronic fund transfer are open to the public for carrying on substantially all of its business functions; (5) the term “consumer” means a natural per son; (6) the term “electronic fund transfer” means any transfer of funds, other than a transaction origi nated by check, draft, or similar paper instrument, which isinitiatedthrough an electronic terminal, tele phonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institu tion todebit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, auto REGULATION E mated teller machine transactions, direct deposits or withdrawals of funds, and tranfers initiated by tele phone. Such term does not include— (A) any check guarantee or authorization service which does not directly result in a debit or credit to a consumer’s account; (B) any transfer of funds, other than those processed by automated clearinghouse, made by a financial institution on behalf of a consumer by means of a service that transfers funds held at either Federal Reserve banks or otherdepository institutions and which is not designed primarily to transfer funds on behalf of a consumer; (C) any transaction the primary purpose of which is the purchase or sale of securities or com modities through a broker-dealer registered with or regulated by the Securities and Exchange Commis sion; (D) any automatic transfer from a savings account to a demand deposit account pursuant to an agreement between a consumer and a financial insti tution for the purpose of covering an overdraft or maintaining an agreed upon minimum balance in the consumer’s demand deposit account; or (E) any transfer of funds which is initiated by a telephone conversation between a consumer and an officeror employee of a financial institution which isnot pursuant to a prearranged plan and under which periodic or recurring transfers are not contemplated; periodic or recurring transfers are not contemplated; as determined under regulations of the Board; (7) the term “electronic terminal” means an electronic device, other than a telephone operated by a consumer, through which a consumer may initiate an electronic fund transfer. Such term includes but is not limited to, point-of-sale terminals, automated tel ler machines, and cash dispensing machines; (8) the term “financial institution” means a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal creditunion, or any other person who, direct ly or indirectly, holds an account belonging to a consumer; (9) the term “preauthorized electronic fund transfer” means an electronic fund transfer autho rized in advance to recur atsubstantiallyregular inter vals; (10) the term “State” means any State, terri tory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or REGULATIO N E any political subdivision of any of the foregoing; and (11) the term “unauthorized electronic fund transfer” means an electronic fund transfer from a consumer’s account initiated by a person other than the consumer without actual authority to initiate such transfer and from which the consumer receives no benefit, but the term does not include any electronic fund transfer (A) initiated by a person other than the consumer who was furnished with the card, code, or other means of access to such consumer’s account by such consumer, unless the consumer has notified the financial institution involved that transfers by such other person are no longer authorized, (B) initiated with fraudulent intent by the consumer or any person acting in concert with the consumer, or (C) which constitutes an error committed by a financial institu tion. § 904. Regulations (a) The Board shall prescribe regulations to carry out the purposes of this title. In prescribing such regulations, the Board shall: (1) consult with the other agencies referred to in section 917 and take into account, and allow for, the continuing evolution of electronic banking services and the technology utilized in such services, (2) prepare an analysis of economic impact which considers the cost and benefits to financial institutions, consumers, and other users,of electronic fund transfers, including the extent towhich addition al documentation, reports, records, or other paper work would be required, and the effects upon com petition in the provision of electronic banking serv ices among large and small financial institutions and the availability of such services to different classes of consumers, particularly low income consumers, (3) to the extent practicable, the Board shall demonstrate that the consumer protections of the proposed regulations outweigh the compliance costs imposed upon consumers and financial institutions, and (4) any proposed regulations and accompanying analyses shall be sent promptly to Congress by the Board. (b) The Board shall issue model clauses for op tional use by financial institutions to facilitate com pliance with the disclosure requirements of section 905 and to aid consumers in understanding the rights and responsibilities of participants in electronic fund STATUTORY APPENDIX transfers by utilizing readily understandable lan guage. Such model clauses shall be adopted after notice duly given in the Federal Register and oppor tunity for public comment in accordance with section 553 of title5, United States Code. With respect to the disclosures required by section 905(a) (3) and (4), the Board shall take account of variations in the services and charges under different electronic fund transfer systems and, as appropriate, shall issue alternative model clauses for disclosure of these differing account terms. (c) Regulations prescribed hereunder may contain such classifications, differentiations, or other provi sions, and may provide for such adjustments and exceptions for any class of electronic fund transfers, as in the judgment of the Board are necessary or proper to effectuate the purposes of this title, to pre vent circumvention or evasion thereof, or to facilitate compliance therewith. The Board shall by regulation modify the requirements imposed by this title on small financial institutions if the Board determines that such modifications are necessary to alleviate any undue compliance burden on small financial institu tions and such modifications are consistent with the purpose and objective of this title. (d) In the event that electronic fund transfer serv ices are made available to consumers by a person other than a financial institutionholding a consumer’s account, the Board shall by regulation assure that the disclosures, protections, responsibilities, and rem edies created by this title are made applicable to such persons and services. § 905. Terms and conditions of transfers (a) The terms and conditions of electronic fund transfers involving a consumer’s account shall be disclosed at the time the consumer contracts for an electronic fund transfer service, in accordance with regulations of the Board. Such disclosures shall be in readily understandable language and shall include, to the extent applicable— (1) the consumer’s liability for unauthorized electronic fund transfers and, at the financial institu tion’s option, notice of the advisability of prompt reporting of any loss, theft, or unauthorized use of a card, code, or other means of access; (2) the telephone number and address of the person or office to be notified in the event the con ST ATUTOR Y APPEN D IX sumer believes that an unauthorized electronic fund transfer has been or may be effected; (3) the type and nature of electronic fund trans fers which the consumer may initiate, including any limitations on the frequency or dollar amount of such transfers, except that the details of such limitations need not be disclosed iftheirconfidentiality isneces sary to maintain the security of an electronic fund transfer system, as determined by the Board; (4) any charges for electronic fund transfers or for the right to make such transfers; (5) the consumer’s right to stop payment of a preauthorized electronic fund transfer and the proce dure to initiate such a stop payment order; (6) the consumer’s right to receive documenta tion of electronic fund transfers under section 906; (7) a summary, in a form prescribed by regula tions of the Board, of the error resolution provisions of section 908 and the consumer’s rights thereunder. The financial institution shall thereafter transmit such summary at least once per calendar year; (8) the financial institution’s liabilityto the con sumer under section 910; and (9) under what circumstances the financial insti tution will in the ordinary course of business disclose information concerning the consumer’s account to third persons. (b) A financial institution shall notify a consumer in writing at least twenty-one days prior to the effec tivedate ofany change in any term or condition of the consumer’s account required to be disclosed under subsection (a) if such change would result in greater cost or liability for such consumer or decreased ac cess to the consumer’s account. A financial institu tion may, however, implement a change in the terms or conditions of an account without priornotice when such change is immediately necessary to maintain or restore the security of an electronic fund transfer system or a consumer’s account. Subject to subsec tion (a)(3), the Board shall require subsequent notifi cation ifsuch a change is made permanent. (c) For any account of a consumer made accessible to electronic fund transfers prior to the effective date of this title, the information required to be disclosed to the consumer under subsection (a) shall be dis closed not later than the earlier of— (1) the first periodic statement required by sec tion 906(c) after the effective date of this title; or (2) thirty days after the effective date of this title. REGULATION E § 906. Documentation of transfers; periodic statements (a) For each electronic fund transfer initiated by a consumer from an electronic terminal, the financial institution holding such consumer’s account shall, directly or indirectly, at the time the transfer is initi ated, make available to the consumer written documentation of such transfer. The documentation shall clearly set forth to the extent applicable— (1) the amount involved and date the transfer is initiated; (2) the type of transfer; (3) the identity of the consumer’s account with the financial institution from which or to which funds are transferred; (4) the identity of any third party to whom or from whom funds are transferred; and (5) the location or identification of the electro nic terminal involved. (b) For a consumer’s account which is scheduled to be credited by a preauthorized electronic fund transfer from the same payor at least once in each successive sixty-day period, except where the payor provides positive notice ofthe transferto the consum er, the financial institution shall elect to provide promptly eitherpositive notice to the consumer when the credit is made as scheduled, or negative notice to the consumer when the credit is not made as sched uled, in accordance with regulations of the Board. The means of notice elected shall be disclosed to the consumer in accordance with section 90^ (c) A financial institution shall provide each con sumer with a periodic statement for each account of such consumer that may be accessed by means of an electronic fund transfer. Except as provided in sub sections (d) and (e), such statement shall be provided at least monthly for each monthly or shorter cycle in which an electronic fund transfer affecting the account has occurred, or every three months, whichever is more frequent. The statement, which may include information regarding transactions other than electronic fund transfers, shall clearly set forth— (1) with regard to each electronic fund transfer during the period, the information described in sub section (a), which may be provided on an accom panying document; (2) the amount of any fee or charge assessed by REGU LATIO N E the financial institution during the period for elec tronic fund transfers or for account maintenance; (3) the balances in the consumer’s account at the beginning of the period and at the close of the period; and (4) the address and telephone number to be used by the financial institution for the purpose of receiv ing any statement inquiry or notice of account error from the consumer. Such address and telephone num ber shall be preceded by the caption “Direct Inquiries To:” or other similar language indicating that the address and number are to be used for such inquiries or notices. (d) In the case of a consumer’s passbook account which may not be accessed by electronic fund trans fers other than preauthorized electronic fund transfers crediting the account, a financial institution may, in lieuofcomplying with the requirements of subsection (c), upon presentation of the passbook provide the consumer in writing with the amount and date of each such transfer involving the account since the pass book was last presented. (e) In the case of a consumer’s account other than a passbook account, which may not be accessed by electronic fund transfers other than preauthorized electronic fund transfers crediting the account, the financial institution may provide a periodic statement on a quarterly basis which otherwise complies with the requirements of subsection (c). (0 In any action involving a consumer, any documentation required by this section to be given to the consumer which indicates that an electronic fund transferwas made to another person shall be admissi ble as evidence of such transfer and shall constitute prima facie proof that such transfer was made. STATUTORY and the address to which such confirmation should be sent. (b) In the case of preauthorized transfers from a consumer’s account to the same person which may vary in amount, the financial institution or designated payee shall, priortoeach transfer, provide reasonable advance notice to the consumer, in accordance with regulations of the Board, of the amount to be trans ferred and the scheduled date of the transfer. § 908. Error resolution (a) Ifa financial institution, within sixty days after having transmitted to a consumer documentation pur suant to section 906 (a), (c), or (d) or notification pursuant to section 906(b), receives oral or written notice in which the consumer— (1) sets forth or otherwise enables the financial institution to identify the name and account number of the consumer; (2) indicates the consumer’s belief that the documentation, or, in the case of notification pur suant to section 906(b), the consumer’s account, con tains an error and the amount of such error; and (3) sets forth the reasons for the consumer’s belief (where applicable) that an error has occurred, the financial institution shall investigate the alleged error, determine whether an error has occurred, and report or mail the results of such investigation and determination to the consumer within ten business days. The financial institution may require written confirmation to be provided to itwithin ten business days of an oral notification of error if, when the oral notification is made, the consumer isadvised of such requirement and the address to which such confirma tion should be sent. A financial institution which requires written confirmation in accordance with the § 907. Preauthorized transfers previous sentence need not provisionally recredit a (a) A preauthorized electronic fund transfer from a consumer’s account in accordance with subsection consumer’s account may be authorized by the con (c), nor shall the financial institution be liable under sumer only in writing, and a copy of such authoriza subsection (e) if the written confirmation is not re tion shall be provided to the consumer when made. A ceived within the ten-day period referred to in the consumer may stop payment of a preauthorized elec previous sentence. tronic fund transfer by notifying the financial institu (b) If the financial institution determines that an tion orally or in writing at any time up to three error did occur, it shall promptly, but in no event business days preceding the scheduled date of such more than one business day aftersuch determination, transfer. The financial institution may require written correct the error, subject to section 909, including the confirmation to be provided to itwithin fourteen days crediting of interest where applicable. of an oral notification if,when the oral notification is (c) If a financial institution receives notice of an made, the consumer is advised of such requirement error in the manner and within the time period speci ST ATU TOR Y APPENDIX fied in subsection (a), itmay, in lieu of the require ments of subsections (a) and (b), within ten business days afterreceiving such notice provisionally recredit the consumer’s account for the amount alleged to be in error, subject to section 909, including interest where applicable, pending theconclusion ofitsinvest igation and its determination of whether an error has occurred. Such investigation shall be concluded not laterthan forty-five days after receipt of notice of the error. During the pendency of the investigation, the consumer shall have full use of the funds provisional ly recredited. (d) If the financial institution determines after its investigation pursuant to subsection (a) or (c) that an error did not occur, it shall deliver or mail to the consumer an explanation of itsfindings within 3 busi ness days afterthe conclusion of itsinvestigation, and upon request of the consumer promptly deliver or mail to the consumer reproductions of all documents which the financial institution relied on to conclude that such errordid not occur. The financial institution shall include notice of the right to request reproduc tions with the explanation of its findings. (e) If in any action under section 915, the court finds that— (1) the financial institutiondid not provisionally recredit a consumer’s account within the ten-day period specified in subsection (c), and the financial institution (A) did not make a good faith investigation of the alleged error, or (B) did not have a reasonable basis for believing that the consumer’s account was not in error; or (2) the financial institution knowingly and will fully concluded that the consumer’s account was not in error when such conclusion could not reasonably have been drawn from the evidence available to the financial institution at the time of its investigation, then the consumer shall be entitled to treble damages determined under section 915(a)(1). (f) For the purpose of this section, an error con sists of— (1) an unauthorized electronic fund transfer; (2) an incorrect electronic fund transfer from or to the consumer’s account; (3) the omission from a periodic statement of an electronic fund transfer affecting the consumer’s account which should have been included; (4) a computational error by the financial insti tution; REGULATION E (5) the consumer’s receipt of an incorrect amount of money from an electronic terminal; (6) a consumer’s request foradditional informa tion or clarification concerning an electronic fund transferor any documentation required by thistitle;or (7) any other error described in regulations of § 909. Consumer liability for unauthorized transfers (a) A consumer shall be liable for any unautho rized electronic fund transfer involving the account of such consumer only ifthe card or other means of access utilized for such transfer was an accepted card or other means of access and if the issuer of such card, code, or other means of access has pro vided a means whereby the user of such card, code, or other means of access can be identified as the person authorized to use it, such as by signature, photograph, or fingerprint or by electronic or mechanical confirmation. In no event, however, shall a consumer’s liability for an unauthorized transfer exceed the lesser of— (1) $50; or (2) the amount of money or value of property or services obtained in such unauthorized electronic fund transfer prior to the time the financial institu tion is notified of, or otherwise becomes aware of, circumstances which lead to the reasonable belief that an unauthorized electronic fund transfer involv ing the consumer’s account has been or may be effected. Notice under this paragraph is sufficient when such steps have been taken as may be reason ably required in the ordinary course of business to provide the financial institution with the pertinent information, whether or not any particular officer, employee, or agent of the financial institution does in fact receive such information. Notwithstanding the foregoing, reimbursement need not be made to the consumer for losses the finan cial institution establishes would not have occurred but for the failure of the consumer to report within sixty days of transmittal of the statement (or in ex tenuating circumstances such as extended travel or hospitalization, within a reasonable time under the circumstances) any unauthorized electronic fund transfer or account error which appears on the periodic statement provided to the consumer under section 906. In addition, reimbursement need not R EG ULA TION E be made to the consumer for losses which the financial institution establishes would not have occurred but for the failure of the consumer to re port any loss or theft of a card or other means of access within two business days after the consumer learns of the loss or theft (or in extenuating cir cumstances such as extended travel or hospitaliza tion, within a longer period which is reasonable under the circumstances), but the consumer’s liabil ity under this subsection in any such case may not exceed a total of $500, or the amount of unautho rized electronic fund transfers which occur follow ing the close of two business days (or such longer period) after the consumer learns of the loss or theft but prior to notice to the financial institution under this subsection, whichever is less. (b) In any action which involves a consumer’s liability for an unauthorized electronic fund trans fer, the burden of proof is upon the financial insti tution to show that the electronic fund transfer was authorized or, if the electronic fund transfer was unauthorized, then the burden of proof is upon the financial institution to establish that the conditions of liability set forth in subsection (a) have been met, and, if the transfer was initiated after the effective date of section 905, that the disclosures required to be made to the consumer under section 905(a) (1) and (2) were in fact made in accordance with such section. (c) In the event of a transaction which involves both an unauthorized electronic fund transfer and an extension of credit as defined in section 103(e) of this Act pursuant to an agreement between the con sumer and the financial institution to extend such credit to the consumer in the event the consumer’s account is overdrawn, the limitation on the consum er’s liability for such transaction shall be deter mined solely in accordance with this section. (d) Nothing in this section imposes liability upon a consumer for an unauthorized electronic fund transfer in excess of his liability for such a transfer under other applicable law or under any agreement with the consumer’s financial institution. (e) Except as provided in this section, a consum er incurs no liability from an unauthorized electro nic fund transfer. § 910. Liability of financial institutions (a) Subject to subsections (b) and (c), a financial STATUTORY APPENDIX institution shall be liable to a consumer for all dam ages proximately caused by— (1) the financial institution’s failure to make an electronic fund transfer, in accordance with the terms and conditions of an account, in thecorrect amount or in a timely manner when properly instructed to do so by the consumer, except where— (A) the consumer’s account has insuffi cient funds; (B) the funds are subject to legal process or other encumbrance restricting such transfer; (C) such transfer would exceed an estab lished credit limit; (D) an electronic terminal has insufficient cash to complete the transaction; or (E) as otherwise provided in regulations of the Board; (2) the financial institution’s failure to make an electronic fund transfer due to insufficient funds when the financial institution failed to credit, in accordance with the terms and conditions of an account, a deposit of funds to the consumer’s account which would have provided sufficient funds to make the transfer, and ( 3 ) the financial institution’s failure to stop pay ment of a preauthorized transfer from a consumer’s account when instructed to do so in accordance with the terms and conditions of the account. (b) A financial institution shall not be liable under subsection (a)(1) or (2) if the financial institution shows by a preponderance of the evidence that its action or failure to act resulted from— (1) an act of God or other circumstance beyond itscontrol, thatitexercised reasonable care to prevent such an occurrence, and that it exercised such dili gence as the circumstances required; or (2) a technical malfunction which was known to the consumer at the time he attempted to initiate an electronic fund transfer or, in the case of a preautho rized transfer, at the time such transfer should have occurred. (c) In the case of a failure described in subsection (a) which was not intentional and which resulted from a bonafide error, notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, the financial institution shallbe liablefor actual damages proved. REGULATION E STATUTO RY APPENDIX § 911. Issuance of cards or other means of access (a) No person may issue to a consumer any card, code, or other means of access to such consumer’s account for the purpose of initiating an electronic fund transfer other than— (1) in response to a request or application there for; or (2) as a renewal of, or in substitution for, an accepted card, code, orothermeans ofaccess, whether issued by the initial issuer or a successor. (b) Notwithstanding the provisions of subsection (a), a person may distribute to a consumer on an unsolicited basis a card, code, or other means of access for use in initiating an electronic fund transfer from such consumer’s account, if— (1) such card, code, or other means of access is not validated; (2) such distribution is accompanied by a com plete disclosure, in accordance with section 905, of the consumer’s rights and liabilities which will apply ifsuch card, code, or other means of access is vali dated; (3) such distribution is accompanied by a clear explanation, in accordance with regulations of the Board, that such card, code, or other means of access isnot validated and how the consumer may dispose of such code, card, or other means of access if valida tion is not desired; and (4) such card, code, or other means of access is validated only in response to a request or application from the consumer, upon verification of the consum er’s identity. (c) For the purpose of subsection (b), a card, code, or other means of access is validated when itmay be used to initiate an electronic fund transfer. § 912. Suspension of obligations Ifa system malfunction prevents the effectuation of an electronic fund transfer initiated by a consumer to another person, and such other person has agreed to accept payment by such means, the consumer’s obli gation to the other person shall be suspended untilthe malfunction iscorrected and the electronic fund trans fer may be completed, unless such other person has subsequently, by written request, demanded payment by means other than an electronic fund transfer. § 913. Compulsory use of electronic fund transfers No person may— (1) condition the extension of credit to a con sumer on such consumer’s repayment by means of preauthorized electronic fund transfers; or (2) require a consumer to establish an account for receipt of electronic fund transfers with a particu lar financial institution as a condition of employment or receipt of a government benefit. § 914. Waiver of rights No writing or other agreement between a consumer and any other person may contain any provision which constitutes a waiver of any right conferred or cause of action created by this title. Nothing in this section prohibits, however, any writing or other agreement which grants to a consumer a more exten sive right or remedy or greater protection than con tained in this titleor a waiver given in settlement of a dispute or action. § 915. Civil liability (a) Except as otherwise provided by this section and section 910, any person who fails to comply with any provision of thistitlewith respect to any consum er, except for an error resolved in accordance with section 908, is liable to such consumer in an amount equal to the sum of— (1) any actual damage sustained by such con sumer as a result of such failure; (2)(A) in the case of an individual action, an amount not lessthan $100 nor greaterthan $1,000; or (B) in the case of a class action, such amount as the court may allow, except that (i) as to each member of the class no minimum recovery shall be applicable, and (ii) the total recovery under this subparagraph in any class action or series of class actions arising out of the same failure to comply by the same person shall not be more than the lesser of $500,000 or 1 per centum of the net worth of the defendant; and (3) in the case of any successful action to en force the foregoing liability, the costs of the action, together with a reasonable attorney’s fee as deter mined by the court. (b) In determining the amount of liability in any REGULATIO N E action under subsection (a), the court shall consider, among other relevant factors— (1) in any individual action under subsection (a)(2)(A), the frequency and persistance of noncom pliance, thd nature of such noncompliance, and the extent towhich the noncompliance was intentional; or (2) in any class action under subsection (a)(2)(B), the frequency and persistance of noncom pliance, the nature of such noncompliance, the re sources of the defendant, the number of persons adversely affected, and the extent to which the non compliance was intentional. (c) Except as provided in section 910, a person may not be held liable in any action brought under this section for a violation of this title if the person shows by a preponderance of evidence that the viola tion was not intentional and resulted from a bonafide error notwithstanding the maintenance of procedures reasonably adapted to avoid any such error. (d) No provision of this section or section 916 imposing any liability shall apply to— (1) any act done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the Board or in conformity with any inter pretation or approval by an official oremployee ofthe Federal Reserve System duly authorized by the Board to issue such interpretations or approvals under such procedures as the Board may prescribe therefor; or (2) any failure to make disclosure in proper form ifa financial institution utilized an appropriate model clause issued by the Board, notwithstanding that after such act, omission, or fail ure has occurred, such rule, regulation, approval, or model clause is amended, rescinded, or determined by judicial or other authority to be invalid for any reason. (e) A person has no liability under this section for any failureto comply with any requirement under this title if, prior to the institution of an action under this section, the person notifies the consumer concerned of the failure, complies with the requirements of this title, and makes an appropriate adjustment to the consumer’s account and pays actual damages or, where applicable, damages in accordance with sec tion 910. (f) On a finding by the court that an unsuccessful action under this section was brought in bad faith or for purposes of harassment, the court shall award to STATUTORY APPENDIX the defendant attorney’s fees reasonable in relation to the work expended and costs. (g) Without regard to the amount in controversy, any action under this section may be brought in any United States district court, or in any other court of competentjusisdiction, within one year from the date of the occurrence of the violation. § 916. Criminal liability (a) Whoever knowingly and willfully— (1) gives false or inaccurate information or fails to provide information which he is required to dis close by this titleor any regulation issued thereunder; or (2) otherwise failsto comply with any provision of this title; shall be fined not more than $5,000 or imprisoned not more than one year, or both. (b) Whoever— (1) Knowingly, in a transaction affecting inter state or foreign commerce, uses or attempts or con spires to use any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained debit instrument to obtain money, goods, services, or any thing else of value which within any one-year period has a value aggregating $1,000 or more; or (2) with unlawful or fraudulent intent, trans ports or attempts or conspires to transportin interstate or foreign commerce a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained debit instrument knowing the same to be counterfeit, ficti tious, altered, forged, lost, stolen, or fraudulently obtained; or (3) with unlawful or fraudulent intent, uses any instrumentality of interstate or foreign commerce to sell or transport a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained debit instrument knowing the same to be counterfeit, ficti tious, altered, forged, lost, stolen, or fraudulently obtained; or (4) knowingly receives, conceals, uses, or transports money, goods, services, or anything else of value (except tickets for interstate or foreign trans portation) which (A) within any one-year period has a value aggregating $1,000 or more, (B) has moved in or ispart of, or which constitutes interstate or foreign commerce and (C) has been obtained with a counter feit,fictitious, altered, forged, lost, stolen, or fraudu lently obtained debit instrument; or ST ATUTORY APPENDIX REGULATION E (4) the Federal Aviation Act of 1958, by the Civil Aeronautics Board, with respect to any air car rier or foreign air carrier subject to that Act; and (5) the Securities Exchange Act of 1934, by the Securities and Exchange Commission, with respect to any broker or dealer subject to that Act. (b) For the purpose of the exercise by any agency referred to in subsection (a) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this title shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in subsection (a), each of the agencies referred to in that subsection may exer cise, for the purpose of enforcing compliance with any requirement imposed under this title, any other authority conferred on itby law. (c) Except to the extent that enforcement of the requirements imposed under this title is specifically committed to some other Government agency under subsection (a), the Federal Trade Commission shall enforce such requirements. For the purpose of the exercise by the Federal Trade Commission of its functions and powers under the Federal Trade Com mission Act, a violation of any requirement imposed under this title shall be deemed a violation of a re § 917. Administrative enforcement quirement imposed under that Act. All of the func (a) Compliance with the requirements imposed tions and powers of the Federal Trade Commission under the Federal Trade Commission Act are avail under this title shall be enforced under— able to the Commission to enforce compliance by any (1) section 8 of the Federal Deposit Insurance person subject to the jurisdiction of the Commission Act, in the case of— with the requirements imposed under this title, irre (A) national banks, by the Comptroller of spective of whether that person is engaged in com the Currency; merce or meets any other jurisdictional tests in the (B) member banks of the Federal Reserve Federal Trade Commission Act. System (other than national banks), by the Board; (C) banks insured by the Federal Deposit Insurance Corporation (other than members of the § 918. Reports to Congress Federal Reserve System), by the Board of Directors of the Federal Deposit Insurance Corporation; (a) Not laterthan twelve months afterthe effective (2) section 5(d) of the Home Owners’Loan Act date of this title and at one-year intervals thereafter, of 1933, section 407 of the National Housing Act, the Board and the Attorney General shall, respective and sections 6(i) and 17 of the Federal Home Loan ly, make reports to the Congress concerning the Bank Act, by the Federal Home Loan Bank Board administration of their functions under this title, in (acting directly or through the Federal Savings and cluding such recommendations as the Board and the Loan Insurance Corporation), in the case of any insti Attorney General respectively, deem necessary or appropriate. In addition, each report of the Board tution subject to any of those provisions; shall include its assessment of the extent to which (3) the Federal Credit Union Act, by the Admin compliance with this title is being achieved, and a istrator of the National Credit Union Administration summary of the enforcement actions taken under sec with respect to any Federal credit union. (5) knowingly receives, conceals, uses, sells, or transports in interstate or foreign commerce one or more tickets for interstate or foreign transportation, which (A) within any one-year period have a value aggregating $500 or more, and (B) have been pur chased or obtained with one or more counterfeit, fictitious, altered, forged, lost, stolen, or fraudu lently obtained debit instrument; or (6) in a transaction affecting interstate or for eign commerce, furnishes money, property, services, or anything else of value, which within any one-year period has a value aggregating $1,000 or more, through the use of any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained debit instrument knowing the same to be counterfeit, ficti tious, altered, forged, lost, stolen, or fraudulently obtained— shall be fined not more than $10,000 or imprisoned not more than ten years, or both. (c) As used in this section, the term “debit instru ment” means a card, code, or other device, other than a check, draft, or similar paper instrument, by the use of which a person may initiate an electronic fund transfer. APPENDIX A tion 917 of this title. In such report, the Board shall particularly address the effects of this title on the costs and benefits to financial institutions and con sumers, on competition, on the introduction of new technology, on the operations of financial institu tions, and on the adequacy of consumer protection. The report of the Attorney General shall also contain an analysis ofthe impact ofthistitleon the operation, workload, and efficiency of the Federal courts. (b) In the exercise of itsfunctions under this title, the Board may obtain upon request the views of any other Federal agency which, in the judgment of the Board, exercises regulatory or supervisory functions with respect to any class of persons subject to this title. § 919. Relation to State laws This title does not annul, alter, or affect the laws of any State relating to electronic fund transfers, except to the extent that those laws are inconsistent with the provisions of this title, and then only to the extent of the inconsistency. A State law is not inconsistent with this title ifthe protection such law affords any consumer is greater than the protection afforded by this title. The Board shall, upon its own motion Or upon the request of any financial institution, State, or other interested party, submit ted in accordance with procedures prescribed in regulations of the Board, determine whether a State requirement is inconsistent or affords greater pro tection. If the Board determines that a State re quirement is inconsistent, financial institutions shall incur no liability under the law of that State for a good faith failure to comply with that law, notwith standing that such determination is subsequently amended, rescinded, or determined by judcial or other authority to be invalid for any reason. This title does not extend the applicability of any such law to any class of persons or transactions to which it would not otherwise apply. § 920. Exemption for State regulation The Board shall by regulation exempt from the requirements of this title any class of electronic fund transfers within any State if the Board deter mines that under the law of that State that class of electronic fund transfers is subject to requirements REGULATION E substantially similar to those imposed by this title, and that there is adequate provision for enforce ment. § 921. Effective date This title takes effect upon the expiration of eighteen months from the date of its enactment, ex cept that sections 909 and 911 take effect upon the expiration of ninety days after the date of enact ment. APPENDIX A— MODEL DISCLOSURE CLAUSES This appendix contains model disclosure clauses for optional use by financial institutions to facilitate compliance with the disclosure requirements of §§ 205.5(a)(3), (b)(2), and (b)(3), 205.6(a)(3), and 205.7. Section 915(d)(2) of the Act provides that use of these clauses in conjunction with other require ments of the regulation will protect financial institu tions from liability under §§ 915 and 916 of the Act to the extent that the clauses accurately reflect the institutions’electronic fund transfer services. Financial institutions need not use any of the clauses, but may use clauses of their own design in conjunction with the model clauses. The inapplicable words or portions of phrases in parentheses should be deleted. The underscored catchlines are not part of the clauses and should not be used as such. Financial institutions may make alterations, substitutions, or additions in the clauses in order to reflectthe services offered, such as technical changes (e.g., substitution of a trade name for the word “card,” deletion of inapplicable services, or substitution of lesserliability limitsin§ A(2)). SectionsA(3), A(8) and A(9) include references to a telephone number and address. Where two or more of these clauses are used in a disclosure, the telephone number and address need not be re peated ifreferenced. S E C T I O N A(l)— D I S C L O S U R E T H A T A C C E S S D E V I C E IS N O T V A L I D A T E D A N D H O W T O D I S P O S E O F D E V I C E IF V A L I D A T I O N IS N O T D E S I R E D (§ 205.5(b)(3)) (a) Account using cards. Y O U C A N N O T USE THE ENCLOSED C ARD TO TRANSFER REGULATIO N E M O N E Y INTO OR OUT OF YOUR ACCOUNT UNTIL W E HAVE VALIDATED IT. IF YOU DO NOT W A N T TO USE THE CARD, PLEASE (destroy itat once by cutting it in half). APPENDIX A S E C T I O N A(3)— D I S C L O S U R E O F TELEPHONE N U M B E R A N D ADDRESS TO B E N O T I F I E D IN E V E N T O F U N A U T H O R I Z E D T R A N S F E R (§205.7(a)(2)) (a) Address and telephone number. If you be lieve your (card)(code) has been lost or stolen or that someone has transferred or may transfer money from (b) Accounts using codes. Y OU CANNOT USE your account without your permission, call: THE ENCLOSED CODE TO TRANSFER M O N E Y INTO OR OUT OF YOUR ACCOUNT UNTIL W E [Telephone number] HAVE VALIDATED IT. IF YO U DO NOT W A N T TO USE THE CODE, PLEASE (destroy this notice or write: at once). [Financial institution may add validation instruc tions here.] [Financial institution may add validation instruc tions here.] S E C T I O N A(2)— D I S C L O S U R E O F C O N S U M E R S LIABILITY F O R UNAUTHORIZED TRANSFERS A N D O P T I O N A L D I S C L O S U R E O F ADVISABILITY O F P R O M P T R E P O R T I N G (§ 205.7(a)(1)) [Name of person or office to be notified] [Address] S E C T I O N A(4)— D I S C L O S U R E O F W H A T C O N S T I T U T E S BU S I N E S S D A Y O F IN STIT U T I O N (§ 205.7(a)(3)) (a) Business day disclosure. Our business days a r e (Monday through Friday) (Monday through Satur (a) Liability disclosure. (Tell us AT ONCE ifyou day) (any day including Saturdays and Sundays). believe your (card)(code) has been lost or stolen. Holidays are (not) included. Telephoning isthe best way of keeping your possible losses down. You could lose all the money in your account (plus your maximum overdraft line ofcredit). S E C T I O N A(5)— D I S C L O S U R E O F T Y P E S O F Ifyou tellus within 2 business days, you can lose no A V A I L A B L E T R A N S F E R S A N D LI MITS O N more than $50 if someone used your (card)(code) T R A N S F E R S (§ 205.7(a)(4)) without your permission.) (Ifyou believe your (card) (code) has been lost or stolen, and you tell us within (a) Account access. You may use your (card) 2 business days after you leam of the loss or theft, (code) to you can lose no more than $50 ifsomeone used your (1) Withdraw cash from your (checking) (card)(code) without your permission.) (or)(savings) account. If you do NOT tell us within 2 business days after (2) Make deposits to your (checking)(or) (sav you leam ofthe loss or theftofyour (card)(code), and ings) account. we can prove we could have stopped someone from (3) Transfer funds between your checking and using your (card)(code) without your permission if savings accounts whenever you request. you had told us, you could lose as much as $500. (4) Pay for purchases at places that have agreed Also, ifyour statement shows transfersthatyou did to accept the (card)(code). not make, tellus at once. Ifyou do not tellus within (5) Pay bills directly (by telephone) from your (checking)(or)(savings) account in the 60 days after the statement was mailed to you, you may not get back any money you lost after the 60 amounts and on the days you request. days if we can prove that we could have stopped Some of these services may not be available at all someone from taking the money ifyou had told us in terminals. time. (b) Limitations on frequency of transfers. If a good reason (such as a long trip or a hospital (1) You may make only [insertnumber, e.g., 3] stay)kept you from tellingus, we will extend the time cash withdrawals from our terminals each [inserttime periods. period, e.g., week]. APPENDIX A (2) You can use your telephone bill-payment service to pay [insert number] bills each [insert time period] (telephone call). (3) You can use our point-of-sale transfer ser vice for [insert number] transactions each [inserttime period]. (4) For security reasons, there are (other) limits on the number of transfers you can make using our (terminals)(telephone bill-payment service)(point-ofsale transfer service). (c) Limitations on dollar amounts of transfers. (1) You may withdraw up to ([insert dollar amount] from our terminals each [insert time period])(time you use the (card) (code)). (2) You may buy up to [insert dollar around] worth of goods or services each ([insert time period])(time you use the (card) (code)) in our point-of-sale transfer service. S E C T I O N A(6)— D I S C L O S U R E O F C H A R G E S F OR TRANSFERS O R RIGHT T O M A K E T R A N S F E R S (§ 205.7(a)(5)) (a) Per transfer charge. We will charge you [insert dollar amount] for each transfer you make using our (automated teller machines) (telephone bill-payment service) (point-of-sale transfer ser vice). (b) Fixed charge. We will charge you [insert dollar amount] each [insert time period] for our (automated teller machine service) (telephone billpayment service) (point-of-sale transfer service). (c) Average or minim um balance charge. We will only charge you for using our (automated teller machines) (telephone bill-payment service) (pointof-sale transfer service) if the (average) (minimum) balance in your (checking account) (savings account) (accounts) falls below [insert dollar amount]. If it does, we will charge you [insert dol lar amount] each (transfer) ([insert time period]). S E C T I O N A(7)— D I S C L O S U R E O F A C C O U N T I N F O R M A T I O N T O T H I R D PARTIES (§ 205.7(a)(9)) (a)Account information disclosure. We will dis close information to third parties about your account or the transfers you make: (1) where it is necessary for completing trans fers. REGULATION E or (2) inorder to verify the existence and condition of your account for a third party, such as a credit bureau or merchant. or (3) in order to comply with government agency or court orders. or (4) If you give us your written permission. S E C T I O N A(8)— D I S C L O S U R E O F R I G H T T O RECEIVE D O C U M E N T A T I O N OF TRANFERS (§ 205.7(a)(6)) (a) Terminal transfers. You can get a receipt at the time you make any transfer to or from your account using one of our (automated teller machines) (or) (point-of-sale terminals). (b) Preauthorized credits. If you have arranged to have direct deposits made to your account at least once every 60 days from the same person or com pany, (we will letyou know ifthe deposit is(not) made.) (theperson or company making the deposit will tell you every time they send us the money.) (you can callus at [inserttelephone number] tofind out whether or not the deposit has been made.) (c) Periodic statements. You will get a (monthly) (quarterly) account statement (unless there are no transfers in a particular month. In any case you will get the statement at least quarterly). (d) Passbook account where the only possible electronic fund transfers are preauthorized credits. If you bring your passbook to us, we will record any electronic deposits that were made to your account since the last time you brought in your passbook. S E C T I O N A(9)— D I S C L O S U R E O F R I G H T T O STOP P A Y M E N T OF PREAUTHORIZED T R A N S F E R S , P R O C E D U R E F O R D O I N G SO, RIGHT T O RECEIVE NOTICE OF VARYING A M O U N T S , A N D F I N A N C I A L I N S T I T U T I O N ’S LIABILITY F O R F A I L U R E T O S T O P P A Y M E N T (§ 205.7(a)(6), (7), and (8)) (a) Right to stop payment and procedure for doing so. If you have told us in advance to make APPENDIX A REGULATION E regular payments out of your account, you can stop any of these payments. Here’s how: Call us at [insert telephone number], or write us at [insertaddress], intime for us to receive your request 3 business days or more before the payment is scheduled to be made. If you call, we may also require you to put your request in writing and get it to us within 14 days after you call. (We will charge you [insert amount] for each stop-payment order you give.) (b) Notice of varying amounts. If these regular payments may vary in amount, (we) (the person you are going to pay) will tell you, 10 days before each payment, when itwill be made and how much itwill be. (You may choose instead to get this notice only when the payment would differby more than a certain amount from the previous payment, or when the amount would falloutside certain limitsthat you set.) (c) Liability for failure to stop payment of preauthorized transfer. If you order us to stop one of these payments 3 business days or more be fore the transfer is scheduled, and we do not do so, we will be liable for your losses or damages. we do not complete a transfer to or from your account on time or in the correct amount according to our agreement with you, we will be liable for your losses or damages. However, there are some exceptions. We will not be liable, for instance: • If, through no fault of ours, you do not have enough money in your account to make the transfer. • If the transfer would go over the credit limit on your overdraft line. • If the automated teller machine where you are making the transfer does not have enough cash. • If the (terminal)(system) was not working properly and you knew about the breakdown when you started the transfer. • If circumstances beyond our control (such as fire or flood) prevent the transfer, despite reasonable precautions that we have taken. • There may be other exceptions stated in our agreement with you. S E C T I O N A(10)— D I S C L O S U R E O F F I N A N C I A L I N S T I T U T I O N ’S LIABILITY F O R FAILURE T O M A K E TRANSFERS (§ 205.7(a)(8)) (a) Liability for failure to make transfers. If 26 R EGULATIO N E APPENDIX B FEDERAL E N F O R C E M E N T AGENCIES The following list indicates which Federal agency enforces Regulation E for particular classes of insti tutions. Any questions concerning compliance by a particular institution should be directed to the appropriate enforcing agency. National Banks Comptroller of the Currency Office of Customer and Community Programs Washington, D.C. 20219 APPENDIX B Federal Credit Unions Division of Consumer Affairs National Credit Union Administration 2025 M Street, N.W. Washington, D.C. 20456 Creditors Subject to Civil Aeronautics Board Director Bureau of Consumer Protection Civil Aeronautics Board Washington, D.C. 20428 State M e m b e r Banks Federal Reserve Bank serving the district in which the State member bank is located. Non member Insured Banks Brokers and Dealers Division of Market Regulations Securities and Exchange Commission Washington, D.C. 20549 Federal Deposit Insurance Corporation Regional Director for the region in which the nonmember in sured bank is located. Savings Institutions Insured by the FSLIC and Members of the F H L B System (except for Sav ings Banks insured by FDIC) The Federal Home Loan Bank Board Supervisory Agent inthedistrictinwhich the institutionislocated. Retail, Department Stores, Consumer Finance Companies, Certain Other Financial Institutions, and All Nonbank Debit Card Issuers Federal Trade Commission Electronic Fund Transfers Washington, D.C. 20580
@FedFRASER