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FEDERAL RESERVE BANK
OF M EW YORK
[
Circular No. 1 0 ,0 7 1 1
August 19, 1986
REGULATION E: PERIODIC STATEMENTS
BY CERTAIN PROYIOEMS OF EFT SERVICES
Comment Invited by October 10 on Proposed Amendments
To All Depository Institutions, and Others Concerned,
in the Second Federal Reserve District:
Following is the text o f a statem ent issued by the Board o f Governors o f the Federal Reserve
System:
The Federal Reserve Board has issued for public comment a proposal to amend its Regulation E,
Electronic Fund Transfers (EFT). The proposal would eliminate the periodic statement requirement for
providers of EFT services that do not hold consumer accounts, such as retailers, and would make other
changes to ensure consumer protections. Comment is requested by October 10.
The periodic statement requirements now imposed by the regulation may hamper the development
and growth of EFT systems that use the automated clearing house network, thereby limiting new EFT
services to consumers.
Under the proposed amendment to the regulation, the periodic statement requirement for service
providers would be eliminated. Instead, service providers would be required to furnish the detailed in
formation identifying each transaction to the financial institutions holding the consumers’ accounts for
inclusion on their periodic statement. In addition, other changes would be made to ensure consumer
protections and clarify the responsibilities of service providers and account holding institutions.
Printed on the follow ing pages is the text of the proposal, which has been reprinted from the
F ederal R egister,; com m ents thereon should be subm itted by O ctober 10, 1986, and m ay be sent to
our C om pliance Exam inations Departm ent.
E.
G
erald
C
o r r ig a n
,
President.
FED ERA L RESERVE SYSTEM
12 CFR Part 205
[Reg. E; Docket Mo. R-057S]
E lectronic Fund Transfers; S e rv ic e
P ro vid er Periodic S tatem ents
AGENOV: Board of Governors of the
Federal Reserve System.
a c t s @w : Proposed rule.
The Electronic Fund Transfer
Act (15 U.S.C. 1693 et seq.), implemented
by Regulation E, establishes the legal
framework for providing electronic fund
transfer (EFT) services to consumers. It
requires financial institutions to make
initial disclosures concerning the EFT
services they offer and provide periodic
account statements; limits consumer
liability for unauthorized EFTs; and
requires institutions promptly to
investigate and resolve consumers’
claims of EFT errors, for example.
Regulation E establishes specific
requirements for service-providing
institutions, such as retailers, that offer
EFT services by issuing to consumers
debit cards or other devices for
accessing checking or other deposit
accounts. It requires these service
providers to comply with almost all the
requirements of the act and regulation,
including sending consumers periodic
statements showing the EFTs made with
the access device.
Some service providers have asked
the Board to amend the regulation. They
express concern that, because of the
costs involved, the periodic statement
requirement impedes the growth of EFT
systems that use the automated clearing
house system to clear point-of-sale and
automated-teller-machine transactions,
and that the costs exceed consumer
benefits presently derived from the
periodic statements. The Board believes
that the requirement for periodic
statements from service providers may
well pose a barrier to the development
and widespread use of these POS/ACH
systems, thereby limiting new EFT
services to consumers. In addition, the
Board believes that consumer
protections can be ensured by other
means.
The Board proposes to amend
Regulation E to (1) eliminate the periodic
statement requirement for service
providers, (2) require instead that
service providers furnish the necessary
information to the financial institutions
holding the consumers’ accounts for
inclusion on their periodic statements,
and (3) make other changes to ensure
consumer protections and clarify the
responsibilities of service providers and
SUMMARY:
account-holding institutions.
Comments must be received on
or before October 10,1986.
a d d r e s s e s : Comments may be mailed
to William W. Wiles, Secretary, Board
of Governors of the Federal Reserve
System, Washington, DC 20551, or
delivered to the guard station at the
courtyard entrance to the Eccles
Building (Attention: Mail Services), on
20th Street between Constitution
Avenue and C Street NW., Washington,
DC between 8:45 a.m. and 5:15 p.m.
weekdays. All material submitted
should refer to Docket No. R-0578.
pates:
FOR FURTHER INFORMATION CONTACT:
Gerald P. Hurst (Senior Attorney) or
John C. Wood (Senior Attorney),
Division of Consumer and Community
Affairs, Board of Governor of the
Federal Reserve System, Washington,
DC 20551, (202) 452-3667. Regarding the
regulatory analysis, contact: Frederick J.
Schroeder (Economist), Division of
Research and Statistics, Board of
Governors of the Federal Reserve
System, Washington, DC 20551, (202)
452-2584. For Telecommunications
Device for the Deaf (TDD) users,
contact: Eamestine Hill or Dorothea
Thompson at (202) 452-3544.
SUPPLEMENTARY INFORMATION:
(1) Background
The Electronic Fund Transfer Act (15
U.S.C. 1693 et seq.), implemented by
Regulation E (12 CFR Part 205),
establishes the basic rights, liabilities,
and responsibilities of consumers who
use electronic"fund transfer (EFT)
services and of financial institutions
that offer such services. The act applies
to all types of EFT services provided to
consumers, including debits and credits
to consumers’ accounts through the
automated clearing house system,
automated teller machine transactions,
and point-of-sale debit card
transactions.
Although the act is directed
principally at financial institutions that
hold consumers' accounts, the statute
also provides for other providers of EFT
services to be covered by the act and
implementing regulation. Provisions in
the Board’s Regulation E carry out this
statutory directive. The regulation
makes clear that its coverage applies not
only to the traditional financial
institution but also to “any person who
issues an access device and agrees with
a consumer to provide electronic fund
transfer services” (section 205.2(i)). Such
persons may contract with consumers,
for example, to provide them with ATM
or POS transaction capability, telephone
bill payment, or home banking services.
2
In some cases the service-providing
institution will, for example, issue both
a debit card and personal identification
number (PIN) to the consumer for
initiating transfers. In other cases, the
service provider may allow the
consumer to use a card issued by the
consumer’s account-holding institution
or by some other entity.
Section 205.14 of Regulation E requires
that service providers comply with all
requirements of the act and regulation
that relate to the service or to EFTs
made by the consumer under the
service. This includes compliance with
the initial and periodic disclosure
requirements, the limitations on
consumer liability, and the error
resolution procedures. The account
holding institution, on the other hand,
currently has no responsibilities under
the regulation with respect to EFTs
initiated through the service provider,
except to cooperate with the service
provider’s investigation and resolution
of errors.
In the past year, the Board has
received numerous inquiries (from
representatives of both account-holding
financial institutions and current and
prospective service providers) about the
specific responsibilities of service
providers under Regulation E. Much of
the interest results from changes taking
place in EFT services—specifically, the
growing interest in using the automated
clearing house system (ACH) to process
ATM and POS transactions. In fact, the
National Automated Clearing House
Association (NACHA) has amended its
rules to facilitate use of the ACH for
processing POS and ATM transactions,
and has specifically requested that the
Board amend Regulation E to make it
consistent with the NACHA rules.
Those NACHA amendments—
scheduled to take effect in early 1987—
require account-holding financial
institutions participating in the ACH to
identify POS/ACH transactions on their
periodic statements in accordance with
Regulation E. To facilitate compliance
with this provision, the revised NACHA
rules will also require institutions
initiating the transfers to include in the
ACH messages the information needed
by account-holding institutions to
comply with Regulation E.
Use of the ACH to process POS and
ATM transactions enables persons
wishing to provide EFT services to
consumers to do so without entering into
a specific agreement with each accountholding institution on which they may
be collecting funds. If a service provider
does not have direct access to the ACH
for clearing transactions, it can contract
with a financial institution to process
the transactions on its behalf.
$ Periodic Statement Requirement
-The inquiries received by the Board
about the responsibilities of service
providers, have focused primarily on
periodic statement requirements.
Regulation g requires that periodic
statements be sent to consumers at least
monthly if EFTs occurred on their
accounts, and at least quarterly if no
transfers occurred.
Some industry representatives have
expressed concern that requiring a
periodic statement from service
providers is hampering the development
of POS/ACH services. They favor
eliminating the requirement. They say
that the associated costs are high, that
the information on the service-provider’s
statement duplicates that given by the
account-holding institution, and that
getting two statements can even be
confusing to the consumer.
Other institutions have complained
that service providers are not giving
periodic statements, and oppose
elimination of the requirement. They
argue that eliminating the serviceprovider statement will result in a
reduction of consumer protection, will
give a competitive advantage to service
providers, and will mean increased
costs for account-holding institutions.
The Board on several occasions has
exercised its rulemaking authority under
the EFTA in response to concerns that
compliance costs related to a particular
regulatory provision exceeded the
benefits accruing from it; that the
regulation resulted in high compliance
costs for small institutions; and that a
regulatory requirement might inhibit
evolving services. The possible
elimination of the periodic statement
requirement involves some of the same
types of considerations. In particular, it
involves the weighing of the costs and
benefits of a regulatory requirement and
of the effect that the requirement might
have on the development of an EFT
service.
(3) The Cost of the Service-Provider
Periodic Statement
The cost to service providers of
furnishing a periodic statement for POS/
ACH transactions appears to represent
a potential obstacle to widespread
development of POS/ACH systems.
Industry representatives estimate the
cost to a company that is currently
preparing periodic statements—for
example, for credit card accounts—at
approximately 30 cents per statement.
For service providers that do not
currently issue periodic statements, such
as grocery stores, they say the costs
would be even higher—an estimated 50
to 75 cents per statement, assuming a
large statement volume. {The figure is
the per-statement cost only, not
including the start-up costs.) These
companies would contract with a third
party, such as a bank or credit card
processor, to prepare the periodic
statements.
One advantage of the POS/ACH
approach is that it provides a means of
offering consumers EFT services at a
low cost However, some claim that the
cost advantage of the POS/ACH
approach disappears if the service
provider, such as the retailer, is required
to furnish a periodic statement.
(4) The Need for the Service-Provider
Statement
The parties that favor eliminating the
periodic statement requirement Save
suggeted that consumers are, or could
be, confused by receiving two
statements. The periodic statement sent
by the service provider likely will cover
a different time period than the one
issued by the accout holder. As a result,
some transactions will probably not
match those listed on the statement from
the account-holding financial institution.
The information also will be different.
For example, the transaction date on the
service provider’s statement will be the
date the consumer made the transaction,
while the date on the account-holding
institution’s statement will be the date
the transaction is posted to the
consumer’s account. However, whether
consumers would be confused by these
discrepancies is unclear. Most
consumers are probably familiar with
statement cycles and may understand,
for example, that a transaction made on
a specific date may not show up on their
statement for the month in which it was
made.
" Those requesting elimination of the
statement requirement also claim that
the periodic statement given by the
service provider furnishes no additional
information or protection to the
consumer. Although this may be true in
some cases, the Board believes that
eliminating the periodic statement
requirement for service providers—
without making other changes to the
regulation to provide this information to
consumers—could result m some
consumers not receiving important
information that Is currently required by
Regulation E. For example, the
statement from the account-holding
financial institution may lack a full
description of the EFTs, such as the
terminal location or the name of the
party to or from whom funds were
3
transferred, information that currently is
required only on the statement from the
service provider. Other information not
duplicated on the account-holding
institution’s statement is the service
provider's telephone number and
address (to be used by the consumer to
inquire about EFTs or allege an error).
(5) Feasibility and Effect of Regulatory
Changes
The Board is proposing to require
account-holding financial institutions to
provide the transaction identification
information on their periodic statements.
Representatives of account-holding
institutions suggest that eliminating the
service provider periodic statement and
requiring account-holding institutions to
comply with the transaction
identification requirements will increase
their periodic statement and customer
service costs. They believe that these
higher costs will result from operational
changes and from increased inquiries
and requests for resolution of errors.
The Board believes it is unclear
whether the proposed changes would
result in substantial costs for account
holding institutions. Many account
holding institutions currently provide
periodic statements that identify
consumers’ POS/ACH transactions in
accordance with Regulation E. In
addition, the Board believes that most
financial institutions are capable of
providing descriptive transaction
information for POS/ACH transactions
on or with periodic statements at small
additional costs. (The regulation allows
institutions to comply with the
transaction identification requirements
by providing the information on
documents accompanying the periodic
statement; thus, institutions may be able
to comply with the proposed change
without making major operational
changes. See footnote 4 to § 205.9(b)(1).)
An increase in POS/ACH transactions
activity could of course lead to an
account-holding institution’s receiving
increased customer service inquiries.
The Board believes, however, that
eliminating the service provider
statement requirement, and requiring the
account-holding institution to furnish the
transaction identification information on
its statement, should not, by itself, result
in significantly increased inquiries and
costs. Regardless of whether the
consumer receives a periodic statement
from the service provider, because the
transactions appear on the statement
from the account-holding institution (if
only as debits), some consumers will
probably direct questions to the
account-holding institution in any case.
Moreover, under the existing
regulation the account-holding
institution is not responsible for
resolution of any alleged errors related
to these POS/ACH transactions. This
has been and would continue to be the
responsibility of the service provider. In
fact, under the proposal the service
provider would remain subject to all of
the regulatory requirements except that
of providing a separate periodic
statement. In addition, the account
holding financial institution would
continue to have very limited
responsibilities with respect to the
transfers resulting from the POS/ACH
transactions. The clarification of these
points (and suggested changes to the
regulation relative to disclosures by the
service provider) should address the
concerns regarding increased inquiries
to account-holding institutions. These
clarifications should also avoid any loss
of consumer protection.
The Board is concerned about the
possibility that the effects of these
changes on some account-holding
institutions may be substantial, and is
also sensitive to the claim by some
institutions that the proposed changes
may result in a competitive advantage
for service providers. Furthermore, some
of the institutions that would be affected
are small financial institutions. Many of
them are currently exempt from
compliance with Regulation E because
of an exemption for institutions with
assets of less than $25 million,
applicable to preauthorized EFTs such
as payroll deposits and monthly
payments of insurance premiums. The
Board believes that undue burdens
should not be placed on these
institutions.
The Board would like comment
specifically on the following:
° The nature and the amount of the
costs that would be imposed on
account-holding institutions by the
proposed changes.
0 The reasons for the belief that the
proposed changes would result in a
competitive advantage for service
provider^.
0 The possible effects of the proposed
changes on small institutions that are
currently exempt from Regulation E.
0 The costs that are, or would be,
incurred by service providers to provide
periodic statements to consumers.
° The possible effects of the Board's
eliminating the periodic statement
requirement (as w ell as the possible
effects of the Board’s failing to take such
action) on account-holding institutions,
service providers, and consumers.
(6) Discussion of Proposed Changes
Based on the foregoing, the Board
proposes to make the following specific
changes to Regulation E:
1. Eliminate the periodic statement
requirement for service providers, on the
condition that they furnish the
transaction information to the account
holding financial institution in a form
that will allow the latter to include it on
or with the periodic statement given to
the consumer.
The costs associated with the
furnishing of periodic statements by
service providers appear to exceed the
benefit to consumer resulting from the
requirement. In many cases the
information is duplicative of information
appearing on the statement already
provided by the account-holding
institution. Other changes recommended
below should ensure that the
elimination of this requirement will not
result in a significant loss of consumer
protections.
2. Require the account-holding
institution to furnish the transaction
identification information to the
consumer on or with its own periodic
statement.
The effect of this proposed change on
most account-holding institutions should
not be substantial. Many account
holding institutions currently provide
statements that identify POS/ACH
transactions in conformity with
Regulation E requirements. Moreover,
the changes to the NACHA rules
scheduled to take effect in early 1987
would require certain other institutions
to do so. Also, the regulation allows
institutions to provide the information
on documents accompanying periodic
statements, which means that major
operational changes may not be
necessary. However, because of concern
about the effects the proposed changes
might have on some account-holding
institutions—in particular small
financial institutions—'the Board
specifically requests comment, as noted
above, about the costs they would incur
if the proposed changes are adopted.
3. Require the service provider to
furnish the consumer with the address
and telephone number to be used for
inquiries by—
(a) Printing the information on
receipts furnished with each transaction,
or
(b) Providing the consumer with a
quarterly notice of this information.
It is important for the consumer to
have the address and telephone number
of the service provider. In is proposed
change would ensure that consumers
receive this information on an ongoing
4
basis, even though the service provider
would no longer be providing the
information on a periodic statement. The
service provider would have the option
of choosing one method or the other.
4. Modify the initial disclosure
requirements applicable to service
providers to require that they disclose to
the consumers, at the time they issue the
access device-r(a) That because no periodic
statements w ill be issued summarizing
transactions made with the access
device, the consumer should retain all
receipts to verify the accuracy of
statements furnished by the account
holding institution,
(b) That the consumer should report
the loss or theft of the access device to
the service provider, immediately (and if
the card used as the access device w as
issued by the account-holding institution
or another entity, that the consumer
should notify both the service provider
and the card issuer), and
(c) That all inquiries relating to
transactions initiated through the
service provider by use of the card must
be made to the service provider.
These disclosures are necessary to
ensure that the consumer knows which
institution to contact with respect to
questions abopt transactions made
through the service provider, and to
minimize the number of inquiries that
w ill be directed to the. account-holding
institution.
5. Extend the time allow ed to the
consumer for notifying the service
provider of the loss or theft of an access
device and for error allegations in those
cases when notice is delayed due to the
consumer’s having notified the account
holding institution, or another party, in
error.
Situations involving EFT services by
persons other than the account-holding
institution inevitably result in some
consumer confusion about who should
be notified regarding an error or loss or
theft of an access device. Currently, the
regulation provides for an extension of
the time period available to the
consumer for alleging errors in such
cases. The proposed change would
provide for similar extensions of time
for notification of loss or theft of an
access device.
In accordance with section 3507 of the
Paperwork Reduction Act of 1980 and 5
CFR 1320.13, the proposed revisions to
Regulation E that pertain to third party
disclosures w ill be submitted as
appropriate to the Board for review
(under authority delegated to the Board
by Office of Management and Budget)
after consideration of the comments
received during the 60-day comment
period.
(7) Hsgialatary Analysis
The proposed amendments would
change the way in which documentation
is provided to consumers by requiring
that account-holding institutions provide
all the required information. A consumer
'would receive all the required periodic
statement documentation directly from
the financial institution holding the
account from which the funds were
debited. Service providers would be
required to furnish to account-holding
institutions all the transaction
information necessary for proper
documentation. Furthermore, service
providers would be required to inform
consumers of the telephone number and
address they should use to report errors
or lost or stolen debit cards.
Consumers would receive no less
information under the proposed
amendments than under the present
rule. Moreover, some consumer
confusion could be reduced as
duplicative disclosures are eliminated.1
If the proposal is adopted, account
holding institutions may incur increased
costs from having to include additional
information in periodic statements. The
amendments are not expected to lead to
a significant increase in the number of
periodic statements that account holding
instititions deliver to consumers,
however, because most institutions
already provide periodic statements for
transaction accounts.
The cost burden of providing the
additional information is not likely to be
great for account-holding institutions as
a group. Most point-of-sale (POS)
transactions involve accounts at
financial institutions that already are
able to comply with the periodic
statement requirements of the act and
regulation. The economic burden for
each institution would depend on its
ability to disclose the required
information on or with periodic
statements, and some institutions would
have to devote additional resources to
data processing and perhaps to error
resolution. The aggregate economic
burden on account-holding institutions
is thought to be negligible.
For service-providing institutions
(such as supermarkets, gasoline
retailers, and other merchants) that
issue debit cards but do not hold
consumer accounts, the cost savings
1 Disclosures and other consumer rights in EFT do
not appear to be a problem for consumers.
Available evidence suggests that consumers are
satisfied with their EFT accounts. The number of
account errors and unauthorized transfers is
negligible both in absolute terms and relative to the
volume of EFT transactions occurring in the
payments system.
would be substantial. This is so because
the amendments would make the
clearing of POS transactions through the
automated clearing house (ACH) more
attractive. The greatest economic
benefit of the proposed amendments
would arise in the future as the volume
of POS transactions increases. It is
likely that more institution (i.e.,
retailers) would be able to justify
allowing consumers to make POS
transactions if the amendments arc
adopted, and that more access devices
would be issued to consumers. It is also
believed that adoption of the
amendments would have a salutary
effect on the evolution of the payments
system by reducing the average systemwide compliance cost per POS
transaction.
There are obvious cost advantages to
retailers in choosing the ACH method of
clearing. It has been estimated that
clearing a POS transaction indirectly
through the ACI I system costs about 20
cents at the margin, including the costs
of fraud and float. Clearing a POS
transaction directly (on-line) from a
consumer account costs a retailer about
50 cents at the margin.
This economic advantage is reduced
by Regulation E if the retailer has to
provide periodic statements to its card
holders. Estimates of the cost of
producing a periodic statement vary
from a minimum of about 30 cents at the
margin to a maximum of about 75 cents
at the margin, although the average cost
per transaction will depend on the
number of transactions a consumr
makes per month with the retailer.
Assuming that the consumer makes only
one transaction per month, the retailer’s
total cost for that consumer would be at
least 50 cents: 20 cents to clear, and 30
cents for the statement. Even if the
consumer makes several transactions
per month , the cost advantage of ACH
clearing to the retailer is partly offset by
periodic statement costs, and is less
than it would be if the proposed
amendments were adopted.
The Board has long advocated the use
of the nation’s automated clearing house
network as a cost-saving alternative to
paper check transactions. Point-of sale
transactions cleared through the ACH
system are functionally no different
from paper checks and have the
potential to generate cost savings by
displacing paper checks. To the extent
that the proposed amendments reduce
the cost to merchants of offering
electronic point-of-sale transactions,
these transactions could displace
payments by paper checks at point of
sale and thereby reduce the overall
costs to society of operating the
payments system.
5
Significant progress toward
standardization of electronic debit and
credit items has been made. In early
1987, new NACHA rules will require all
financial institutions that participate in
the ACH to identify point-of-sale
transactions in accordance with the
requirements of Regulation E. This
development ensures that electronic
items originated through the ACH
include all information required for
account-holding institutions to make
periodic statement disclosures in
compliance with Regulation E.
There is no indication that small
financial institutions as a group would
be unduly disadvantaged by the
proposed amendments. Many small
institutions, because they already
participate in ACH direct deposit
programs or automated teller machine
networks, currently are able to comply
with the periodic statement
requirements of the act and regulation. It
is possible, however, that certain small
institutions could face substantially
greater compliance costs as a result of
the proposed amendments. Currently,
pre-authorized transfers to or from a
small institution (one with assets of $25
million or less) are exempt from the
periodic statement requirements of the
act and regulation. The proposed
atnendments would place some
additional compliance burden on these
exempt institutions by requiring that
they send complying periodic statements
to consumers who have POS debit
transactions posted to their accounts.
For certain small institutions, this
burden could be substantial if the
method of producing periodic
statements had to be fundamentally
changed.
A couple of factors would appear to
mitigate this concern. First, any POS
debit item received over the ACH
system by a small financial institution
would contain all the necessary
information needed to post the item to
the consumer's account. Second, small
institutions not currently able to
disclose the required information with
their periodic statements likely can get
assistance at reasonable cost from their
correspondent banks or from service
bureaus that specialize in data
processing applications for small
financial institutions. The Board solicits
data on the cost to financial institutions,
both large and small, of complying with
the proposed amendments to the
regulation.
In summary, with the proposed
amendments the payments system as a
whole is likely to realize significant cost
savings as electronic point-of-sale
transactions increase in volume and
relative importance. Consumers are
likely to benefit from lower transaction
costs and increased efficiency in the
payment system as the volume of
electronic point-of-sale transactions
increses. Moreover, with the proposed
amendments, there would be no loss of
consumer protections ensured by the
act.
List of Subjects in 12 CFR Part 205
Banks, banking, Consumer protection,
Electronic fund transfers, Federal
Reserve System, Penalties.
(8) Regulatory Text.
Certain conventions have been used
to highlight the proposed revisions. New
language is shown inside bold-faced
arrows, while language that would be
removed is set off with brackets.
Pursuant to the authority granted in
section 904 of the Electronic Fund
Transfer Act, 15 U.S.C 1693b, the Board
proposes to amend Regulation E, 12 CFR
Part 205, as follows:
PART 205—[A^EMDED]
1. The authority citation for Part 205
continues to read as follows:
Authority: Pub. L. 95-630, 92 Stat. 3730 (15
U.S.C. 1693b).
2. Section 205.14 is amended by
revising paragraph (a)(2) and the portion
of paragraph (b) beginning with the last
phrase of the introductory text to read
as follows:
§ 205.14 Services offered by financial
institutions not holding consumer's
account.
(a) * * *
(2) e>(i)<i Sections 205.7, 205.8, and
205.9 shall require the service-providing
institution to provide those disclosures
and documentation that are within its
knowledge and the purview of its
relationship with the consumer.
E>(ii) the service-providing institution
need not furnish a periodic statement to
the consumer under § 205.9(b), but shall
instead
(A) Provide the transaction
information to the account-holding
financial institution, identifying each
transaction in accordance with
§ 205.9(b)(1);
(B) Furnish the consumer with the
address and telephone number to be
used for inquiries and for reporting the
loss or theft of the access device or
unauthorized transfers appearing on
periodic statement by:
(1) Printing the information on receipts
furnished with each transaction, or
(2) Providing the consumer with a
quarterly notice of this information;
(C) Disclose to the consumer at the
time of issuing an access device
(1) That it will not be furnishing
periodic statements summarizing
transactions, and that the consumer
should retain all receipts to verify the
accuracy of the statement received from
the account-holding financial institution,
(2) That the consumer should notify
the service-providing institution at once
of the loss or theft of the access device,
and, if the access device is a card issued
by another institution, that the consumer
should notify the card-issuing institution
as well, and
(2) That all inquiries relating to
transaction with the service-providing
institution must be made to the serviceprovider; and
(D) Extend by a reasonable time the
time periods within which notice must
6
ft
be received concerning loss or theft of
an access device or of unauthorized
transfers appearing on a periodic
statement, or concerning an error, if a
delay in notifying the service-providing
institution was due to the fact that the
consumer initially notified or attempted
to notify the account-holding
institution. <3
* * * * *
(b) * * *
except that the account-holding
institution shall comply with^-.o
[section 205.11 by—]
►(1) Section 205.9(b), by including on
its periodic statement the information
required by paragraph (b)(1) for each
transaction from the service-providing
institution debited or credited to the
account during the cycle, o
[(1)] e>(2) Section 205.11 by (i)o
Promptly providing, upon the request of
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)]t>(ii)o Honoring debits to the
account in accordance with section
205.11(f)(2).
i>(3) An account-holding institution
has no liability for failure to provide the
information required by paragraph (b)(1)
of this section if the failure is due to its
not having received from the service
providing institution the information
necessary for compliance.-^
* * * * *
By order o f the Board o f G overnors o f the
F ederal R eserve System , August 4,1986.
James McAfee,
Associate Secretary of the Board.
(FR Doc. 86-17862 Filed 6-7-86; 8:45 am]
@FedFRASER