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< FEDERAL RESERVE BANK OF NEW YORK [ Circular No. 9265 March 25, 1982 ~| REGULATION E — ELECTRONIC FUND TRANSFERS Proposed Amendments To All Depository Institutions in the Second Federal Reserve District: Following is the text of a statement issued by the Board of Governors of the Federal Reserve System: The Federal Reserve Board has proposed for public comment four amendments to its Regulation E — Electronic Fund Transfers — to assist small financial institutions subject to the Electronic Fund Transfer Act and otherwise reduce the burden of compliance. By the use of electronic transfer services, payments may be made for goods or services and withdrawals and deposits may be initiated electronically rather than by check. The proposed amendments would: 1. Exempt from requirements of Regulation E transactions involving direct deposits made by the Federal Govern ment into accounts at financial institutions with $15 million or less in assets. This exemption would cover only direct Federal deposits to individual accounts in such institutions, such as deposits of interest, wage and salary and benefit payments to individuals. The proposed exemption would make no change in the requirements for financial institutions to make direct Federal deposits promptly available to the consumer. 2. Make an exception in certain cases from the Regulation E requirement that a financial institution must identify, on the receipt provided by an EFT terminal, the type of account (such as savings or checking account) from which the funds were transferred. The exemption would apply to transfers made through an automated teller machine (ATM) that is part of a nationwide cash dispensing service. The Board was asked to make this exception on the grounds that the consumer can make use of only one type of account in such a transaction and that when the transaction is made through an ATM used by many financial institutions the ATM is not capable of providing the information on the receipt. The Board has previously made a similar exception applicable to point of sale transactions. 3. Allow an institution that permits customers to make transfers by telephone between savings and checking accounts to produce a monthly record of the transaction only on the customer’s checking account statement. At present the record of such a transaction must be provided on monthly statements of the customer’s savings and check accounts. The customer would continue to get a report of such transactions on the monthly checking account statement while savings account passbooks or statements would continue to be updated in keeping with the institution’s normal practice. 4. Allow banks participating in programs in which fund transfers are initiated by debit cards used in ATMs in foreign countries to comply with requirements for recording the transaction and for error resolution different from those applying to transactions in the United States. This would take account of differing operational capabilities of ATMs in use in the United States and other countries and of the time required to obtain from abroad information necessary to settle error allegations. The Board’s proposals are stated in detail in the attached notice. Enclosed — for depository institutions in this District — is the text of the proposed amendments. It will be published in the Federal Register, and will also be furnished upon request directed to our Circulars Division (Tel. No. 212-791-5216). Comments on the proposed amendments should be submitted by May 7, 1982 and may be sent to our Consumer Affairs and Bank Regulations Department. A nthony M. S olomon , President. FEDERAL RESERVE SYSTEM [12 CFR Part 205] [Req. E; Docket No. R-0388] ELECTRONIC FUND TRANSFERS Exemptions Documentation of Transfers Procedures for Resolvinq Errors AGENCY: Board of Governors of the Federal Reserve System. ACTION: Proposed rule. SUMMARY: The Board is publishing for comment four proposed amendments to Regulation E. The amendments would (1) exempt from the regulation preauthorized electronic fund transfers in it ia te d by the federal government to accounts at small financial i n s t i t u t i o n s ; (2) provide that in a regional or nationwide ATM interchange system, the terminal receipt need not disclose the type of account affected; (3) p a r t i a l l y exempt from the periodic statement requirements certain telephone transfers between a consumer's accounts held at the same i n s t i t u t i o n ; and (4) modify the documentation and error resolution requirements for transfers in iti a te d outside the United States. The Board is also publishing for comment an economic impact ana ly sis , as required by § 904(a) of the act. These proposals are in response to requests from financial i n s t i t u t io n s , and are designed to reduce regulatory burdens without giving up sign ifi cant consumer protection. DATE: Comments must be received on or before May 7, 1982. ADDRESS: Comments may be mailed to the Secretary, Board of Governors of the Federal Reserve System, Washington, D. C. 20551, or delivered to Room B-2223, 20th & Constitution Avenue, N. W., Washington, 0. C . , between 8:45 a.m. and 5:15 p.m. weekdays. Comments may be inspected in Room B-1122 between 8:45 a.m. and 5:15 p.m. weekdays. All material submitted should refer to Docket No. R-0388. FOR FURTHER INFORMATION: Regarding the regulation, contact: Barbara D. Ranagan, Staff Attorney, or John C. Wood, Senior Attorney, Division of Consumer and Com munity A f f a i r s , Board of Governors of the Federal Reserve System, Washington, D. C. 20551 (202-452-3667). Reqardinq the economic impact an a ly s is , contact: Frederick J . Schroeder, Economist, Division of Research and S t a t i s t i c s , Board of Governors of the Federal Reserve System, Washington, 0. C. 20551 (202-452-2584). SUPPLEMENTARY INFORMATION: (1) General. The major portion of the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.) and Regulation E went into effect on May 10, 1980. As discussed more f u l l y below, the Board now proposes certain amendments in response to petitions i t has received. 2 Section 904(a)(2) of the EFT Act requires the Board to prepare an analysis of the economic impact of the regulation that considers, among other things, the impact of the regulation on the various participants in electronic fund transfer systems, the effects upon competition in the provision of e l e c tronic fund transfer services among large and small financial i n s t i t u t io n s , and the a v a i l a b i l i t y of such services to different classes of consumers, p a r t ic u l a r ly low-income consumers. In addition, § 603 of the Regulatory F l e x i b i l i t y Act (5 U.S.C. 603) requires that proposed regulations be accompanied by an i n i t i a l regulatory f l e x i b i l i t y an a ly sis . The statement appearing in section (3) below s a t i s f i e s both of these requirements. The statement and the proposed amendments have been transmitted to Congress, as required by § 904(a)(4) of the EFT Act. The Board believes that an expedited rulemaking procedure is in the public i n te r e s t. Accordingly, the Board is providing a comment period shorter than the 60 days specified in the expanded procedures published by the Board in i t s policy statement of January 19, 1979 (44 FR 3957). (2) Regulatory provisions. Section 205.3(g) -- Preauthorized govern ment transfers To accounts at small financial i n s t i t u t i o n s . The EFT Act and Regulation E cover preauthorized electronic fund transfers to or from consumer asset accounts, whether the originator is government or private sector, whether the transfer is received in machine-readable or paper form, and whether the transfer is received d i re c t ly from an automated clearing house (ACH) or through a correspondent institution or other intermediary. This includes transfers (such as Social Security payments) under the federal government's recurring pay ments program because they are made by the U.S. Treasury through an ACH. Unlike the offering of other EFT services such as automated t e l l e r s erv ice , an in s t i t u t io n 's involvement in preauthorized government transfers is r e la t i v e l y passive. In the case of Social Security payments, for example, the customer takes the i n i t i a t i v e by completing a U. S. Treasury authorization form and delivering i t to the financial in st i t u t io n . The institution completes i t s portion of the form and sends i t on to the Social Security Administration, which then start s sending the funds di re c t ly to the i n s t i t u t io n . The i n s t i t u tion may agree to participate as an accommodation to the customer because this method of payment provides greater security to the recipient. Frequently a small in sti tution receiving federal recurring payments does not engage in electronic processing. It receives the transfers through a correspondent i n s t i t u t i o n , which sends a paper l i s t i n g of recipients and pay ment amounts to the account-holding i n s t i t u t io n , allowing i t to post the ac counts manually. The Board is concerned that there may be an undue compliance burden on these small i n s t i t u t i o n s , part icu la rly in cases where the transfers af fect r e la t i v e ly few accounts. Coverage by the regulation means that the institution must give i n i t i a l disclosures about the account terms, send certain additional disclosures and notices, maintain prescribed error resolution proce dures, and provide periodic statements or passbook updates in compliance with the regulation. 3 The Board has special authority with respect to the modification of regulatory requirements for small i n s t i t u t io n s ; § 904(c) of the EFT Act states in part: The Board shall by regulation modify the require ments imposed by this t i t l e on small financial in st it ut io ns i f the Board determines that such modifications are necessary to a l l e v i a t e any undue compliance burden on small financial i n s t i tutions and such modifications are consistent with the purpose and objective of this t i t l e . The Board is proposing to exercise this authority by amending Regulation E to exempt federal recurring payments that are made to an account at a financial in stitution whose assets are $15 million or l e s s . The $15 million asset level was selected because i t corresponds to an asset level used in another Board reg ulation that differ ent ia tes among inst itu tio ns based on asset s i z e . The Board s o l i c i t s comment on whether a different asset cut-off should be used, and on whether there is an asset size at which compliance would not be unduly burden some. The Board also notes that the level of burden imposed by Regulation E with respect to these transfers may not be a function of the financial i n s t i t u tion's asset size alone, and s o l i c i t s comment on what other factors might be taken into account in assessing the need for an exemption. Industry commenters should recognize, however, that the Board has a respon si bi lity to consider not only the costs and burdens on financial in st it ut io ns but also the costs and benefits to consumers. Comment is also requested on whether the exemption should apply to a broader (or to a narrower) class of preauthorized t rans fe rs. For example, should there be an exemption for all preauthorized t ra ns f er s , both government and private sector? The Board is aware that preauthorized transfers i n it ia te d by the private sector may create similar i f not greater operational problems for small financial in s t i t u t io n s . Under present ACH operating rules, however, an insti tut io n that agrees to accept private-sector preauthorized credits must also accept private-sector preauthorized debits, placing consumers at somewhat greater risk i f things go wrong. Comment is requested on whether the exemption might be expanded without reducing sig nificant consumer protections provided by the EFT Act and Regulation E. Financial institu tio ns are asked to include in th ei r comments infor mation about thei r asset s iz e , whether they currently receive both federal government and private sector t ra ns fe rs , and whether they offer other EFT services such as telephone b i l l payment or ATM service. The proposed amendment would exempt federal government payments from all requirements of the EFT Act and Regulation E. The Board s o l i c i t s comment on whether some provisions of the act or regulation should continue to apply -for example, the prohibition on compulsory use of EFT, found in § 913 of the act, or the error resolution procedures, set forth in § 205.11 of the regulation. Commenters should discuss the reasons they believe pa rticul ar provisions of this sort should (or should not) remain applicable, and the re lative d i f f i c u l t i e s and costs of compliance with the provisions in question. 4 The proposal, s t r i c t l y speaking, exempts a category of transfers and not the i n s t i t u t i o n . Thus, a small i nst itu tio n that wishes to offer telephone b i l l payment s er vi ce s, for example, may continue to take advantage of the exemption for i t s federal recurring payments, although the telephone transfers would be subject to the regulation. A small i nst itu tio n that offers no EFT services other than federal recurring payments, of course, would be completely exempt from the act and regulation. Proposed § 205.3(g)(1) sets forth the exemption, and sets December 31 of each year as the date for determining whether an i n s t i t u t i o n ' s assets exceed the $15 million l e v e l. The Board requests comment on whether some other deter mination date would be more appropriate. Proposed § 205.3(g)(2) provides a grace period for i ns ti tu tio ns that lose the exemption for preauthorized govern ment transfers because t he ir assets grow beyond the $15 million l e v e l. This grace period would allow time for bringing operations into compliance. Section 205.9(a)(3) -- Interchange cash dispensing se rv ic e . For transfers in it ia te d at an electronic terminal, Regulation E requires that the terminal receipt indicate the type of account accessed. A bank card organiza tion has requested that the Board grant an exemption from this requirement for use of debit cards in ATMs or cash dispensers in a planned nationwide cash d i s pensing system. Regulation E currently provides an exemption from the requirement to identify type of account for point-of-sale (POS) transfers in which the access device can access only one account at point of sale. The planned cash dispensing system apparently faces operational d i f f i c u l t i e s similar to those that led to the Board's adoption of the POS exception. As in the POS situation the consumer can access only one particular account in the interchange system. However, neither the debit card nor the interchange system, involving many different financial inst itu tio ns all over the country, can provide information on the terminal receipt regarding the type of account being accessed. The proposed amendment would revise the la s t sentence of footnote 3 to § 205.9(a)(3). The revision would treat transfers in iti a te d in an in te r change system the same as POS tran sfe rs. As in the case of POS tran sfe rs, the exemption would be available i f the access device used can access only one particular account when used in the interchange system. Si mi la rly , i t would remain available in the interchange setting even i f the access device can access more than one account when used at the account-holding i n s t i t u t i o n ' s own ATMs. "Interchange system" is intended to refer to a network or system in which ATMs or cash dispensers of various financial institu tio ns are available to customers of other i n sti tu tio ns to allow them access to their accounts. The Board s o l i c i t s comment on whether this terminology adequately describes such a system. Section 205.9(c), (d), and (h) -- Telephone transfers between savings and checking accounts. Regulation E requires i n s t i t u t io n s , as a general rule, to provide a periodic account statement for each EFT-accessible account. Excep tions currently exist only for accounts accessible by preauthorized credits but 5 by no other type of electronic fund tra nsfers . The Board has been asked to create a new exception for certain accounts that are accessible by telephone transfers. An association of mutual savings banks has petitioned the Board to permit inst itu tio ns offering telephone transfers (between transaction and savings accounts, for example) to s a t i s f y the periodic statement requirements of § 205.9(b) by providing a complying statement for the transaction account, but not the savings account. The association believes that the duplicative statements currently required by the regulation are unnecessary for consumer protection and are unduly costly for in st itu t io ns to provide, that the telephone transfer service is beneficial to consumers, and that many in st it ut io ns that have offered the service either have discontinued i t or will be forced to do so because of the duplicative costs. Section 904(c) of the act authorizes the Board, in adopting regula tions to implement the act, to make such adjustments and exceptions as the Board believes necessary and proper. Section 904(a) directs the Board to consider and weigh the costs and benefits of the implementing regulations to inst itu tio ns and consumers, including the extent to which "additional docu mentation, reports, records, or other paper work would be required." The current requirement to produce periodic statements for both accounts affected by a telephone transfer may be one whose costs outweigh i t s benefits. Each telephone transfer currently appears, in e s s e n t i a l l y duplicate form, on the statement for each account affected. Documentation of the transfer on only one statement may be adequate, since the description shows not only the amount and date but also the type of transfer and type of account affected (for example, "telephone transfer from savings"). In addition, the customary forms of documentation ( e . g . , passbook updates or quarterly statements) would continue to be available to the consumer. Accordingly, the Board i s proposing to modify the periodic statement requirements by adding a new paragraph (h) to § 205.9. The proposed paragraph states that an in sti tution need not provide a periodic statement for an account accessible by telephone transfers between accounts, so lonq as statements complying with § 205.9(b) are being provided for the other account involved in the service. To qualify for this exception, both accounts must be maintained at the same in sti tution and be held by the same consumer; in addition, the account for which a complying statement is not provided would have to be acces sib le by telephone transfers but by no other type of electronic tra nsfer. The proposal would also amend § 205.9(c) and (d) by adding a footnote to the effect that an account qu a lifi es for the special treatment provided in paragraphs (c) and (d) even i f the account is accessible by telephone transfers of the type described in paragraph (h) in addition to preauthorized c re d i t s. Sections 205.9 (i ) and 205.11(c)(4) -- Foreign-initiated t r a n s f e r s . The EFT Act applies to financial i nst itu tio ns holding consumer accounts within the United States and i t s t e r r i t o r i e s . Although an ATM cash withdrawal may be in it ia te d abroad, i t is covered by the act and Regulation E i f i t ultimately debits a consumer account at a U.S. bank. Several bank associations have 6 asked the Board to exempt electronic fund transfers i ni tia te d outside the United States. In the a lt er na ti ve , they ask that such transfers be exempted from certain portions of the documentation and error resolution requirements. Many foreign ATMs do not comply with Regulation E receipt require ments, nor do they necessarily capture the information that enables the IJ, S. bank to describe the transaction on periodic statements in keeping with the Regulation E requirements. The f a il u re to capture certain information also makes i t d i f f i c u l t for a U. S. bank to investigate a consumer's allegation of error and to comply with the s t r i c t time periods for error resolution specified in the regulation. The Board recoqnized the same type of problem in the credit card environment, and provided r e l i e f by relaxing the periodic statement requirements in Regulation Z (Truth in Lendinq) with reqard to the description of foreign transactions. Similar recognition of the problems with foreign EFT transactions seems appropriate, and the Board is proposinq to modify certain requirements. The f i r s t proposed amendment would add a new paragraph (i ) to § 205.9. It states that fa il u re to comply with the terminal receipt and periodic state ment requirements of § 205.9 is not a violation for a transfer in iti a te d abroad, provided the account-holding in sti tu tio n treats a request for documentation or c l a r i f i c a t i o n concerning the transfer as a notice of error and follows the error correction provisions of § 205.11. This means, for example, that i f the account holder requests documentation, the i nst itu tio n must provide i t as required by § 205.11(e). The other proposed amendment would add a new paragraph (4) to § 205.11(c). For alleged errors involving transfers i ni t ia te d outside the United States, the new paragraph would substitute a 90-calendar-day deadline for the 45-calendar-day deadline that is generally applicable. The other provisions of § 205.11 (including the requirement for provisional recrediting i f the resolution process takes longer than 10 business days) remain applicable. (3) Economic impact a n a l y s i s . Section 205.3(g). The Board propos to exempt from Regulation E all preauthorized federal recurring payments made to consumer accounts at financial i nst itu tio ns that have total assets of $15 million or le s s . The proposal is based on the preliminary findinq that small institu tio ns receiving such payments may bear a disproportionately large and undue regulatory compliance burden re lative to th ei r involvement in EFT. Many small i nst itu tio ns may be subject to Regulation E solely because they receive preauthorized federal recurring payments that were el e ct ro n ic a l ly i n i t i a t e d . These payments are primarily Social Security benefits that are credited to consumer accounts. The compliance costs incurred may be substan tia l. Institutions that receive only one or a few of those transfers and that engage in no other type of EFT must comply with a large proportion of Regula tion E requirements. Moreover, many small inst itu tio ns receive transfers in paper form from a correspondent bank, service bureau, or other intermediary and do not themselves engage in electronic processing. 7 Evidence currently available indicates that r e la t i v e l y few small institu tio ns offer EFT services other than automatic preauthorized transfers to or from consumers' accounts. Information is not available on the sizes of institu tio ns actually offering preauthorized t ra ns f er s , but the number of small in stitutions offering those transfers is large and l i k e l y to grow.JV The pro posed exemption would provide r e l i e f for the many small i n s t i t u t i o n s , including a large number of credit unions, that now participate in the Treasury Depart ment's Direct Deposit Program or that are expected to join the program in the next few years. Without the exemption, all inst itu tio ns would become subject to Regulation E by joining the program. The extent of the cost savings depends on the definition of small. The exemption could potentially provide sig nif ic ant cost savings to small institu tio ns by reducing their current compliance expenses and limiting their l i a b i l i t y exposure for noncompliance. If small i nst itu tio ns are defined to have total assets of $15 million or l e s s , the exemption would potentially affect 4,637 (or 31.4 percent of a l l ) commercial banks, 583 (or 14.6 percent of a l l ) savings and loan associations, 67 (or 9.2 percent of a l l ) mutual savings banks, and 17,243 (or 95.5 percent of a l l ) credit unions. Not a ll small in st it ut io ns would actually benefit, however. The amount of r e l i e f would be limited in that (1) not all small institu tio ns receive the exempted transfers and (2) those small inst itu tio ns that have already invested in compliance programs may find i t uneconomical to drop thei r programs, p a rt ic u la r ly when other EFT services are offered or planned. It is estimated that less than five percent of all U.S. transaction account deposit dollars would be exempted. If the proposed exemption were to be extended to private-sector preauthori?ed electronic t ra ns f er s , more r e l i e f would be available to small i n s t i t u t io n s . This would require exempting both debits and credits to consumer accounts, however, because debits and credits are operationally indistinguishable for ACH participants. The Board s o l i c i t s comment on the d e s i r a b i l i t y of a smal1-inst itut ion exemption of private-sector t ra ns f er s , including debits, from coverage by the regulation. Consumer benefits are not l i k e l y to be diminished s ig n if i c a n t ly by the proposed exemption. Many consumer protections provided by Regulation E are l i k e l y to be provided by U.S. Treasury rules, existing institutional prac t i c e s , and state laws. Furthermore, the likelihood of errors in these tra ns actions is very small. Consumers will benefit from increased a v a i l a b i l i t y of automatic preauthorized federal payments. 1/ In November 1981 there were 10,982 banks and 3,052-t h r i f t in stitutions participating in automated clearing houses (ACHs) and therefore engaging in electronic fund transfer, according to NACHA SurePay Update (Washington, D.C.: National Automated Clearing House Association), December 1981. Because almost all large in stitutions currently participate in ACHs, further growth in the number of participants will come primarily from small i n s t i tutions . - 8 - Public comment is requested on the potential effects of the proposed exemption on costs to i n sti tu tio ns and on costs and benefits to consumers. In p a r t ic u l a r , comment is requested on the appropriate asset level definition of small i n s t i t u t i o n . Comments should take into account the size level at which financial i ns ti tu tio ns are so automated or involved with other EFT services that the proposed exemption would provide l i t t l e r e l i e f . Section 2 05 .9( a) (3) . The Board proposes to exempt transfers made in an interchange system from the requirement that the financial in sti tu tio n identify the type of account accessed. This exemption, by removing a require ment that would be prohibitively costly to implement, is l i k e l y to remove a barr ier to the a v a i l a b i l i t y of national interchange services for consumers. Mo sig ni fi cant loss of information to consumers is expected from the exemption because only one of a consumer's accounts at a part icu la r i nst itu tio n can be accessed by this means. Section 205.9(c), (d), and ( h ). Some financial i n s t i t u t i o n s , in clu ding many mutual savings banks, permit telephone transfers between a consumer's accounts at the same i n s t i t u t i o n . Monthly statements are currently required for both accounts involved in telephone tran sfe rs. The Board proposes to amend the regulation so that i t would require a monthly periodic statement for only one of the two accounts involved in such a t ra n sf e r; for these tran sac ti ons , the other account would be exempted from Regulation E requirements. This amend ment is expected to reduce compliance costs s ig n if i c a n t ly for many i n sti tu tio ns and eliminate duplicative paperwork. There would be no loss of error resolution procedure protections. Evidence is s o l ic it e d on the number of i n s t i t u t io n s , accounts, transactions, and periodic statements affected and on the potential cost savings for financial i n s t i t u t io n s . Sections 205.9(i ) and 205.11(c)(4). The Board proposes to exempt all electronic fund transfers i ni t ia te d abroad from the regulation's terminal receipt and periodic statement documentation requirements. Financial i n s t i t u tions are unable to control terminals used by consumers abroad, and the proposed exemption would eliminate potential l i a b i l i t y for noncompliance with these re quirements. Error resolution time limits would also be relaxed to allow i n s t i tutions more time to investigate and resolve alleaed errors involving transfers in iti a te d abroad. The proposed exemption may make EFT services more accessible to IJ.S. consumers traveling abroad. There is no expectation that consumer protections would be s ig n if i c a n t ly reduced. Comment is requested on the a n t i c ipated effects on costs to i ns ti tu tio ns and benefits to consumers. (4) Pursuant to the authority granted in 15 U.S.C. 1693b, the Board proposes to amend Regulation E, 12 CFR Part 205, by addinq a new paragraph (g) to § 205.3, revising the la s t sentence of footnote 3 to § 205.9(a)(3), adding a new footnote 9a to § 205.9(c) and (d), adding new paragraphs (h) and (i ) to § 205.9, and adding a new paragraph (4) to § 205.11(c), as follows: 9 SECTION 205.3 -- EXEMPTIONS ★ * * * * (g) Government transfers to small financial i n s t i t u t i o n s . (1) preauthorized transfer by the federal government to an account i f the assets of the account-holding financial insti tut io n are $15 million or less on December 31. Any (2) If the account-holding financial i n s t i t u t i o n ' s assets subsequently exceed $15 millio n, i t s exemption for thi s class of transfers shall terminate one year from the end of the period in which the assets exceed $15 m illion. ★ * ★ * * SECTION 205.9 — DOCUMENTATION OF TRANSFERS (a) Receipts at electronic terminals.** * (3) The type of transfer and the type of the consumer's account (s).?/*** 3/***In a transfer i ni t ia te d at point of sale or at remote terminals in an interchange system, the type of account need not be identified i f the access device may access only one account in such a tra nsfer. * * * * * (c) Documentation for certain passbook accounts. In the case of a consumer's passbook account which may not be accessed by any electronic fund transfers other than preauthorized transfers to the account, 9a/ *** (d) Periodic statements for certain non-passbook accounts. If a consumer's account other than a passbook account may not be accessed by any electronic fund transfers other than preauthorized transfers to the account, _2£/*** 9a/Accounts that also are accessible by telephone transfers described in paragraph (h) of this section may continue to be documented in accordance with paragraph (c) or (d) of this section. * * * * * (h) Periodic statements for telephone t r a n s f e r s . A financial i n s t i tution need not provide the periodic statement required by paragraph (b) of this section for an account that may be accessed only by electronic fund transfers i ni t ia te d by the consumer under a telephone transfer plan, i f the telephone transfers are to or from an account for which the financial i nst itu tio n provides a periodic statement to the consumer in compliance with paragraph (b) of this section. 10 (i) Documentation for foreign-initiated t r a n s f e r s . Failure to provide the terminal receipt and periodic statement required b.v paragraphs (a) and (b) of thi s section for a particular electronic fund transfer shall not be deemed a fa il u r e to comply with this regulation, i f : (1) the transfer is not i ni t ia te d in a state as defined in § 205.2( k ) ; and (2) the financial i ns ti tu tio n treats an inquiry for c l a r i f i c a t i o n or documentation as a notice of error, and corrects the error in accordance with § 205.11. * * * • * • * SECTION 205.11 -- PROCEDURES FOR RESOLVING ERRORS ★ (c) ★ ★ ★ ★ Investigation of e r r o r s .*** • (4) If a notice of an error involves a*i electronic fund transfer that was not i n it ia te d in a state as defined in § 205.2(k), a financial i n s t i t u tion may take up to 90 calendar days instead of the 45 calendar days specified in paragraph (c)(2) of this section to resolve the error. ★ ★ * * * By order of the Board of Governors, March 22, 1982. (signed) William W. Wiles William W. Wiles Secretary to the Roard [SEAL]