Full text of Federal Reserve Bank of New York Circulars : Electronic Fund Transfers : Regulation E

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July 27, 1979

To the Addressee:

Enclosed is a copy of the new Regulation E pamphlet, "Electronic
Fund Transfers," effective March 30, 1979, of the Board of Governors of the
Federal Reserve System, as amended August 1, 1979.

Questions regarding

Regulation E should be directed to the Consumers Affairs and Bank Regulations
Department of this Bank (Tel. No. 212-791-5919).
Also enclosed, for those who have complete sets of the Board's
rules and regulations, is a revised table of contents.




Circulars Division
FEDERAL RESERVE BANK OF NEW YORK




BOARD OF GOVERNORS

of the
FEDERAL RESERVE SYSTEM

ELECTRONIC FUND TRANSFERS

REGULATION E
(12 CFR 205)
Effective March 30, 1979
as amended August 1, 1979

CONTENTS

Page
S e c . 205.1— A utho rity , P u r po se , a n d S cope ...............................................................................................

1

S ec . 2 0 5 .2 — D e f i n i t i o n s ..............................................................................................................................................

1

S e c . 2 0 5 .3 — E x e m p t i o n s ..............................................................................................................................................

2

S e c . 205.4— I ssu an ce o f

A ccess D e v i c e s ........................................................................................................

2

Sec. 2 0 5 .5 — Liability of Consumer for U nauthorized T ransfers ..................................................

4

S tatuto ry A p p e n d i x ......................................................................................................................................................

5

A ppendix A— M odel D isclosure Cl a u s e s .......................................................................................................

15

A ppendix B— F ederal E nforcement A g e n c ie s ..................................................................................

18

STATUTORY AUTHORITY

This regulation is issued under provisions of section 904 of the Electronic Fund Transfer Act, U.S.C.,
Title 15, sec. 1693 e t s e q .




REGULATION E
(12 CFR 205)

ELECTRONIC FUND TRANSFERS

SECTION 205.1—AUTHORITY,
PURPOSE, AND SCOPE

the consumer for the purpose of initiating elec­
tronic fund transfers.
(2)
An access device becomes an “accepted ac­
cess device” when the consumer to whom the ac­
cess device was issued:
(i) Requests and receives, or signs, or uses, or
authorizes another to use, the access device for
the purpose of transferring money between ac­
counts or obtaining money, property, labor, or
services;
(ii) Requests validation of an access device is­
sued on an unsolicited basis; or
(iii) Receives an access device issued in renewal
of, or in substitution for, an accepted access de­
vice, whether such access device is issued by the
initial financial institution or a successor.
(b) “Account” means a demand deposit (check­
ing), savings, or other consumer asset account
(other than an occasional or incidental credit bal­
ance in a credit plan) held either directly or indi­
rectly by a financial institution and established
primarily for personal, family, or household pur­
poses.
(c) “Act” means the Electronic Fund Transfer
Act (Title IX of the Consumer Credit Protection
Act, 15 U.S.C. 1601 e t s e q .) .
(d) “Business day” means any day on which
the offices of the consumer’s financial institution
are open to the public for carrying on substantially
all business functions.
(e) “Consumer” means a natural person.
(f) “Credit” means the right granted by a finan­
cial institution to a consumer to defer payment of
debt, incur debt and defer its payment, or purchase
property or services and defer payment therefor.

(a) Authority. This regulation, issued by the
Board of Governors of the Federal Reserve Sys­
tem, implements Title IX (Electronic Fund Trans­
fer Act) of the Consumer Credit Protection Act,
as amended (15 U.S.C. 1601 e t s e q .) .
(b) Purpose and Scope. In November 1978, the
Congress enacted the Electronic Fund Transfer
Act. The Congress found that the use of electronic
systems to transfer funds provides the potential
for substantial benefits to consumers, but that
the unique characteristics of these systems make
the application of existing consumer protection
laws unclear, leaving the rights and liabilities of
users of electronic fund transfer systems unde­
fined. The Act establishes the basic rights, liabili­
ties, and responsibilities of consumers who use
electronic money transfer services and of finan­
cial institutions that offer these services. This regu­
lation is intended to carry out the purposes of
the Act, including, primarily, the protection of
individual consumers engaging in electronic trans­
fers. Except as otherwise provided, this regula­
tion applies to all persons who are financial insti­
tutions as defined in § 205.2(i).
SECTION 205.2—DEFINITIONS
For the purposes of this regulation, the fol­
lowing definitions apply, unless the context indi­
cates otherwise:
(a)(1) “Access device” means a card, code, or
other means of access to a consumer’s account,
or any combination thereof, that may be used by




1

REGULATION E

§ 2 0 5 .3

SECTION 205.3—EXEMPTIONS

(g) “Electronic fund transfer” means any trans­
fer of funds, other than a transaction originated
by check, draft, or similar paper instrument, that
is initiated through an electronic terminal, tele­
phone, or computer or magnetic tape for the pur­
pose of ordering, instructing, or authorizing a fi­
nancial institution to debit or credit an account.
The term includes, but is not limited to, point-ofsale transfers, automated teller machine transfers,
direct deposits or withdrawals of funds, and trans­
fers initiated by telephone.
(h) “Electronic terminal” means an electronic
device, other than a telephone operated by a con­
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 belonging to a consumer. The term also
includes any person who issues an access device
and agrees with a consumer to provide electronic
fund transfer services.
Two or more financial institutions that jointly
provide electronic fund transfer services may con­
tract among themselves to fulfill the requirements
that the Act and this regulation impose on any
or all of them.
(j) “State” means any State, territory or posses­
sion of the United States, the District of Columbia,
the Commonwealth of Puerto Rico, or any polit­
ical subdivision of any of the above.
(k) “Unauthorized electronic fund transfer”
means an electronic fund transfer from a con­
sumer’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 elec­
tronic fund transfer (1) initiated by a person who
was furnished with the access device to the con­
sumer’s account by the consumer, unless the con­
sumer has notified the financial institution in­
volved that transfers 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 constitutes an error com­
mitted by the financial institution.




This regulation does 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
institutions or between businesses.
(c) Certain securities or commodities transfers.
Any transfer the primary purpose of which is the
purchase or sale of securities or commodities
through a broker-dealer registered with, or regu­
lated by, the Securities and Exchange Commission
or the Commodity Futures Trading Commission.
(d) Automatic transfers from savings to demand
deposit accounts. Any automatic transfer from a
savings account to a demand deposit (checking)
account under an agreement between a consumer
and a financial institution for the purpose of cov­
ering an overdraft or maintaining a specified mini­
mum balance in the consumer’s checking account
as permitted by 12 CFR Part 217 (Regulation Q)
and 12 CFR Part 329.
(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 pre­
arranged plan or agreement in which periodic or
recurring transfers are contemplated.
(f) Trust accounts. Any trust account held by a
financial institution under a b o n a f id e trust agree­
ment.
SECTION 205.4—ISSUANCE
OF ACCESS DEVICES
(a)
General rule. A financial institution may
issue an access device to a consumer only:
(1)
In response to an oral or written request or
application for the device;1 or
1In the case of a joint account, a financial institution
may issue an access device to each account holder for
whom the requesting holder specifically requests an access
device.
2

REGULATION E

§ 2 0 5 .4

(2) As a renewal of, o r in substitution for, an
accepted access device, w hether issued by the ini­
tial financial institution o r a successor.
(3) As a renew al of, or in substitution for, an
access device issued before F ebruary 8, 1979 (other
than an accepted access device, w hich can be re­
new ed or substituted under paragraph (a)(2) o f this
section), provided that the disclosures set forth in
paragraphs (d)(1), (2), and (3) o f this section ac­
com pany the renewal or substitute device; except
th a t fo r a renewal or substitution that occurs
before July 1, 1979, the disclosures m ay be sent
w ithin a reasonable tim e afte r the renewal or
substitute device is issued.
(b) Exception. N otw ithstanding the provisions
of paragraph (a)(1) of this section, a financial in­
stitution m ay distribute an access device to a co n ­
sum er on an unsolicited basis if:
(1) T he access device is not validated;
(2) T he distribution is accom panied by a com ­
plete disclosure, in accordance w ith paragraph (d)
of this section, o f the consum er’s rights and lia­
bilities th a t will apply if the access device is vali­
dated;
(3) T he distribution is accom panied by a clear
explanation that the access device is not validated
and how the consum er m ay dispose of the access
device if validation is not desired; and
(4) T he access device is validated only in re ­
sponse to the consum er’s oral or w ritten request
or application fo r validation and after verification
of the consum er’s identity by any reasonable
m eans, such as by photograph, fingerprint, per­
sonal visit, o r signature com parison.
A n access device is considered validated when a
financial institution has perform ed all procedures
necessary to enable a consum er to use it to ini­
tiate an electronic fund transfer.
(c) Relation to Truth in Lending. (1) T he A ct
and this regulation govern
(i) Issuance of access devices;
(ii) A ddition to an accepted credit card, as d e­
fined in 12 C F R 226.2(a) (Regulation Z), of the
capability to initiate electronic fund transfers; and
(iii) Issuance of access devices that perm it credit
extensions only under a preexisting agreem ent be­
tween a consum er and a financial institution to
extend the credit when the consum er’s account is
overdraw n o r to m aintain a specified m inim um
balance in the consum er’s account.




(2)
T he T ru th in Lending A ct (15 U.S.C. 1601
et seq.) and 12 C F R P art 226 (Regulation Z),
w hich prohibit the unsolicited issuance of credit
cards, govern
(i) Issuance of credit cards as defined in 12
C F R 226.2(r);
(ii) A ddition of a credit featu re to an accepted
access device; and
(iii) Issuance of credit cards th a t are also ac­
cess devices, except as provided in paragraph
(c)(l)(iii) of this section.
(d)
Transitional disclosure requirements. U ntil
M ay 10, 1980, a financial institution m ay satisfy
the disclosure requirem ents o f p aragraph (b)(2)
of this section by disclosing to the consum er, in
a w ritten statem ent th at the consum er m ay retain,
th e following term s in readily understandable
language:
(1) T he consum er’s liability u nder § 205.5, or
under oth er applicable law or agreem ent, fo r un­
authorized electronic fund transfers and, at the
financial institution’s option, notice of the advis­
ability of p ro m p t reporting of any loss, theft, or
unauthorized transfers.
(2) T he telephone num ber an d address o f the
person or office to be notified in the event the
consum er believes th at an unauthorized electronic
fu n d transfer has been or m ay be made.
(3) T he financial institution’s business days, as
determ ined under § 205.2(d).
(4) T he type of electronic fund transfers th at
the consum er m ay initiate, including any lim ita­
tions on the frequency or dollar am ount of the
transfers. T he details of the lim itations need n ot
be disclosed if their confidentiality is necessary
to m aintain the security o f the electronic fund
transfer system.
(5) A ny charges for electronic fund transfers
or for the right to m ake transfers.
(6) T he conditions under w hich the financial
institution in the ordinary course o f business will
disclose inform ation about the consum er’s account
to th ird parties.
(7) W hether o r not the financial institution
will provide docum entation of electronic fu n d
transfers, such as receipts or periodic statem ents,
to the consum er.
(8) W hether or not the financial institution has
erro r resolution procedures and, if so, a sum m ary
o f those procedures.
3

REGULATION E

§ 2 0 5 .5

(9)
T he conditions under w hich the financial
(ii) T he am ount o f unauthorized electronic
institution will assume liability fo r the institution’s
fu n d transfers that the financial institution es­
failure to m ake electronic fund transfers.
tablishes would not have occurred b u t fo r the
failure of the consum er to notify the institution
w ithin 2 business days after the consum er learns
SEC T IO N 205.5— L IA B IL IT Y O F C O N SU M E R
of the loss or theft of the access device, and that
F O R U N A U T H O R IZ E D T R A N SF E R S
occur after the close of 2 business days and before
notice to the financial institution.
(a) G eneral rule. A consum er is liable, w ithin
(2) If the consum er fails to rep o rt w ithin 60
the lim itations described in paragraph (b) o f this
days of transm ittal of the periodic statem ent any
section, for unauthorized electronic fund transfers
unauthorized electronic fund transfer that appears
involving the consum er’s account only if:
on the statem ent, the consum er’s liability shall
(1) the access device used fo r the unauthorized
not exceed the sum of
transfers is an accepted access device;
(i) T he lesser of $50 or the am ount o f un­
authorized electronic fund transfers that appear
(2) the financial institution has provided a
on the periodic statem ent or that occur during
m eans (such as by signature, photograph, finger­
print, o r electronic or m echanical confirm ation) to
the 60-day period, and
(ii) T he am ount of unauthorized electronic fund
identify the consum er to w hom the access device
was issued; and
transfers th at occur after the close of the 60 days
an d before notice to the financial institution and
(3) the financial institution has provided the
th at the financial institution establishes would not
following inform ation, in writing, to the consum er:
have occurred but for the failure of the consum er
(i) T he consum er’s liability under § 205.5, o r
to notify the financial institution w ithin that time.
under other applicable law or agreem ent, for un­
(3) P aragraphs (b)(1) and (2) of this section
authorized electronic fund transfers and, at the
m ay both apply in some circum stances. P aragraph
financial institution’s option, notice o f the advis­
(b)(1) shall determ ine the consum er’s liability for
ability o f prom pt reporting of any loss, theft, or
any unauthorized transfers th a t appear on the
unauthorized transfers.
periodic statem ent and occur before the close of
(ii) T he telephone num ber and address of the
the 60-day period, and paragraph (b)(2)(ii) shall
person o r office to be notified in the event the
determ ine liability fo r transfers th at occur after
consum er believes that an unauthorized electronic
fund transfer has been or m ay be made.
the close of the 60-day period.
(4) If a delay in notifying the financial insti­
(iii) T he financial institution’s business days, as
tution was due to extenuating circum stances, such
determ ined under § 205.2(d), unless applicable
as extended travel or hospitalization, the tim e
State law or an agreem ent between the consum er
periods specified above shall be extended to a
and the financial institution sets a liability limit
not greater than $50.
reasonable time.
(b) Limitations on amount of liability. T he
(5) If applicable State law o r an agreem ent
am ount o f a consum er’s liability for an unau th o r­
betw een the consum er and financial institution
ized electronic fund transfer or a series of trans­
imposes lesser liability than that provided in
fers arising from a single loss or theft o f the
paragraph (b) of this section, the consum er’s liabil­
access device shall not exceed $50 or the am ount
ity shall not exceed th at imposed under that law
of unauthorized electronic fund transfers that oc­
or agreem ent.
(c)
Notice to financial institution. F o r p u r­
cu r before notice to the financial institution under
paragraph (c) of this section, w hichever is less,
poses of this section, notice to a financial institu­
tion is given w hen a consum er takes such steps
unless one or both of the follow ing exceptions
as are reasonably necessary to provide the finan­
apply:
(1)
If the consum er fails to notify the financial cial institution with the pertinent inform ation,
w hether o r not any p articular officer, employee,
institution w ithin 2 business days after learning
or agent of the financial institution does in fact
of the loss o r theft of the access device, the con­
receive th e inform ation. N otice m ay be given
sum er’s liability shall not exceed the lesser of
to the financial institution, at the consum er’s op­
$500 o r the sum of
tion, in person, by telephone, or in w riting. N otice
(i) $50 o r the am ount of unauthorized elec­
in w riting is considered given at the tim e of
tronic fund transfers that occur before the close
receipt or. w hether or not received, at the exof the 2 business days, w hichever is less, and




4

STATUTORY APPENDIX

REGULATION E
I

legislation is unclear, leaving the rights and liabili­
ties of consum ers, financial institutions, an d inter­
m ediaries in electronic fund transfers undefined.
(b)
It is the purpose of this title to provide a
basic fram ew ork establishing the rights, liabilities,
and responsibilities of participants in electronic
fu n d tran sfer systems. T he p rim ary objective of
this title, however, is the provision o f individual
consum er rights.

piration of the tim e ordinarily required fo r trans­
mission, w hichever is earlier. N otice is also con­
sidered given w hen the financial institution be­
com es aw are of circum stances th a t lead to the
reasonable belief that an unauthorized electronic
fund transfer involving the consum er’s account
has been or m ay be m ade.
(d) Relation to Truth in Lending. (1) A con­
sum er’s liability fo r an unauthorized electronic
fund transfer shall be determ ined solely in ac­
cordance w ith this section if the electronic fund
transfer
(1) W as initiated by use of an access device
that is also a credit card as defined in 12 C F R
226.2(r), or
(ii) Involves an extension of credit under an
agreem ent betw een a consum er and a financial
institution to extend the credit w hen the con­
sum er’s account is overdraw n o r to m aintain a
specified m inim um balance in the consum er’s
account.
(2) A consum er’s liability fo r unauthorized use
o f a credit card th a t is also an access device but
th a t does n o t involve an electronic fund transfer
shall be determ ined solely in accordance with
the T ru th in Lending A ct and 12 C F R P art 226
(Regulation Z).

§ 903. Definitions

As used in this title—
(1) the term “accepted card or oth er m eans of
access” m eans a card, code, o r o th er m eans of
access to a consum er’s account fo r the purpose
of initiating electronic fu n d transfers w hen the
person to w hom such card o r other m eans of
access was issued has requested and received o r
has signed o r has used, or authorized another to
use, such card or other m eans of access fo r the
purpose of transferring m oney betw een accounts
o r obtaining money, property, labor, o r services;
(2) the term “account” m eans a dem and deposit,
savings deposit, or other asset account (other
th an 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 prim arily fo r personal,
fam ily, o r household purposes, b u t such term
ST A T U T O R Y A P P E N D IX
does n ot include an account held by a financial
institution p u rsu an t to a bona fide trust agree­
FINANCIAL INSTITUTIONS REGULATORY
m ent;
AND INTEREST RATE CONTROL
ACT OF 1978
(3) the term “B oard” m eans the B oard of G ov­
ernors o f the F ederal Reserve System;
PUBLIC LAW 95-630
(4) th e term “business day” m eans any day on
w hich the offices of the consum er’s financial in­
TITLE XX—ELECTRONIC FUND TRANSFERS
stitution involved in an electronic fund transfer
are open to the public for carrying on substan­
Sec . 2001. T he C onsum er P rotection A ct (15
tially all o f its business functions;
U.S.C. 1601 et seq.) is am ended by adding at
(5) the term “consum er” m eans a natural per­
the end thereof the following new title:
son;
(6) the term “electronic fund tran sfer” m eans
TITLE IX— ELECTRONIC FUND TRANSFERS
any transfer of funds, other th an a transaction
§ 901. Short title
originated by check, draft, o r sim ilar p aper in­
strum ent, w hich is initiated through an electronic
This title m ay be cited as the “Electronic Fund
term inal, telephonic instrum ent, or com puter or
T ransfer A ct” .
m agnetic tape so as to order, instruct, or au thor­
ize a financial institution to debit o r credit an
§ 902. Findings and purpose
account. Such term includes, b ut is not lim ited to,
(a)
T he Congress finds that the use o f electronic point-of-sale transfers, autom ated teller m achine
systems to transfer funds provides the potential
transactions, direct deposits or w ithdraw als of
for substantial benefits to consum ers. H ow ever,
funds, and transfers initiated by telephone. Such
due to the unique characteristics o f such systems,
term does not include—
the application of existing consum er protection
(A) any check guarantee o r authorization serv-




5

y
STATUTORY APPENDIX

REGULATION E
tran sfer” m eans an electronic fund transfer from
a consum er’s account initiated by a person other
than the consum er w ithout actual authority to
initiate such transfer and from which the con­
sum er receives no benefit, but the term does not
include any electronic fund transfer (A) initiated
by a person other than the consum er w ho was
furnished w ith the card, code, o r other m eans of
access to such consum er’s account by such con­
sumer, unless the consum er has notified the finan­
cial institution involved th at transfers by such
other person are no longer authorized, (B) ini­
tiated w ith fraudulent intent by the consum er or
any person acting in concert with the consum er,
or (C) w hich constitutes an erro r com m itted by
a financial institution.

ice w hich does n o t directly result in a debit or
credit to a consum er’s account;
(B) any tran sfer of funds, other than those
processed by autom ated clearinghouse, m ade by
a financial institution on behalf of a consum er by
m eans of a service that transfers funds held at
either F ederal Reserve banks o r other depository
institutions and w hich is not designed prim arily
to transfer funds on behalf of a consum er;
(C) any transaction the prim ary purpose of
w hich is the purchase or sale of securities or
com m odities through a broker-dealer registered
w ith o r regulated by the Securities and Exchange
Com mission;
(D) any autom atic transfer from a savings ac­
count to a dem and deposit account pursu an t to
an agreem ent betw een a consum er and a financial
institution fo r the purpose of covering an over­
d raft o r m aintaining an agreed upon m inim um
balance in the consum er’s dem and deposit ac­
count; or
(E) any transfer of funds w hich is initiated by
a telephone conversation betw een a consum er and
an officer or em ployee of a financial institution
w hich is not pursuant to a prearranged plan and
u n d er w hich periodic or recurring transfers are
not contem plated;
as determ ined u nder regulations of the Board;
(7) the term “electronic term inal” m eans an
electronic device, other th an a telephone operated
by a consum er, through w hich a consum er may
initiate an electronic fund transfer. Such term
includes but is not lim ited to, point-of-sale ter­
m inals, autom ated teller m achines, and cash dis­
pensing m achines;
(8) the term “financial institution” m eans a State
or N ational bank, a State or Federal savings and
loan association, a m utual savings bank, a State
or F ederal credit union, or any other person who,
directly o r indirectly, holds an account belonging
to a consum er;
(9) the term “p reauthorized electronic fund
transfer” m eans an electronic fund transfer au­
thorized in advance to recur at substantially regu­
lar intervals;
(10) the term “State” means any State, territory,
or possession o f the U nited States, the D istrict
o f Colum bia, the C om m onw ealth of P uerto Rico,
o r any political subdivision of any of the fo re­
going; and
(11) the term “unauthorized electronic fund




§ 904. Regulations
(a) T h e Board shall prescribe regulations to
carry out the purposes of this title. In prescribing
such regulations, the Board shall:
(1) consult w ith the other agencies referred to
in section 917 and take into account, and allow
for, the continuing evolution of electronic bank­
ing services and the technology utilized in such
services,
(2) prepare an analysis o f econom ic im pact
w hich considers the cost and benefits to financial
institutions, consum ers, and oth er users of elec­
tronic fu n d transfers, including the extent to
w hich additional docum entation, reports, records,
or other pap er w ork would be required, and the
effects upon com petition in the provision of elec­
tronic banking services am ong large and small
financial institutions and the availability o f such
services to different classes o f consum ers, p a r­
ticularly low incom e consum ers,
(3) to the extent practicable, the Board shall
dem onstrate th at the consum er protections of the
proposed regulations outw eigh the com pliance
costs im posed upon consum ers and financial insti­
tutions, and
(4) any proposed regulations and accom pany­
ing analyses shall be sent prom ptly to Congress
by the Board.
(b) T he Board shall issue model clauses fo r op­
tional use by financial institutions to facilitate
com pliance w ith the disclosure requirem ents of
section 905 and to aid consum ers in understand­
ing the rights and responsibilities of participants
in electronic fund transfers by utilizing readily
6

REGULATION E

STATUTORY APPENDIX

fund transfer has been or m ay be effected;
(3) the type and nature of electronic fund
transfers w hich the consum er m ay initiate, includ­
ing any lim itations on the frequency or dollar
am ount of such transfers, except th at the details
of such lim itations need not be disclosed if their
confidentiality is necessary to m aintain the secu­
rity of an electronic fund transfer system, as
determ ined by the Board;
(4) any charges fo r electronic fund transfers
o r fo r the right to m ake such transfers;
(5) the consum er’s right to stop paym ent o f a
preauthorized electronic fu n d transfer and the
procedure to initiate such a stop paym ent order;
(6) the consum er’s right to receive docum enta­
tion of electronic fu n d transfers u nder section
906;
(7) a sum m ary, in a form prescribed by regu­
lations of the Board, of the erro r resolution p ro ­
visions of section 908 and the consum er’s rights
thereunder. T he financial institution shall there­
after transm it such sum m ary at least once per
calendar year;
(8) the financial institution’s liability to the con­
sum er under section 910; and
(9) u nder w hat circum stances the financial in­
stitution will in the o rdinary course of business
disclose inform ation concerning the consum er’s
account to th ird persons.
(b) A financial institution shall notify a con­
sum er in w riting at least tw enty-one days prior
to the effective date of any change in any term
or condition o f the consum er’s account required
to be disclosed u nder subsection (a) if such change
§ 905. Terms and conditions of transfers
w ould result in greater cost or liability fo r such
(a)
T he term s and conditions of electronic fund consum er or decreased access to the consum er’s
transfers involving a consum er’s account shall be
account. A financial institution may, however,
disclosed at the tim e the consum er contracts for
im plem ent a change in the term s or conditions
an electronic fund transfer service, in accordance
of an account w ithout prio r notice w hen such
with regulations of the Board. Such disclosures
change is im m ediately necessary to m aintain or
shall be in readily understandable language and
restore the security of an electronic fund transfer
system or a consum er’s account. Subject to sub­
shall include, to the extent applicable—
(1) the consum er’s liability for unauthorized
section (a)(3), the Board shall require subsequent
notification if such a change is m ade perm anent.
electronic fund transfers and, at the financial in­
(c) F o r any account of a consum er m ade ac­
stitution’s option, notice of the advisability of
prom pt reporting of any loss, theft, or unauth o r­
cessible to electronic fund transfers prior to the
ized use of a card, code, or other m eans of access;
effective date o f this title, the inform ation re­
quired to be disclosed to the consum er under
(2) the telephone num ber and address of the
subsection (a) shall be disclosed n o t later th an
person or office to be notified in the event the
the earlier of—
consum er believes that an unauthorized electronic
understandable language. Such model clauses shall
be adopted after notice duly given in the F ederal
Register and opportunity fo r public com m ent in
accordance w ith section 553 o f title 5, U nited
States Code. W ith respect to the disclosures re­
quired by section 905(a) (3) and (4), the Board
shall take account o f variations in the services
and charges u nder different electronic fund tran s­
fer systems and, as appropriate, shall issue alter­
native m odel clauses fo r disclosure of these differ­
ing account term s.
(c) Regulations prescribed hereunder m ay con­
tain such classifications, differentiations, or other
provisions, and m ay provide fo r such adjustm ents
and exceptions for any class o f electronic fund
transfers, as in the judgm ent of the B oard are
necessary or p roper to effectuate the purposes
of this title, to prevent circum vention or evasion
thereof, or to facilitate com pliance therew ith.
T he B oard shall by regulation m odify the require­
m ents im posed by this title on small financial
institutions if the B oard determ ines th a t such
modifications are necessary to alleviate any undue
com pliance burden on small financial institutions
and such modifications are consistent w ith the
purpose and objective o f this title.
(d) In the event th a t electronic fund transfer
services are m ade available to consum ers by a
person other than a financial institution holding a
consum er’s account, the Board shall by regulation
assure that the disclosures, protections, responsi­
bilities, and rem edies created by this title are
m ade applicable to such persons and services.




STATUTORY APPENDIX

REGULATION E

m ation regarding transactions other th an elec­
tronic fund transfers, shall clearly set fo rth —
(1) with regard to each electronic fund transfer
during the period, the inform ation described in
subsection (a), w hich m ay be provided on an
accom panying docum ent;
(2) the am ount of any fee or charge assessed
by the financial institution during the period for
electronic fund transfers o r fo r account m ainte­
nance;
(3) the balances in the consum er’s account at
the beginning of the period and at the close of
the period; and
(4) the address and telephone num ber to be
used by the financial institution fo r the purpose
of receiving any statem ent inquiry or notice of
account erro r from the consum er. Such address
and telephone num ber shall be preceded by the
caption “D irect Inquiries T o :” or other sim ilar
language indicating that the address and num ber
are to be used fo r such inquiries o r notices.
(d) In the case of a consum er’s passbook ac­
count w hich m ay not be accessed by electronic
fund transfers other th an preauthorized electronic
fund transfers crediting the account, a financial
institution may, in lieu o f com plying with the re­
quirem ents of subsection (c), upon presentation
of the passbook provide the consum er in w riting
with the am ount and date of each such transfer
involving the account since the passbook was last
presented.
(e) In the case of a consum er’s account other
than a passbook account, w hich m ay not be ac­
cessed by electronic fund transfers oth er than pre­
authorized electronic fund transfers crediting the
account, the financial institution m ay provide a
periodic statem ent on a quarterly basis which
otherw ise com plies with the requirem ents of sub­
section (c).
(f) In any action involving a consum er, any
docum entation required by this section to be given
to the consum er w hich indicates that an electronic
fund transfer was m ade to an o th er person shall
be adm issable as evidence of such transfer and
shall constitute prim a facie proof that such trans­
fer was made.

(1) the first periodic statem ent required by
section 906(c) after the effective date of this title;
or
(2) thirty days after the effective date of this
title.

§ 906. Documentation of transfers; periodic
statements
(a) F or each electronic fund transfer initiated
by a consum er from an electronic term inal, the
financial institution holding such consum er’s ac­
count shall, directly or indirectly, at the tim e the
transfer is initiated, m ake available to the con­
sum er w ritten docum entation of such transfer.
T he docum entation shall clearly set forth to the
extent applicable—
(1) the am ount involved and date the transfer
is initiated;
(2) the type of transfer;
(3) the identity o f the consum er’s account with
the financial institution from w hich or to w hich
funds are transferred;
(4) the identity of any third party to whom
or from w hom funds are transferred; and
(5) the location o r identification o f the elec­
tronic term inal involved.
(b) F o r a consum er’s account w hich is sched­
uled to be credited by a preauthorized electronic
fund transfer from the same payor at least once
in each successive sixty-day period, except w here
the payor provides positive notice of the transfer
to the consum er, the financial institution shall
elect to provide prom ptly either positive notice
to the consum er w hen the credit is m ade as sched­
uled, or negative notice to the consum er when
the credit is not m ade as scheduled, in accordance
w ith regulations of the Board. T he m eans of
notice elected shall be disclosed to the consum er
in accordance with section 905.
(c) A financial institution shall provide each
consum er w ith a periodic statem ent fo r each ac­
count of such consum er that m ay be accessed
by m eans of an electronic fund transfer. Except
as provided in subsections (d) and (e), such state­
m ent shall be provided at least m onthly for each
m onthly or shorter cycle in w hich an electronic
fund transfer affecting the account has occurred,
or every three m onths, w hichever is m ore fre­
quent. T he statem ent, w hich m ay include infor­




§ 907. Preauthorized transfers
(a)
A preauthorized electronic fund transfer
from a consum er’s account m ay be authorized
8

REGULATION E

STATUTORY APPENDIX

be sent. A financial institution w hich requires
w ritten confirm ation in accordance w ith the pre­
vious sentence need not provisionally recredit a
consum er’s account in accordance with subsection
(c), nor shall the financial institution be liable
u nder subsection (e) if the w ritten confirm ation
is not received w ithin the ten-day period referred
to in the previous sentence.
(b) If the financial institution determ ines that an
erro r did occur, it shall prom ptly, but in no event
m ore th an one business day after such determ i­
nation, correct the error, subject to section 909,
including the crediting o f interest w here appli­
cable.
(c) If a financial institution receives notice of
an erro r in the m anner and w ithin the tim e period
specified in subsection (a), it m ay, in lieu o f the
requirem ents of subsections (a) and (b), w ithin
ten business days after receiving such notice p ro ­
visionally recredit the consum er’s account fo r the
am ount alleged to be in error, subject to section
909, including interest w here applicable, pending
the conclusion of its investigation and its deter­
§ 908. Error resolution
m ination of w hether an erro r has occurred. Such
(a)
If a financial institution, w ithin sixty days investigation shall be concluded not later than
after having transm itted to a consum er docum en­
forty-five days after receipt o f notice o f the error.
tation pursuant to section 906 (a), (c), or (d) or
D uring the pendency of the investigation, the
notification pursuant to section 906(b), receives
consum er shall have full use of th e funds p ro ­
oral o r w ritten notice in w hich the consum er—
visionally recredited.
(1) sets forth or otherw ise enables the financial
(d) If the financial institution determ ines after
institution to identify the nam e and account num ­
its investigation pursuant to subsection (a) or (c)
ber of the consum er;
that an erro r did not occur, it shall deliver or
(2) indicates the consum er’s belief th a t the
mail to the consum er an explanation of its find­
docum entation, or, in the case of notification
ings within 3 business days after the conclusion
pursuant to section 906(b), the consum er’s ac­
of its investigation, and upon request o f the con­
count, contains an erro r and the am ount of such
sum er prom ptly deliver or m ail to the consum er
error; and
reproductions of all docum ents which the financial
(3) sets forth the reasons for the consum er’s
institution relied on to conclude th at such error
belief (where applicable) that an error has oc­
did not occur. T he financial institution shall in­
curred,
clude notice of the right to request reproductions
with the explanation of its findings.
the financial institution shall investigate the al­
(e) If in any action under section 915, the court
leged error, determ ine w hether an error has oc­
finds that—
curred, and report or mail the results of such
investigation and determ ination to the consum er
(1) the financial institution did not provision­
w ithin ten business days. T he financial institution
ally recredit a consum er’s account w ithin the
m ay require w ritten confirm ation to be provided
ten-day period specified in subsection (c), and the
to it w ithin ten business days of an oral notifica­
financial institution (A) did not m ake a good
tion of error if, when the oral notification is made,
faith investigation o f the alleged error, o r (B) did
the consum er is advised of such requirem ent and
not have a reasonable basis for believing th a t the
the address to w hich such confirm ation should
consum er’s account was not in error; or

by the consum er only in w riting, and a copy of
such authorization shall be provided to the con­
sum er w hen m ade. A consum er m ay stop paym ent
of a preauthorized electronic fund transfer by
notifying the financial institution orally or in
w riting at any tim e up to three business days
preceding the scheduled date of such transfer.
T he financial institution m ay require w ritten con­
firm ation to be provided to it w ithin fourteen
days of an oral notification if, w hen the oral
notification is m ade, the consum er is advised of
such requirem ent and the address to w hich such
confirm ation should be sent.
(b)
In the case of preauthorized transfers from
a consum er’s account to the sam e person w hich
m ay vary in am ount, the financial institution or
designated payee shall, prior to each transfer,
provide reasonable advance notice to the con­
sum er, in accordance w ith regulations o f the
Board, of the am ount to be transferred and the
scheduled date of the transfer.




9

STATUTORY APPENDIX

REGULATION E

(2)
the financial institution know ingly and will­
fully concluded that the consum er’s account was
not in erro r w hen such conclusion could not rea­
sonably have been draw n from the evidence
available to the financial institution at the tim e of
its investigation, then the consum er shall be en­
titled to treble dam ages determ ined under section
915(a)(1).
(f)
F o r the purpose of this section, an erro r
consists of—
(1) an unauthorized electronic fund transfer;
(2) an incorrect electronic fund transfer from
or to the consum er’s account;
(3) the omission from a periodic statem ent of
an electronic fund transfer affecting the co n ­
sum er’s account w hich should have been included;
(4) a com putational error by the financial insti­
tution;
(5) the consum er’s receipt of an incorrect
am ount of m oney from an electronic term inal;
(6) a consum er’s request fo r additional infor­
m ation or clarification concerning an electronic
fund transfer o r any docum entation required by
this title; or
(7) any other error described in regulations of
the Board.

transfer involving the consum er’s account has
been or m ay be effected. N otice u nder this p ara­
graph is sufficient when such steps have been
taken as m ay be reasonably required in the ordi­
nary course of business to provide the financial
institution with the pertinent inform ation, w hether
or not any particular officer, em ployee, or agent
of the financial institution does in fact receive
such inform ation.
N otw ithstanding the foregoing, reim bursem ent
need not be m ade to the consum er fo r losses the
financial institution establishes w ould not have
occurred but for the failure o f the consum er to
rep o rt w ithin sixty days o f transm ittal o f the
statem ent (or in extenuating circum stances such
as extended travel or hospitalization, w ithin a
reasonable tim e under the circum stances) any un­
authorized electronic fund tran sfer or account
erro r w hich appears on the periodic statem ent
provided to the consum er u nder section 906. In
addition, reim bursem ent need not be m ade to
the consum er for losses w hich the financial insti­
tution establishes would not have occurred but
for the failure of the consum er to report any loss
o r th eft o f a card o r oth er m eans o f access
w ithin two business days after the consum er learns
of the loss or th eft (or in extenuating circum ­
stances such as extended travel or hospitalization,
§ 909. Consumer liability for unauthorized
w ithin a longer period which is reasonable under
transfers
the circum stances), b ut the consum er’s liability
(a)
A consum er shall be liable fo r any u n au ­ u n d er this subsection in any such case m ay not
thorized electronic fund transfer involving the
exceed a total of $500, or the am ount of u nau­
account of such consum er only if the card or other
thorized electronic fund transfers w hich occur
following the close of two business days (or such
m eans o f access utilized fo r such transfer was an
longer period) after the consum er learns o f the
accepted card o r other m eans of access and if the
loss or theft but prior to notice to the financial
issuer o f such card, code, or other m eans of ac­
institution under this subsection, w hichever is less.
cess has provided a m eans w hereby the user of
such card, code, or other m eans of access can be
(b)
In any action w hich involves a consum er’s
identified as the person authorized to use it, such
liability for an unauthorized electronic fund trans­
as by signature, photograph, o r fingerprint or by
fer, the burden of p ro o f is upon the financial
electronic or m echanical confirm ation. In no
institution to show th at the electronic fund trans­
event, however, shall a consum er’s liability for
fer was authorized or, if the electronic fund
an unauthorized transfer exceed the lesser of—
transfer was unauthorized, then the burden of
p ro o f is upon the financial institution to establish
(1) $50; or
th at the conditions of liability set forth in sub­
(2) the am ount of m oney or value o f property
section (a) have been met, and, if the transfer
o r services obtained in such unauthorized elec­
was initiated after the effective date of section
tronic fund transfer prior to the tim e the financial
905, that the disclosures required to be m ade to
institution is notified of, or otherw ise becomes
the consum er under section 905(a) (1) and (2)
aw are of, circum stances w hich lead to the reason­
were in fact m ade in accordance w ith such section.
able belief that an unauthorized electronic fund




10

REGULATION E

STATUTORY APPENDIX

accordance with the term s and conditions o f the
account.
(b) A financial institution shall not be liable
u nder subsection (a)(1) or (2) if the financial in­
stitution shows by a preponderance of the evi­
dence th a t its action o r failure to act resulted
from —
(1) an act of G od o r other circum stance be­
yond its control, th at it exercised reasonable care
to prevent such an occurrence, and that it exer­
cised such diligence as the circum stances required;
or
(2) a technical m alfunction w hich was know n
to the consum er at the tim e he attem pted to ini­
tiate an electronic fu n d transfer or, in the case
of a preauthorized transfer, at the tim e such
transfer should have occurred.
(c) In the case of a failure described in sub­
section (a) w hich was not intentional and w hich
resulted from a bona fide error, notw ithstand­
§ 910. Liability of financial institutions
ing th e m aintenance of procedures reasonably
(a)
Subject to subsections (b) and (c), a finan­ adapted to avoid any such error, the financial
institution shall be liable fo r actual dam ages
cial institution shall be liable to a consum er for
proved.
all dam ages proxim ately caused by—

(c) In the event of a transaction w hich involves
both an unauthorized electronic fund transfer and
an extension of credit as defined in section 103(e)
of this A ct pursuant to an agreem ent between the
consum er and the financial institution to extend
such credit to the consum er in the event the con­
sum er’s account is overdraw n, the lim itation on
the consum er’s liability for such transaction shall
be determ ined solely in accordance w ith this sec­
tion.
(d) N othing in this section imposes liability
upon a consum er for an unauthorized electronic
fund transfer in excess of his liability for such a
transfer under other applicable law or under any
agreem ent w ith the consum er’s financial institu­
tion.
(e) Except as provided in this section, a con­
sum er incurs no liability from an unauthorized
electronic fund transfer.

(1) the financial institution’s failure to m ake
an electronic fund transfer, in accordance with
the term s and conditions o f an account, in the
correct am ount or in a tim ely m anner w hen
properly instructed to do so by the consum er,
except where—
(A) the consum er’s account has insufficient
funds;
(B) the funds are subject to legal process or
other encum brance restricting such transfer;
(C) such transfer would exceed an established
credit limit;
(D) an electronic term inal has insufficient cash
to com plete the transaction; or
(E) as otherw ise provided in regulations o f the
Board;
(2) the financial institution’s failure to m ake
an electronic fund transfer due to insufficient
funds when the financial institution failed to
credit,, in accordance w ith the term s and condi­
tions of an account, a deposit of funds to the
consum er’s account w hich w ould have provided
sufficient funds to m ake the transfer, and
(3) the financial institution’s failure to stop
paym ent of a preauthorized transfer from a con­
sum er’s account w hen instructed to do so in




§ 911. Issuance of cards or other means of access
(a) N o person m ay issue to a consum er any
card, code, o r other m eans of access to such con­
sum er’s account for the purpose of initiating an
electronic fund transfer other than—
(1) in response to a request or application
therefor; or
(2) as a renew al of, or in substitution for, an
acepted card, code, o r o th er m eans o f access,
w hether issued by the initial issuer or a successor.
(b ) N otw ithstanding the provisions o f subsec­
tion (a), a person m ay distribute to a consum er on
an unsolicited basis a card, code, or other means
of access for use in initiating an electronic fund
tran sfer from such consum er’s account, if—
(1) such card, code, or other m eans o f access
is n ot validated;
(2) such distribution is accom panied by a com ­
plete disclosure, in accordance with section 905,
of the consum er’s rights and liabilities w hich will
apply if such card, code, or other m eans o f access
is validated;
(3) such distribution is accom panied by a clear
explanation, in accordance with regulations of
the Board, that such card, code, or other m eans
11

STATUTORY APPENDIX

REGULATION E

of access is not validated and how the consum er
m ay dispose of such code, card, o r other m eans
of access if validation is not desired; and
(4)
such card, code, or other m eans of access
is validated only in response to a request or ap­
plication from the consum er, upon verification
of the consum er’s identity.
(c)
F o r the purpose o f subsection (b), a card,
code, or other m eans of access is validated when
it m ay be used to initiate an electronic fund
transfer.

§ 912. Suspension of obligations
If a system m alfunction prevents the effectua­
tion of an electronic fund transfer initiated by
a consum er to another person, and such other
person has agreed to accept paym ent by such
m eans, the consum er’s obligation to the other
person shall be suspended until the m alfunction
is corrected and the electronic fund transfer m ay
be com pleted, unless such o th e r person has sub­
sequently, by w ritten request, dem anded paym ent
by m eans other than an electronic fund transfer.

§ 913. Compulsory use of
electronic fund transfers
N o person m ay—
(1) condition the extension of credit to a con­
sum er on such consum er’s repaym ent by means
of preauthorized electronic fund transfers; or
(2) require a consum er to establish an account
fo r receipt of electronic fund transfers w ith a
p articular financial institution as a condition of
em ploym ent or receipt of a governm ent benefit.

§ 914. Waiver of rights
N o w riting o r other agreem ent between a con­
sum er and any other person m ay contain any
provision w hich constitutes a waiver of any right
conferred or cause of action created by this title.
N othing in this section prohibits, however, any
w riting or other agreem ent w hich grants to a con­
sum er a m ore extensive right or rem edy or greater
protection than contained in this title or a waiver
given in settlem ent of a dispute or action.

§ 915. Civil liability
(a) Except as otherw ise provided by this sec­
tion and section 910, any person who fails to
com ply w ith any provision of this title with
respect to any consum er, except fo r an erro r re ­




12

solved in accordance w ith section 908, is liable
to such consum er in an am ount equal to the
sum of—
(1) any actual dam age sustained by such con­
sum er as a result o f such failure;
(2)
(A) in the case of an individual action, an
am ount not less th an $100 nor greater than
$1,000; or
(B) in the case of a class action, such am ount
as the co u rt m ay allow, except th a t (i) as to each
m em ber of the class no m inim um recovery shall
be applicable, and (ii) the total recovery under
this subparagraph in any class action o r series of
class actions arising out of the sam e failure to
com ply by the same person shall not be m ore
th an the lesser of $500,000 or 1 p er centum of
the net w orth of the defendant; and
(3) in the case of any successful action to en­
force the foregoing liability, the costs of the
action, together w ith a reasonable attorney’s fee
as determ ined by the court.
(b) In determ ining the am ount of liability in
any action under subsection (a), the co u rt shall
consider, am ong other relevant factors—
(1) in any individual action u nder subsection
(a)(2)(A), the frequency and persistence of non­
com pliance, the nature o f such noncom pliance,
and the extent to w hich the noncom pliance was
intentional; or
(2) in any class action under subsection (a)
(2)(B), the frequency and persistence of noncom ­
pliance, the n atu re of such noncom pliance, the
resources of the defendant, the num ber o f p er­
sons adversely affected, and the extent to which
the noncom pliance was intentional.
(c) Except as provided in section 910, a person
m ay 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 violation was not intentional and resulted
from a bona fide erro r notw ithstanding the m ain­
tenance of procedures reasonably adapted to avoid
any such error.
(d) N o provision o f this section or section 916
im posing any liability shall apply to—
(1) any act done or om itted in good faith in
conform ity w ith any rule, regulation, or inter­
pretation thereof by the Board or in conform ity
with any interpretation o r approval by an official
or em ployee o f the F ederal Reserve System duly

REGULATION E

STATUTORY APPENDIX

authorized by the B oard to issue such interpreta­
tions o r approvals under such procedures as the
B oard m ay prescribe therefor; or
(2)
any failure to m ake disclosure in proper
fo rm if a financial institution utilized an appro­
priate m odel clause issued by the Board,
notw ithstanding that after such act, omission, or
failure has occurred, such rule, regulation, ap­
proval, or m odel clause is am ended, rescinded,
or determ ined by judicial or other authority to
be invalid fo r any reason.
(e) A person has no liability under this section
fo r any failure to com ply w ith any requirem ent
under this title if, prior to the institution of an
action u nder this section, the person notifies the
consum er concerned of the failure, com plies with
the requirem ents of this title, and m akes an ap ­
propriate adjustm ent to the consum er’s account
and pays actual dam ages or, w here applicable,
dam ages in accordance with section 910.
(f) O n a finding by the court that an unsuc­
cessful action u nder this section was brought in
bad faith or fo r purposes o f harassm ent, the
court shall aw ard to the defendant attorney’s
fees reasonable in relation to the w ork expended
and costs.
(g) W ithout regard to the am ount in contro­
versy, any action under this section m ay be
brought in any U nited States district court, o r in
any other co u rt of com petent jurisdiction, w ithin
one year from the date of the occurrence of the
violation.

§9 1 6 . Criminal liability
(a) W hoever know ingly and willfully—
(1) gives false o r inaccurate inform ation or
fails to provide inform ation w hich he is required
to disclose by this title or any regulation issued
thereunder; or
(2) otherw ise fails to com ply w ith any pro­
vision of this title; shall be fined not m ore than
$5,000 or im prisoned not m ore than one year,
or both.
(b) W hoever—
(1) knowingly, in a transaction affecting inter­
state or foreign com m erce, uses or attem pts o r
conspires to use any counterfeit, fictitious, altered,
forged, lost, stolen, o r fraudulently obtained debit
instrum ent to obtain money, goods, services, or
anything else of value w hich w ithin any one-year




period has a value aggregating $1,000 or m ore;
or
(2) w ith unlaw ful o r fraudulent intent, trans­
ports o r attem pts o r conspires to tran sp o rt in
interstate o r foreign com m erce a counterfeit, fic­
titious, altered, forged, lost, stolen, o r fraudulently
obtained debit instrum ent know ing the sam e to
be counterfeit, fictitious, altered, forged, lost,
stolen, or fraudulently obtained; or
(3) with unlaw ful or frau d u len t intent, uses
any instrum entality o f interstate o r foreign com ­
m erce to sell or transport a counterfeit, fictitious,
altered, forged, lost, stolen, o r fraudulently ob­
tained debit instrum ent know ing th e sam e to be
counterfeit, fictitious, altered, forged, lost, stolen,
or fraudulently obtained; or
(4) know ingly receives, conceals, uses, or trans­
ports money, goods, services, or anything else of
value (except tickets fo r interstate or foreign
transportation) w hich (A) w ithin any one-year
period has a value aggregating $1,000 o r m ore,
(B) has m oved in o r is p a rt of, or w hich consti­
tutes interstate or foreign com m erce and (C) has
been obtained w ith a counterfeit, fictitious, altered,
forged, lost, stolen, or fraudulently obtained debit
instrum ent; or
(5) know ingly receives, conceals, uses, sells,
or transports in interstate or foreign com m erce
one or m ore tickets fo r interstate or foreign trans­
portation, w hich (A) w ithin any one-year period
have a value aggregating $500 or m ore, and (B)
have been purchased o r obtained with one or
m ore counterfeit, fictitious, altered, forged, lost,
stolen, o r fraudulently obtained debit instrum ent;
or
(6) in a transaction affecting interstate or fo r­
eign com m erce, furnishes money, property, serv­
ices, or anything else o f value, w hich within any
one-year period has a value aggregating $1,000
o r m ore, through the use of any counterfeit, fic­
titious, altered, forged, lost, stolen, o r fraudulently
obtained debit instrum ent know ing the sam e to
be counterfeit, fictitious, altered, forged, lost,
stolen, or fraudulently obtained—
shall be fined not m ore than $10,000 or im pris­
oned n o t m ore th an ten years, or both.
(c)
A s used in this section, the term “debit in­
strum ent” m eans a card, code, or oth er device,
other th an a check, draft, or sim ilar p aper in-

13

STATUTORY APPENDIX

REGULATION E

cifically 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 Commission Act, a violation
of any requirement imposed under this title shall
be deemed a violation of a requirement imposed
under that Act. All of the functions and powers
of the Federal Trade Commission under the Fed­
eral Trade Commission Act are available to the
Commission to enforce compliance by any per­
son subject to the jurisdiction of the Commission
with the requirements imposed under this title,
irrespective of whether that person is engaged
in commerce or meets any other jurisdictional
tests in the Federal Trade Commission Act.

strument, by the use of which a person may ini­
tiate an electronic fund transfer.
§ 917. Administrative enforcement
(a) Compliance with the requirements imposed
under this title shall be enforced under—
(1) section 8 of the Federal Deposit Insurance
Act, in the case of—
(A) national banks, by the Comptroller of the
Currency;
(B) member banks of the Federal Reserve
System (other than national banks), by the Board;
(C) banks insured by the Federal Deposit In­
surance Corporation (other than members of the
Federal Reserve System), by the Board of Direc­
tors of the Federal Deposit Insurance Corpora­
tion;
(2) section 5(d) of the Home Owners’ Loan
Act of 1933, section 407 of the National Hous­
ing Act, and sections 6(i) and 17 of the Federal
Home Loan Bank Act, by the Federal Home
Loan Bank Board (acting directly or through the
Federal Savings and Loan Insurance Corporation),
in the case of any institution subject to any of
those provisions;
(3) the Federal Credit Union Act, by the Ad­
ministrator of the National Credit Union Admin­
istration with respect to any Federal credit union.
(4) the Federal Aviation Act of 1958, by the
Civil Aeronautics Board, with respect to any air
carrier 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 re­
quirement imposed under that Act. In addition
to its powers under any provision of law specifi­
cally 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 it by law.
(c) Except to the extent that enforcement of
the requirements imposed under this title is spe­




§ 918. Reports to Congress
(a) Not later than twelve months after the
effective date of this title and at one-year intervals
thereafter, the Board and the Attorney General
shall, respectively, make reports to the Congress
concerning the administration of their functions
under this title, including such recommendations
as the Board and the Attorney General respec­
tively, deem necessary or appropriate. In addi­
tion, each report of the Board shall include its
assessment of the extent to which compliance
with this title is being achieved, and a summary
of the enforcement actions taken under section
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
consumers, on competition, on the introduction of
new technology, on the operations of financial
institutions, and on the adequacy of consumer
protection. The report of the Attorney General
shall also contain an analysis of the impact of
this title on the operation, workload, and effi­
ciency of the Federal courts.
(b) In the exercise of its functions 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 trans14

REGULATION E

fers, except to the extent that those laws are in­
consistent with the provisions of this title, and
then only to the extent of the inconsistency. A
State law is not inconsistent with this title if the
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, submitted in accordance
with procedures prescribed in regulations of the
Board, determine whether a State requirement is
inconsistent or affords greater protection. If the
Board determines that a State requirement 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 judicial 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 de­
termines that under the law of that State that class
of electronic fund transfers is subject to require­
ments substantially similar to those imposed by
this title, and that there is adequate provision for
enforcement.
§ 921. Effective date
This title takes effect upon the expiration of
eighteen months from the date of its enactment,
except that sections 909 and 911 take effect upon
the expiration of ninety days after the date of
enactment.
APPENDIX A
MODEL DISCLOSURE CLAUSES
This appendix contains model disclosure clauses
for optional use by financial institutions to facili­
tate compliance with the disclosure requirements
of §§ 205.4(a)(3), (b), and (d). Section 915(d)(2) of
the Act provides that use of these clauses in con­
junction with other requirements of the regulation
will protect financial institutions from liability un­




STATUTORY APPENDIX
der §§ 915 and 916 of the Act to the extent that
the clauses accurately reflect the institutions’ elec­
tronic fund transfer services.
Financial institutions need not use any of the
provided clauses, but may use clauses of their own
design in conjunction with the model clauses. The
inapplicable portions of words or phrases in
parentheses should be deleted. Financial institu­
tions may make alterations, substitutions or addi­
tions in the clauses in order to reflect the services
offered, such as technical changes (e.g., substitu­
tion of a trade name for the word “card,” deletion
of inapplicable services), or substitution of lesser
liability limits in § A(2).

SECTION A(I)—DISCLOSURE THAT ACCESS
DEVICE IS NOT VALIDATED AND HOW
TO DISPOSE OF DEVICE IF VALIDATION
IS NOT DESIRED (§ 205.4(b)(3))
(a) Accounts using cards. YOU CANNOT USE
THE ENCLOSED CARD TO TRANSFER
MONEY INTO OR OUT OF YOUR ACCOUNT
UNTIL WE HAVE VALIDATED IT. IF YOU
DO NOT WANT TO USE THE CARD, PLEASE
(destroy it at once by cutting it in half).
[Financial institution may add validation in­
structions here.]
(b) Accounts using codes. YOU CANNOT USE
THE ENCLOSED CODE TO TRANSFER
MONEY INTO OR OUT OF YOUR ACCOUNT
UNTIL WE HAVE VALIDATED IT. IF YOU
DO NOT WANT TO USE THE CODE, PLEASE
(destroy this notice at once).
[Financial institution may add validation in­
structions here.]
SECTION A(2)—DISCLOSURE OF CONSUMER’S
LIABILITY FOR UNAUTHORIZED TRANSFERS
AND OPTIONAL DISCLOSURE OF
ADVISABILITY OF PROMPT
REPORTING (§ 205.4(d)(1))
(a) Liability disclosure. (Tell us AT ONCE if
you believe your (card)(code) has been lost or
stolen. Telephoning is the best way of keeping
your possible losses down. You could lose all the
money in your account (plus your maximum over­
draft line of credit). If you tell us within 2 busi-

STATUTORY APPENDIX

REGULATION E

SECTION A(5)—DISCLOSURE OF TYPES OF

ness days, you can lose no more than $50 if
someone used your (card)(code) without your
permission.) (If you believe your (card)(code) has
been lost or stolen, and you tell us within 2
business days after you learn of the loss or theft,
you can lose no more than $50 if someone used
your (card)(code) without your permission.)
If you do NOT tell us within 2 business days
after you learn of the loss or theft of your (card)
(code), and we can prove we could have stopped
someone from using your (card)(code) without
your permission if you had told us, you could lose
as much as $500.
Also, if your statement shows transfers that you
did not make, tell us at once. If you do not tell
us within 60 days after the statement was mailed
to you, you may not get back any money you lost
after the 60 days if we can prove that we could
have stopped someone from taking the money if
you had told us in time.
If a good reason (such as a long trip or a hos­
pital stay) kept you from telling us, we will extend
the time periods.

A V A IL A B L E T R A N SF E R S A N D LIM ITS O N
T R A N SF E R S (§ 205.4(d)(4))

(a) Account access. You may use your (card)
(code) to
(1) Withdraw cash from your (checking)
(or)(savings) account.
(2) Make deposits to your (checking)(or)
(savings) account.
(3) Transfer funds between your checking
and savings accounts whenever you re­
quest.
(4) Pay for purchases at places that have
agreed to accept the (card)(code).
(5) Pay bills directly (by telephone) from
your (checking)(or)(savings) account in
the amounts and on the days you re­
quest.
Some of these services may not be available
at all terminals.
(b) Limitations on frequency of transfers.
(1) You may make only [insert number, e.g.,
3] cash withdrawals from our terminals each
[insert time period, e.g., week],
(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
service for [insert number] transactions each [in­
sert time 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-of-sale 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 amount]
worth of goods or services each ([insert time period])(time you use the (card) (code)) in our pointof-sale transfer service.

SECTION A(3)—DISCLOSURE OF TELEPHONE
NUMBER AND ADDRESS TO BE NOTIFIED
IN EVENT OF UNAUTHORIZED
TRANSFER (§ 205.4(d)(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 your account without your permis­
sion, call:
[Telephone number]
or write:
[Name of person or office to be notified]
[Address]
SECTION A(4)—DISCLOSURE OF WHAT
CONSTITUTES BUSINESS DAY OF
INSTITUTION (§ 205.4(d)(3))

SEC TIO N A (6)— D ISC LO SU R E O F C H A R G E S
FO R T R A N SF E R S OR R IG H T TO M AK E
T R A N SF E R S (8 205.4(d)(5))

(a) Business day disclosure. Our business days
are (Monday through Friday) (Monday through
Saturday) (any day including Saturdays and Sun­
days). Holidays are (not) included.




(a) Per transfer charge. We will charge you
[insert dollar amount] for each transfer you make
16

REGULATION E

STATUTORY APPENDIX

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 minimum balance charge. We
will only charge you for using our (automated
teller machines) (telephone bill-payment service)
(point-of-sale transfer service) if the (average)
(minimum) balance in your (checking account)
(savings account) (accounts) falls below [insert dol­
lar amount]. If it does, we will charge you [insert
dollar amount] each (transfer) ([insert time pe­
riod]).




17

SECTION A(7)—DISCLOSURE OF ACCOUNT
INFORMATION TO THIRD PARTIES
(8 205.4(d)(6))
(a)
Account information disclosure. We will
disclose information to third parties about your
account or the transfers you make:
(1) where it is necessary for completing
transfers.
or
(2) in order to verify the existence and con­
dition 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.

STATUTORY APPENDIX

REGULATION E

APPENDIX B

FEDERAL ENFORCEMENT 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
State Member Banks
Federal Reserve Bank serving the district in which the State member bank is located.
Nonmember Insured Banks
Federal Deposit Insurance Corporation Regional Director for the region in which the nonmember
insured bank is located.
Savings Institutions Insured by the FSLIC and Members of the FHLB System
(except for Savings Banks insured by FDIC)
The Federal Home Loan Bank Board Supervisory Agent in the district in which the institution is
located.
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
Brokers and Dealers
Division of Market Regulations
Securities and Exchange Commission
Washington, D.C. 20549
Retail, Department Stores, Consumer Finance Companies, AH Non-Federally Insured Financial Institu­
tions, and All Nonbank Debit Card Issuers
Federal Trade Commission
Electronic Fund Transfers
Washington, D.C. 20580




18

FEDERAL RESERVE BANK
OF NEW YORK

CONTENTS
Rules of the Board of Governors of the Federal Reserve System

Rules Regarding Availability of Information
Rules Regarding Access To and Review Of Personal Information in
Systems of Records
Rules Regarding Public Observation of Meetings
Rules Regarding Delegation of Authority
Rules of Organization
Rules of Procedure
Rules of Practice for Formal Hearings

Regulations of the Board of Governors of the Federal Reserve System

Rules of Organization and Procedure of the Consumer Advisory Council
Rev. 7/79



z r

h o x

A
B
C
D
E
F

o

Extensions of Credit by Federal Reserve Banks..............................................
Equal Credit Opportunity................................................................................
Home Mortgage Disclosure.............................................................................
Reserves of Member Banks.............................................................................
Electronic Fund Transfers...............................................................................
Securities of Member State Banks...................................................................
Securities Credit Transactions—
Rules Governing Borrowers Who Obtain Securities Credit ....................
Securities Credit by Persons Other Than Banks,Brokers, or Dealers__
Credit by Brokers and Dealers................................................................
Credit by Banks for the Purpose of Purchasing
or Carrying Margin Stocks...................................................................
Membership of State Banking Institutions in the Federal Reserve System
Issue and Cancellation of Capital Stock of Federal Reserve Banks................
Collection of Checks and Other Items and Transfers of F unds.......................
International Banking Operations...................................................................
Management Official Interlocks......................................................................
Relations with Foreign Banks and Bankers....................................................
Loans to Executive Officers. Directors, and Principal Shareholders
of Member Banks...................................................................................
Minimum Security Devices and Procedures for Federal Reserve Banks
and State Member Banks........................................................................
Interest on Deposits ........................................................................................
Relationships with Dealers in Securities Under Section 32 of the
Banking Act of 1933 ...............................................................................
Loan Guarantees for Defense Production ........................................................
Bank Holding Companies and Change in Bank Control..................................
Truth in Lending...............................
Unfair or Deceptive Acts or Practices.............................................................
Community Reinvestment................................................................................

AA
BB