PS: Chapter 14 Set 1

vii. As long as a consumer is involved

, Reg E is there. Reg E only cares about the consumer. Don't worry about what's going on with the banks.

iii. Electronic Funds Transfer: Any transfer of funds that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a bank to debit or credit a customer's account. The term includes, but is not limited to:

1. point-of-sale (POS) transfers (use debit card at Walmart); 2. ATM transfers; 3. direct deposits or withdrawals of funds; 4. transfers initiated by telephone; 5. transfers resulting from debit card transactions, whether or not initiated through an electronic terminal; 6. electronic check conversion (write check to Walmart, they put it through the machine and hand it back) 7. deposit made at an ATM or other electronic terminal; 8. bill payment service done through electronic means.

d. Access Device

An access device is a card, code, or other means of access to a consumer's account that may be used to initiate EFTs. The term includes debit cards, personal identification numbers (PIN's), telephone transfer and telephone bill payment codes, and other means that may be used by a consumer to initiate an EFT to or from a consumer account

g. Unauthorized Electronic Funds Transfer

An unauthorized EFT is an electronic fund transfer (single or series) from a consumer's account initiated by a person other than the depositor (person who owned the account) without actual authority to initiate the transfer and from which the depositor receives no benefit.

iii. Electronic Funds Transfer

Any transfer of funds that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a bank to debit or credit a customer's account. The term includes, but is not limited to:

a. Consumer Funds Transfers. i. Electronic Funds Transfer Act (Federal Reserve Regulation E now under

Consumer Financial Protection Bureau);

1. An unauthorized EFT includes a transfer initiated by

a person who obtained the access device from the consumer through fraud or robbery.

3. Accounts not covered by Reg E include:

a. IRAs and HSAs (accounts covered by trust or custodial plans); b. Escrow accounts; c. Accounts to purchase US Savings Bonds.

d. Access Device ii. Customer said they wanted to use it, wouldn't work until you got a PIN, or it replaces one you already had. To put any liability on the consumer at all for something like a debit card, must

accept it

f. Preauthorized Electronic Funds Transfer 1. An EFT authorized by the consumer in

advance that will take place on a recurring basis at substantially regular intervals.

c. What is not an Electronic Funds Transfer?

i. Check; ii. Wire Transfer; iii. Check guarantee or authorization transfers; iv. Securities transactions; v. Internal transfers within an institution; vi. Telephone-initiated transfer (where instructions given to live person) and not under a written agreement.

d. Access Device: An access device is a card, code, or other means of access to a consumer's account that may be used to initiate EFTs. The term includes debit cards, personal identification numbers (PIN's), telephone transfer and telephone bill payment codes, and other means that may be used by a consumer to initiate an EFT to or from a consumer account. example

i. Debit card, pin number

Access Device: An access device becomes an "accepted access device" when the consumer:

i. Requests and receives, or signs, or uses the access device to transfer money between accounts or to obtain money, property, or services; ii. Requests validation of an access device issued on an unsolicited basis; or iii. Receives an access device in renewal of, or in substitution for, an accepted access device

ii. If not subject to the EFTA, then:

iii. NACHA Rules (which uses different terminology: originator, ODFI, ACH Operator, RDFI and receiver- see page 684-685) iv. Article 4a v. Federal Reserve Regulation J- Fedwire vi. Other local clearinghouse rules

f. Preauthorized Electronic Funds Transfer 2. No further action by the consumer will be required to

initiate the transfer. If the consumer must take action each month to initiate a payment (such as by entering instructions on a touch-tone telephone or home computer), the payments are not preauthorized EFTs.

ii. 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

i. Account 1. Any account directly

owned by a consumer will be protected: checking savings, payroll cards, gift cards.

i. Account 2. A checking, savings, or other consumer (natural person) asset account established primarily for

personal, family, or household purposes. The term includes a retail repurchase agreement. Also includes most payroll cards and gift cards.

viii. Reg E standards are

super protected

2. An EFT at an automated teller machine (ATM) is an unauthorized transfer if

the consumer has been induced by force to initiate the transfer.