6-2.1 Deposits - EFTA
Receive salary or other compensation through a payroll card account.
A consumer is deemed to request an access device for a payroll account when the consumer chooses to do what?
The financial institution has provided all of the following written disclosures to the consumer: o A summary of the consumer's liability for unauthorized EFTs. o The telephone number and address for reporting that an unauthorized EFT has been or may be made. o The financial institution's business days. Any access device used to affect the EFT was an accepted access device. The financial institution has provided a means to identify the consumer to whom the access device was issued.
A consumer may only be held liable for an unauthorized transaction, within the limitations set forth, if:
The account balance, through a readily available telephone line. An electronic history of account transactions covering at least 60 days preceding the date the consumer electronically accesses the account. A written history of the account transactions provided promptly in response to an oral or written request and covering at least 60 days preceding the date the financial institution receives the consumer's request.
A financial institution does not need to furnish the required periodic statements for payroll cards if the financial institution makes what available to the consumer?
Not validated - that is, it cannot be used to initiate an EFT. Accompanied by the explanation that it is not validated and how the consumer may dispose of it if the consumer does not wish to validate it. Accompanied by a complete disclosure of the consumer's rights and liabilities that will apply if the access device is validated. Validated only upon oral or written request from the consumer and after a verification of the consumer's identity by some reasonable means.
A financial institution may issue an unsolicited access device only if the access device meets all of the following criteria. The access device is:
10 business days of giving oral notice. The financial institution must provide the address where confirmation must be sent.
A financial institution may require a consumer to give written confirmation of an error within when?
If the notice of error involves an account subject to the margin requirements or other aspects of Regulation T.
A financial institution need not provisionally credit the account to take up to 45 calendar days to complete its investigation if the consumer fails to provide the required written confirmation of an oral notice of error, or if what?
The existence, amount, and frequency of any dormancy, inactivity, or service fee; The expiration date for the underlying funds (or the fact that the funds do not expire); A toll-free telephone number and (if any) a website that the consumer may use to obtain a replacement certificate or card if the certificate or card expires while underlying funds are still available; A statement that the certificate or card expires, but the underlying funds do not expire or expire later than the certificate or card, as well as a statement that the consumer may contact the issuer for a replacement card. This requirement does not apply to non-reloadable certificates or cards that expire seven years or more after the date of manufacture; and A toll-free telephone number and (if any) a website that the consumer may use to obtain information about fees.
A number of gift card disclosures must be made on the actual card. Making such disclosures in an accompanying terms and conditions document, on packaging surrounding a certificate or card, or on a sticker or other label affixed to the certificate or card does not constitute a disclosure on the certificate or card. Those disclosures include what?
Nonelectronic transfers.
A per-item fee for EFTs must be disclosed even if the same fee is imposed on what?
affirmative consent
An important feature of the opt in is that the consumer's _________ ________is necessary before the institution may charge overdraft fees for paying an ATM or one-time debit card transaction.
The consumer's liability for unauthorized EFTs, the types of EFTs the consumer may make, limits on the frequency or dollar amount, fees charged by the financial institution, and the error-resolution procedures.
EFT disclosures must give a summary of various consumer rights under the regulation, including what?
Point-of-sale (POS) transfers; automated teller machine (ATM) transfers; direct deposits or withdrawals of funds; transfers initiated by telephone; and transfers resulting from debit card transactions, whether or not initiated through an electronic terminal.
EFTs include, but are not limited to what?
Consumer's check
Financial institutions must disclose the fact that one-time EFTs initiated using information from what are among the types of transfers that a consumer can make?
The first EFT is made or at the time the consumer contracts for an EFT service.
Financial institutions must provide initial disclosures of the terms and conditions of EFT services before when?
Unlimited liability for unauthorized transfers occurring 60 calendar days after the periodic statement and before notice to the financial institution.
For an unauthorized transfer(s) not involving loss or theft of an access device, the consumer notifies the bank more than 60 calendar days after transmittal of the periodic statement on which the unauthorized transfer first appears, their maximum liability is what?
No liability.
For an unauthorized transfer(s) not involving loss or theft of an access device, the consumer notifies the bank within 60 calendar days after transmittal of the periodic statement on which the unauthorized transfer first appears, their maximum liability is what?
The nature of the transaction.
For transactions involving access devices that also function as credit cards, the liability and error resolution provisions or Regulation Z will apply depending on what?
Issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in a specified amount, whether or not that amount may be increased or reloaded, in exchange for payment; and That is redeemable upon presentation at multiple, unaffiliated merchants for goods or services, or that may be usable at automated teller machines.
General-use prepaid card is a card, code, or other device that does what?
a. Regulation E b. Regulation Z
If a combined access device-credit card is stolen and unauthorized transactions are made by using the card as both a debit card and a credit card, what will apply to the unauthorized transactions in which the card was used as a debit card, and what will apply to the unauthorized transactions in which the card was used as a credit card?
Increased fees or charges; Increased liability for the consumer; Fewer types of available EFTs; or Stricter limitations on the frequency or dollar amounts of transfers.
If a financial institution contemplates a change in terms, it must mail or deliver a written or electronic notice to the consumer at least 21 days before the effective date of any change in a term or condition required to be disclosed if the change would result in any of what terms?
20 and 90 days, respectively.
If a notice involves an error that occurred within 30 days after the first deposit to the account was made, the time periods are extended from 10 and 45 days, to what?
An EFT.
If a payee re-presents electronically a check that has been returned unpaid, the transaction is not what?
One of the two accounts.
If a transfer occurs between two accounts of the consumer at the same financial institution, the transfer need only be documented for what?
Lesser of $500, OR the sum of: (a) $50 or the total amount of unauthorized transfers occurring in the first two business days, whichever is less; AND (b) The amount of unauthorized transfers occurring after two business days and before notice to the financial institution.
If more than two business days and up to 60 calendar days, after learning of loss or theft of their access device, the consumer notifies the bank, their maximum liability for an unauthorized transaction is what?
A notice of the consumer's rights to request the documents upon which the financial institution relied in making its determination.
If the financial institution determines that no error occurred or that an error occurred in a different manner or amount from that described by the consumer, the financial institution must mail or deliver a written explanation of its findings within three business days after concluding its investigation. The explanation must include what?
That both alternative plans are offered. If the institution offers one, but not the other, it must state in its opt-in notice the alternative plan that it offers. If the institution does not offer either plan, it should omit the reference to the alternative plans. If the financial institution offers additional alternatives for paying overdrafts, it may (but is not required to) disclose those alternatives.
If the institution offers both a line of credit subject to Regulation Z and a service that transfers funds from another account of the consumer held at the institution to cover overdrafts, the institution must state what in its opt-in notice?
90 days
If the notice of error involves a transaction that was not initiated in a state or resulted from a point-of-sale debit card transaction, the 45-day period is extended to what?
Regulation E
If the unauthorized use of a combined access device credit card involves only an EFT, for example, debit card purchases or cash withdrawals at an ATM from a checking account, only the error resolution provisions of what will apply?
Regulation Z
If the unauthorized use of a combined access device credit card solely involves an extension of credit and does not involve an EFT, for example, when the card is used to draw cash advances directly from a credit line, only the error resolution provisions of what will apply?
Lesser of $50, OR total amount of unauthorized transfers.
If within two business days after learning of loss or theft of their access device, the consumer notifies the bank, their maximum liability for an unauthorized transaction is what?
To the payment of overdrafts for checks and other transactions. The account terms, conditions and features must be the same for consumers who opt in and for those who do not.
Institutions may not require an opt in for ATM and one-time debit transactions as a condition for what?
For transfers occurring within the 60-day period, the lesser of $500, OR the sum of (a) Lesser of $50 or the amount of unauthorized transfers in first two business days; AND (b) The amount of unauthorized transfers occurring after two business days. For transfers occurring after the 60-day period, unlimited liability (until the financial institution is notified)
More than 60 calendar days after transmittal of statement showing first unauthorized transfer made with access device, the customer then notifies the bank, their maximum liability is what?
There has been no activity with respect to the certificate or card within the one-year period prior to the imposition of the fee; Only one such fee is assessed in a given calendar month; and Disclosures regarding dormancy, inactivity, or service fees are clearly and conspicuously stated on the certificate or card, and the person issuing or selling the certificate or card has provided these disclosures to the purchaser before the certificate or card is purchased.
No person may impose a dormancy, inactivity, or service fee with respect to a gift certificate, store gift card, or general-use prepaid card, unless what three conditions are satisfied?
A written confirmation (or electronic, if the consumer agrees) that the consumer has consented, along with a statement informing the consumer of the right to revoke the consent at any time.
Not only must the consumer affirmatively consent to opt-in, but what must the institution mail or deliver to the consumer?
Circumstances leading to the reasonable belief that an unauthorized transfer has been or may be made.
Notice may also be considered given when the financial institution becomes aware of what?
Preauthorized transfers
On their Reg E disclosures, financial institutions are not required to list this among the types of transfers that a consumer can make?
Quarterly
Other accounts that may be accessed only by preauthorized transfers to the account, the financial institution must send a periodic statement at least how often?
1. The consumer was negligent (e.g., wrote a PIN on an ATM card); 2. An agreement between the consumer and the financial institution provides for greater liability; or 3. The consumer is liable for a greater amount under state law.
Reg E prohibits the following factors as the basis for imposing greater liability than is permissible:
Disclose the restriction as a limitation on the frequency of EFTs.
Regulation D restricts the number of payments to third parties that may be made from a money market deposit account; a financial institution that does not execute fund transfers in excess of those limits must do what?
A check or EFT returned unpaid.
Subpart A of Reg E, applies to a fee collected electronically from a consumer's account for what?
Any electronic fund transfer (EFT) that authorizes a financial institution to debit or credit a consumer's account.
Subpart A of Regulation E applies to what?
A preexisting agreement between the consumer and a financial institution to extend credit only to cover overdrafts (or to maintain a specified minimum balance).
The EFTA and Regulation E also apply to the issuance of an access device that permits credit extensions under what?
EFTs
The EFTA and Regulation E apply when the capability to initiate ________ is added to an accepted credit card (as defined under Regulation Z).
The issuance of a credit card that is also an access device.
The Truth in Lending Act and Regulation Z govern the addition of a credit feature to an accepted access device, and what?
The consumer's promptness in notifying the financial institution.
The extent of the consumer's liability on unauthorized transfers is determined solely by what?
Whether the consumer had knowledge of a loss or theft of the access device.
The fact that a consumer has received a periodic statement reflecting an unauthorized transaction is a factor, but not conclusive evidence, in determining what?
three
The financial institution must provide within how many business days of the completed investigation an oral or written report of the correction to the consumer and, as applicable, notify the consumer that the provisional credit has been made final.
Useable solely for telephone services; Reloadable and not marketed or labeled as a gift card or gift certificate. For purposes of this exception, the term "reloadable" includes a temporary non-reloadable card issued solely in connection with a reloadable card, code, or other device; A loyalty, award, or promotional gift card (except that these must disclose on the card or device itself, information such as the date the funds expire, fee information and a toll-free number); Not marketed to the general public; Issued in paper form only; or Redeemable solely for admission to events or venues at a particular location or group of affiliated locations, or to obtain goods or services in conjunction with admission to such events or venues, at the event or venue or at specific locations affiliated with and in geographic proximity to the event or venue.
The following cards, codes, or other devices are excluded and not subject to the substantive restrictions on imposing dormancy, inactivity, or service fees, or on expiration dates if they are what?
An agreement between the consumer and a financial institution to extend credit when the consumer's account is overdrawn, to maintain a specified minimum balance in the consumer's account, or under an overdraft service.
The liability and error resolution provisions apply to an extension of credit that occurs under what?
(i) the consumer and the financial institution or (ii) the consumer and a third party, when the account-holding financial institution has received notice of the agreement and the fund transfers have begun.
The requirements of subpart A of Regulation E apply only to accounts for which there is an agreement for EFT services to or from the account between who? (i) the consumer and the financial institution or (ii) the consumer and a third party, when the account-holding financial
A statement indicating that the card, code, or other device is issued for loyalty, award, or promotional purposes, which must be included on the front of the card, code, or other device; The expiration date for the underlying funds, which must be included on the front of the card, code, or other device; The amount of any fees that may be imposed in connection with the card, code, or other device, and the conditions under which they may be imposed, which must be provided on or with the card, code, or other device; and A toll-free telephone number and, if one is maintained, a website, that a consumer may use to obtain fee information, which must be included on the card, code, or other device.
To qualify for the exclusion for loyalty, award, or promotional gift cards, What must be disclosed?
First provide the liability disclosures.
Under Reg E, a financial institution does not need to provide the liability disclosures if it imposes no liability. If it later decides to impose liability, it must do what?
Five business days after transmittal of the notice. The financial institution need honor only items that it would have paid if the provisionally credited funds had not been debited.
Upon debiting a provisionally credited amount, the financial institution must notify the consumer of the date and amount of the debit and of the fact that the financial institution will honor (without charge) checks, drafts, or similar paper instruments payable to third parties and preauthorized debits for how long?
A card, code, or other device issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in a specified amount that may not be increased or reloaded in exchange for payment and redeemable upon presentation at a single merchant or an affiliated group of merchants for goods or services
What is a gift certificate?
A card, code, or other device (1) issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in connection with a loyalty, award, or promotional program; (2) that is redeemable upon presentation at one or more merchants for goods or services, or usable at automated teller machines; and (3) that sets forth certain disclosures, including a statement indicating that the card, code, or other device is issued for loyalty, award, or promotional purposes
What is a loyalty, award, or promotional gift card?
An EFT authorized in advance to recur at substantially regular intervals.
What is a preauthorized electronic fund transfer?
A periodic fee for holding or use of a gift certificate, store gift card, or general-use prepaid card. A periodic fee includes any fee that may be imposed on a gift certificate, store gift card, or general-use prepaid card from time to time for holding or using the certificate or card. For example, a service fee may include a monthly maintenance fee, a transaction fee, an ATM fee, a reload fee, a foreign currency transaction fee, or a balance inquiry fee, whether or not the fee is waived for a certain period of time or is only imposed after a certain period of time.
What is a service fee on gift or general use prepaid cards?
A service fee does not include a one-time fee or a fee that is unlikely to be imposed more than once while the underlying funds are still valid, such as an initial issuance fee, a cash-out fee, a supplemental card fee, or a lost or stolen certificate or card replacement fee.
What is not considered a service fee on gift or general use prepaid cards?
Agreement between the financial institution and the third party for the type of EFT involved.
When investigating a claim of error, the financial institution need only review its own records if the alleged error concerns a transfer to or from a third party, and there is no what?
