Electronic Funds Transfer - any transfer of funds that instructs a financial institution to debit or credit an account, other than that originated by check, draft, or paper instrument.

Reg E Flashcards by Daniel or Nichoel Casey

What is an EFT?

Electronic Funds Transfer

any transfer of funds that instructs a financial institution to debit or credit an account, other than that originated by check, draft, or paper instrument.

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EFT transfers are generally initiated through:

an electronic terminal, telephone, computer, or magnetic tape.

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T or F

Reg E covers business accounts?

FALSE

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Reg E covers payments authorized by a consumer and initiated by using the consumer’s check if:

the check is used as a source of information for a one time EFT (however, checks are not considered access devices).

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T or F

Reg E does not cover electronic check re-presentment when a check is returned.

TRUE

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What is a preauthorized EFT?

a transfer that is authorized in advance to occur at substantially regular intervals

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T or F

Wire transfers between banks or businesses sent through Fedwire or a similar wire transfer system are exempted from Reg E?

TRUE

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Reg E exempts transfers under an agreement with the consumer to transfer funds between:

* accounts of the consumer

* the consumer and other members of their family

* from the institution to their consumer

* from the consumer to an account of the institution (so long as these transfers are within the same institution)

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Reg E exempts telephone transfers that are:

* not recurring

* initiated by a telephone communication between the consumer and the financial institution

* not part of a bill payment plan

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Reg E exempts trust accounts that are subject to:

a bona fide trust agreement.

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Reg E exempts preauthorized transfers at institutions with _________ in assets on the preceding Dec 31.

$100 million

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T or F

Institutions must provide required Reg E disclosures to all customers on the account.

FALSE

if multiple consumers, may provide only one set of disclosures

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Reg E initial disclosures must be provided:

at the time a consumer contracts for an EFT service or before the first EFT is made.

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Reg E initial disclosures must include a summary of _____________ for unauthorized transfers.

the consumer’s liability

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Reg E initial disclosures must include the telephone number and address of:

the person or office to be notified in case of unauthorized transfers.

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T or F

Reg E initial disclosures must include the institutions business days.

TRUE

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Reg E initial disclosures must include the ____ of EFT the customers can make and ________.

* type

* any limitations or charges

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Reg E initial disclosures must include a summary of the consumer’s right to:

* receive documentation, receipts, statements, and notices

* stop payment of preauthorized EFTs and procedures for stopping payments

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T or F

Reg E initial disclosures must include an error resolution notice.

TRUE

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Receipts at electronic terminals must be made available:

at the time an EFT transfer is made.

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What must included on a receipt at electronic terminals?

* amount of the transfer and any charge for the transfer

* date

* type of transfer and type of account

* number or code identifying the consumer’s account or access device

* terminal location

* name of third party where transferred

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It a transaction is _________ no receipt is required.

under $15

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ATM operators that impose a fee for EFTs or balance inquiries must disclose:

the amount of the fee onscreen or on paper before the consumer becomes obligated to pay it.

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ATM operators may only impose a fee if the required notices are provided and:

the consumer agrees to continue with the transaction.

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Preauthorized transfers from a consumer's account must be:

authorized in writing, signed, or similarly authenticated by the consumer.

Notice to the consumer is required when a consumer's account is scheduled to be credited or debited by a preauthorized transfer from the _______ at least \_\_\_\_\_\_\_.

\* same payer \* once every 60 days (if the payer provides positive notice to the consumer, a notice is not required by the institution)

Notice of preauthorized transfers must be provided:

\* either orally or written \* within 2 business days after the transfer occurs or should have occurred \* or use alternative method

What is the alternative method of providing preauthorized transfer notice?

the institution may provide a readily available telephone number that the consumer may call to ascertain whether the transfer has occurred and disclose the number on the initial disclosure and on each periodic statement

Institutions must credit recurring preauthorized transfers:

as of the day they are received.

Transfers that vary in amount must be communicated to the designated payee within _____ before the scheduled transfer OR:

\* 10 \* give the consumer the option of receiving notice only when a transfer falls outside of a specified range

T or F Compulsory use of EFTs is prohibited in credit transactions except for credit extended in an overdraft credit plan or to keep an account at a specified minimum balance.

TRUE

Institutions may not require consumers to establish an account for receipt of EFTs with a particular institution as a condition of:

employment OR receipt of government benefits.

The person who initiates a check conversation must provide notice to the consumer at the time of conversion that the check:

may be processed as an EFT and obtain the consumer's authorization for the EFT.

Consumers are deemed to have authorized the check conversion if:

they move forward with the transaction.

For Point of Sale transactions, the check conversion notice must be posted:

in a prominent place and the consumer must receive a copy or a substantially similar notice.

The check conversion notice must state the funds may be debited\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_ and, if applicable, that the consumer's financial institution \_\_\_\_\_\_\_\_\_\_.

\* from the consumer's account as soon as the same day the payment is received \* will not return the check the consumer

If the consumer may have to pay a return item fee on the transaction, the notice must:

state this fact and the amount of any fee.

Reg E requires that periodic statements be mailed for \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_, but at least \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

\* monthly cycle in which an EFT occurs \* quarterly if no EFT occurs

Reg E periodic statements must disclose the account balances:

at the beginning and close of the statement period.

T or F A periodic statement is not required for accounts where the only EFT allowed is a preauthorized transfer to an account.

TRUE

Reg E requires the change in terms notice to be provided:

in writing to the consumer at least 21 days before the effective date

T or F Prior notice of the change in terms is always required.

FALSE Prior notice is not required if the change must be made immediately to maintain or restore security to the EFT system or an account.

Reg E error resolution notices must be provided in what two way?

\* at least once a year OR \* included with each periodic statement

Reg E error resolution notices must be substantially the same as

the form prescribed in the regulation

What is the consumer's liability if they notify the institution within 2 business days of learning of the loss or theft of an access device?

$50

What is the consumer's liability if they fail to notify the institution within 2 business days of learning of the loss or theft of an access device?

$500 OR \* the sum of the amount of unauthorized transfers made within the first two business days, up to $50 AND \* the amount of unauthorized transfers made after 2 business days and before the institution was notified. (The institution must establish that the loss over $50 would have occurred if the consumer had notified the institution within 2 business days to rise the liability to $500)

Reg E allows full liability to be imposed if the consumer does not notify the institution:

within 60 days of the institution's transmission of the statement on which the first unauthorized transfer first appears

State law will supersede Reg E only if:

the state law has more generous limitations of consumer liability

Consumer's notification of error should include:

\* the consumer's name and account number or information that allows the institution to identify the consumer's name and account number \* consumer's reasons for belief that an error exists and, if possible, the type, date, and amount of the error

Institutions should investigate the alleged error and determine if an error occurred within __________ or \_\_\_\_\_\_\_\_\_\_.

\* 10 business days \* extend the timelines and provide provisional credit as applicable

T or F An institution may withhold $100 f the provisional credit if it has reasonable belief that there has been an unauthorized transfer.

FALSE It may withhold $50

Institutions must notify the consumer of the provisional credit within ________ and include the account that was credited and the \_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_.

\* 2 business days \* date and amount of the crediting

The general 10 day dispute resolution timeline and 45 day provisional credit timeline may be extended to _______ and _____ for new accounts.

\* 20 business days \* 90 days

What constitutes a new account for the Reg E timeline extensions?

the alleged error occurs within 30 days after the first deposit to the account was made

The 45 day provisional credit timeline can be extended to 90 days on accounts that are not new if:

\* the transfer did not occur within a state, OR \* a point of sale debit card transaction

T or F An institution does not have to reinvestigate if it makes a final correction a consumer's account in the manner or amount alleged by the consumer to be in error.

TRUE

T or F If the bank determines that the customers pin was used the bank can assume the transaction was authorized.

FALSE Banks are required to take reasonable steps to determine whether the transaction was authorized.

Reg E requires that banks only issue access devices:

\* in response to an oral or written request \* as a renewal for a previously accepted device

Banks may issue unsolicited access devices if they are not validated, can only be validated by an oral or written request by the verified customer, and accompanied by:

an initial disclosure and a clear explanation that the device is not validated and how the consumer may dispose of it if validation is not desired

How can a customer stop payment on a preauthorized transfer?

notify the bank at least 3 days before the transfer is to occur

If the institution requires that the customer put their stop payment request in writing and the customer does not do so, how long is the oral stop payment good for?

14 days

What are the alternative period statement options for payroll cards?

\* account balance readily available through telephone line \* an electronic history of the account that covers at least 60 days preceding the time the consumer accesses the account \* a written account history of at least the last 60 days available upon request

Generally, an institution may not access a fee or charge for overdrafts on one time debit card or ATM transactions unless:

the customer has opted into the service

Institutions may not condition the payment of other overdrafts on the customers decision to opt into:

overdrafts for ATM and one time debit card transactions

What is a remittance transfer?

An EFT requested by the sender to a recipient receiving the funds in a foreign country sent by a person that provides remittance transfers in the ordinary course of business.

What is the de minimums exception for remittance transfers?

$15

A person will not be deemed to be providing remittance transfers for a consumer in the normal course of business if the person:

\* provided 100 or fewer remittance transfers in the previous calendar year AND in the correct calendar year

The remittance transfer provider must disclose on a receipt all of the disclosures required to be provided on the prepayment disclosures ______________ , or, in the case of a transaction conducted by telephone, \_\_\_\_\_\_\_\_\_\_.

\* at the time of the payment \* within one business day

A provider may combine the prepayment disclosure and the receipt provided:

that it's given to the sender in a timely manner, provide proof of payment, and it's in a retainable form.

Remittance transfer disclosures must be on the front of the page, segregated from other information, and at least in ____ font.

8 point (unless for mobile disclosures)

Mobile remittance transfer disclosures must be in the language:

used by the sender with the provider to send the transfer

A remittance transfer notice of error is timely if it is received by the provider:

no later than 180 days after the disclosed date of the availability of the funds OR 60 days after documentation is sent

Remittance transfer error investigations must be completed within:

90 days of receiving the notice of error

A remittance transfer provider must develop written policies and procedures designed to ensure compliance with the regulatory requirements. These procedures must also specifically include:

record retention provisions for documentation related to resolving errors.

A remittance transfer provider must cancel the transaction if an oral or written request is received:

within 30 minutes after the sender makes the payment (so long as the cancellation has enough information to identity the transaction and the funds have not already been picked up)

Upon cancellation, the remittance transfer provider must refund to the sender the:

entire amount of the transaction, including all fees and taxes, within 3 days.

Reg E requires that banks keep all records of compliance for not less than:

\* two years from the date the disclosures are provided OR \* until final disposition of open investigations or suits

Reg E Flashcards

(77 cards)