Regulation E: Electronic Fund Transfers
Regulation E: Electronic Fund Transfer Act is designed to protect consumers making electronic fund transfers. The term "electronic fund transfer" (EFT) generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or debit a consumer's asset account.
The Electronic Fund Transfer Act (also known as Regulation E), outlines the rules and procedures for electronic funds transfer (EFTs). The following describes some examples of what is covered and not covered under Regulation E:
|What is covered?||What is not covered?|
Any transfer of funds that are initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account. The term includes, but is not limited to:
- Point-of-sale transfers;
- Automated teller machine transfers;
- Direct deposits or withdrawals of funds;
- Transfers initiated by telephone;
- Transfers resulting from debit card transactions, whether or not initiated through an electronic terminal;
- Electronic check conversion, whereby you may authorize a merchant or other payee to make a one-time electronic payment from your checking account using information from your check to pay for purchases or pay bills; and
- Electronic returned check charge, whereby you authorize a merchant or other payee to initiate an electronic fund transfer to collect a charge in the event a check is returned for insufficient funds.
- Check guarantee or authorization;
- Wire or other similar transfers through Fedwire;
- Securities and commodities transfers;
- Automatic transfers by account-holding institutions;
- Any preauthorized transfer to or from an
account if the assets of the account-holding financial institution where $100
million or less on the preceding December 31 and
- Telephone-initiated transfers. Any transfer of funds that:
- Is initiated by a telephone communication between a consumer and a financial institution making the transfer; and
- Does not take place under a telephone bill-payment or other written plan in which periodic or recurring transfers are contemplated.
NOTE: A Regulation E (EFT) Disclosure, as required by regulation, is provided at the time the account is opened or a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer's asset account. The disclosure contains detailed information related the regulation.