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Electronic Fund Transfer Act
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Electronic Fund Transfer Act
Other short titles
Financial Institutions Regulatory and Interest Rate Control Act of 1978
Change in Bank Control Act
Change in Savings and Loan Control Act
Depository Institution Management Interlocks Act
Export-Import Bank Act Amendments
Federal Financial Institutions Examination Council Act
National Credit Union Central Liquidity Facility Act
Right to Financial Privacy Act
Long title
An Act to extend the authority for the flexible regulation of interest rates on deposits and accounts in depository institutions.
Nicknames
American Arts Gold Medallion Act
Enacted by
the 95th United States Congress
Effective
November 10, 1978
Citations
Public law
95-630
Statutes at Large
92 Stat. 3641 aka 92 Stat. 3728
Codification
Titles amended
12 U.S.C.: Banks and Banking
15 U.S.C.: Commerce and Trade
U.S.C. sections amended
12 U.S.C. ch. 3 § 226 et seq.
15 U.S.C. ch. 41 § 1601 et seq.
15 U.S.C. ch. 41 § 1693 et seq.
Legislative history
Introduced in the House as H.R. 14279 by Fernand St. Germain (D-RI) on October 10, 1978
Committee consideration by House Banking, Finance, and Urban Affairs, Senate Banking, Housing, and Urban Affairs
Passed the House on October 11, 1978 (passed)
Passed the Senate on October 12, 1978 (passed) with amendment
House agreed to Senate amendment on October 14, 1978 (341-32, in lieu of H.Res. 1439) with further amendment
Senate agreed to House amendment on October 14, 1978 (agreed)
Signed into law by President Jimmy Carter on November 10, 1978
Major amendments
Credit CARD Act of 2009
The Electronic Fund Transfer Act was passed by the U.S. Congress in 1978 and signed by President Jimmy Carter, to establish the rights and liabilities of consumers as well as the responsibilities of all participants in electronic funds transfer activities.[1]
The act was implemented in Federal Reserve Board Regulation E.
Contents
[hide]
1 Rights of consumers
2 Financial institution liability
3 Limit to customer liability on loss or theft of card
4 EFT Errors
5 What the EFT Act Covers
6 See also
7 References
8 Further reading
Rights of consumers[edit]
The EFT Act recognizes their right to nominate the financial institution to which such payments are to be made.[2]
The EFT Act also prohibits a creditor or lender from requiring a consumer to repay a loan or other credit by electronic fund transfer, except when there is an overdraft on checking plans.[3]
Financial institution liability[edit]
The financial institution must give the customer notice of their liability in case the card is lost or stolen. This must include a phone number for reporting the loss and a description of its error resolution process.[2]
Limit to customer liability on loss or theft of card[edit]
If a customer reports to the financial institution that their card is missing before any transactions takes place, they are not held responsible for any transaction that takes place after the report of a missing/stolen card.
A customer can be liable for unauthorized withdrawals if their card is lost or stolen and they do not follow certain criteria:
Loss is limited to $50 if institution is notified within two business days
Loss could be up to $500 if institution is notified between 3 and 59 days
If loss is not reported within 60 business days customer risks unlimited loss on transfers made after the 60-day period – could lose all money in account plus maximum over draft if any[2]
EFT Errors[edit]
EFT is not a perfect system; therefore customers should still be diligent in reviewing their EFT statements for possible errors as they would with any other type of transaction. Should a customer notice that there has been an error in an electronic fund transfer relating to their account certain steps must be taken:
Under the Act, the customer must:
Write or call the financial institution immediately if possible
Must be no later than 60 days from the date of erroneous statement
Give their name and account number
Explain why they believe there is an error, the type, dollar amount and date
May be required to send details of the error in writing within 10 business days[2]
Under the Act, the financial institution must:
Promptly investigate the error and resolve it within 45 days
Errors involving new accounts (opened last 30 days), POS transactions, and foreign transactions may take up to 90 days
If it takes more than 10 business days to complete the investigation:
Must recredit the amount in question
For new accounts may take up to 20 business days to recredit the account
Must notify customer of the results of investigation:
If there was error – correct it or make recredit final
If no error – explanation in writing, notify customer of deducted recredit
Customer has the right to ask for copies of any documents relied on in the investigation[2]
What the EFT Act Covers[edit]
The EFT Act does not apply to all preauthorized plans. The EFT Act does not apply to automatic transfers from any account held in the name of the institution the consumer uses to the account the consumer uses.
An example of this would be where the EFT Act would not apply to any automatic payments put towards a mortgage held by the financial institution where a consumer would hold their electronic funds account.
The EFT Act would also not apply to automatic transfers among a consumer’s account at a specific financial institution.
The EFT Act also does not cover all transfers. Some banks, other financial institutions, and vendors will produce cards with a cash value imprinted into the card itself
Examples of these include public transit passes, store gift cards, and prepaid telephone cards. These cards may not be covered by the EFT Act.
When using electronic funds transfer, the Act does not give the consumer the right to stop payment.
State law or any contract that imposes a lower liability limit than those mentioned in the “Loss or Theft: Customer Liability” will be preempted (overridden) by the federal EFT Act unless the state law provides protections that are greater than that provided under Federal law. (See Section 919 of the Act).
See also[edit]
Electronic funds transfer
References[edit]
Jump up ^ [1]
^ Jump up to: a b c d e "Electronic Fund Transfers". Consumer Handbook to Credit Protection Laws. US Federal Reserve. Archived from the original on August 30, 2009. Retrieved 2009-09-01.
Jump up ^ "Consumer Information". Consumer Information.
Further reading[edit]
The Federal Reserve Board. (2001). Consumer Handbook to Credit Protection Laws: Electronic Fund Transfers. Retrieved June 26, 2006
Federal Trade Commission. (2003). Electronic Banking. Retrieved June 26, 2006
Lloyd, Crystal T. (n.d.). Electronic funds transfer act. Retrieved June 1, 2006
Regulation E at www.bankersonline.com
Regulation E at FDIC
W., C. H. (Oct 1983). "Overcoming the obstacles to implementation of point-of-sale electronic fund transfer systems: EFTA and the new uniform payments code". Virginia Law Review. Virginia Law Review. 69 (7): 1351–1379. doi:10.2307/1072866. JSTOR 1072866.
Brown, Tom; Plache, Lacey (Winter 2006). "Paying with plastic: maybe not so crazy". The University of Chicago Law Review. The University of Chicago Law Review. 73 (1): 63–86. JSTOR 4495544.
[hide]
v
t
e
Bank regulation in the United States
Federal authorities
Consumer Financial Protection Bureau
Farm Credit Administration
Federal Deposit Insurance Corporation
Federal Financial Institutions Examination Council
Federal Housing Finance Agency
Federal Reserve Board of Governors
Financial Stability Oversight Council
National Credit Union Administration
Office of the Comptroller of the Currency
Major federal legislation
Independent Treasury Act
National Bank Act
Federal Reserve Act
McFadden Act
1933 Banking Act
Glass–Steagall Act
Federal Credit Union Act
Bank Holding Company Act
Interest Rate Control Act of 1966
Truth in Lending Act
Bank Secrecy Act
Fair Credit Reporting Act
Home Mortgage Disclosure Act
Community Reinvestment Act
Electronic Fund Transfer Act
Financial Institutions Regulatory and Interest Rate Control Act of 1978
Monetary Control Act
Depository Institutions Act
Competitive Equality Banking Act of 1987
FIRREA
FDICIA
Truth in Savings Act
Riegle-Neal IBBEA
Gramm–Leach–Bliley Act
Fair and Accurate Credit Transactions Act
Emergency Economic Stabilization Act
Credit CARD Act
Dodd-Frank
Federal Reserve Board
regulations
Extensions of Credit by Federal Reserve Banks (Reg A)
Equal Credit Opportunity (Reg B)
Home Mortgage Disclosure (Reg C)
Reserve Requirements for Depository Institutions (Reg D)
Electronic Fund Transfer (Reg E)
Limitations on Interbank Liabilities (Reg F)
International Banking Operations (Reg K)
Consumer Leasing (Reg M)
Loans to Insiders (Reg O)
Privacy of Consumer Financial Information (Reg P)
Prohibition Against the Paying of Interest on Demand Deposits (Reg Q)
Credit by Brokers and Dealers (Reg T)
Credit by Banks and Persons Other Than Brokers or Dealers for the Purpose of Purchasing or Carrying Margin Stock (Reg U)
Transactions Between Member Banks and Their Affiliates (Reg W)
Borrowers of Securities Credit (Reg X)
Truth in Lending (Reg Z)
Unfair or Deceptive Acts or Practices (Reg AA)
Community Reinvestment (Reg BB)
Availability of Funds and Collection of Checks (Reg CC)
Truth in Savings (Reg DD)
Types of bank charter
Credit union
Federal savings association
Federal savings bank
National bank
State bank
State authorities
California
Colorado
Florida
Illinois
Maryland
Michigan
New Jersey
New York
Ohio
Oklahoma
Oregon
Pennsylvania
Tennessee
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Terms
Call report
CAEL Rating
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Thrift Financial Report
Other topics
Banking in the United States
Fair debt collection
History of central banking in the United States
Wildcat banking
Category
Portal
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United States federal banking legislation
95th United States Congress
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