![]() In narrow circumstances, a financial institution can also be considered a “service provider” under Regulation E. See Electronic Fund Transfers Error Resolution Question 2 for more information about these error resolution obligations. The term financial institution does not include those excluded from coverage under section 1029 of the Dodd Frank Act.2(i).Īny entity that is considered a financial institution under Regulation E has error resolution obligations in the event that a consumer notifies the financial institution of an error, with limited exceptions.11. any other person that issues an access device and agrees with a consumer to provide electronic fund transfer (EFT) services.įinancial institutions include providers of P2P payment and bill payment services, if they directly or indirectly hold an account belonging to a consumer, or if they issue an access device and agree with a consumer to provide EFT services.any other person that directly or indirectly holds an account belonging to a consumer, or.Regulation E section 1005.2(i) defines financial institution under EFTA and Regulation E to include banks, savings associations, credit unions, and: See Electronic Fund Transfers Coverage: Financial Institutions Questions 3 and 4 for more information on the error resolution obligations of the financial institutions involved in a debit card pass-through payment. As discussed in Electronic Fund Transfers Coverage: Transactions Question 3, the term EFT includes debit card transactions, and therefore debit card “pass through” payments are EFTs.3(b)(1)(v). As discussed in Electronic Fund Transfers Coverage: Transactions Question 1, Regulation E applies to any EFT that authorizes a financial institution to debit or credit a consumer's account.3(a). A “pass-through” payment is initiated through a financial institution that does not hold a consumer’s account, for example, a non-bank P2P provider. Generally, a “pass-through” payment transfers funds from the consumer’s account held by an external financial institution to another person’s account held by an external financial institution. See Electronic Fund Transfers Error Resolution: Unauthorized EFTs Question 1 for more information on the definition of an unauthorized EFT. In these cases, the credit-push P2P transfer would be considered an unauthorized EFT. A credit-push P2P payment is considered a transfer initiated through an electronic terminal, telephone, or computer for the purpose of ordering, instructing, or authorizing a financial institution to debit a consumer's account, and accordingly is an EFT.Ī credit-push P2P transfer is considered an EFT even if the payment was initiated by a third party that fraudulently obtained access to consumer’s account, such as by using login credentials stolen in a data breach or obtained through fraudulent inducement. The term EFT means 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 financial institution to debit or credit a consumer's account.3(b)(1). ![]() Accordingly, Regulation E applies to any person-to-person (P2P) or mobile payment transactions that meet the definition of EFT, including debit card, ACH, prepaid account, and other electronic transfers to or from a consumer account.3(b)(1)(v) Comment 3(b)(1)-1.ii. The term “electronic fund transfer” or “EFT” means 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 financial institution to debit or credit a consumer's account.3(b)(1). It includes a prepaid account, as defined by Regulation E.2(b)(3). The term account means a demand deposit (checking), savings, or other consumer asset account (other than an occasional or incidental credit balance in a credit plan) held directly or indirectly by a financial institution and established primarily for personal, family, or household purposes.2(b)(1). The Electronic Fund Transfer Act (EFTA) and Regulation E apply to an electronic fund transfer that authorizes a financial institution to debit or credit a consumer's account.3(a).
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