Yes, we believe that Regulation E would apply because the person-to-person payments are executed by ACH transfer. As a result, your disclosures should comply with Regulation E’s disclosure and error resolution provisions.

From what you have told us, your error resolution notice does not appear to comply with Regulation E (and it may confuse customers if contrary to the error resolution language in your other account disclosures). Regulation E’s model error resolution notice requires customers to report errors “no later than 60 days after we sent the FIRST statement on which the problem or error appeared,” which accurately reflects Regulation E’s error resolution requirements. Your disclosures replace “the FIRST statement on which the problem or error appeared” with “the transaction in which the problem or error appears is first posted in the transaction history.” These timing requirements may differ significantly, to your customer’s detriment. A transaction might be posted to a customer’s transaction history almost immediately, while the first periodic statement required by Regulation E might not be sent until several weeks later.

In effect, your disclosures could be shortening a customer’s time frame for disputing transactions covered by Regulation E. We recommend contacting the third party vendor about revising the disclosures so that they are consistent with Regulation E and its error resolution requirements.

For resources related to our guidance, please see:

• Official Interpretations, Regulation E, 12 CFR 1005, Paragraph 3(b)(1), Comment 1(ii) (The term “electronic fund transfer” includes “a transfer sent via ACH. For example, social security benefits under the U.S. Treasury’s direct-deposit program are covered, even if the listing of payees and payment amounts reaches the account-holding institution by means of a computer printout from a correspondent bank.”)

• Regulation E, 12 CFR 1005.6(b)(3) (“A consumer must report an unauthorized electronic fund transfer that appears on a periodic statement within 60 days of the financial institution's transmittal of the statement to avoid liability for subsequent transfers. . . .”)

• Regulation E, Appendix A, Model Form A-3 — Model Forms for Error Resolution Notice (“We must hear from you no later than 60 days after we sent the FIRST statement on which the problem or error appeared.”)

• Regulation E, 12 CFR 1005.9(b) (“For an account to or from which electronic fund transfers can be made, a financial institution shall send a periodic statement for each monthly cycle in which an electronic fund transfer has occurred . . . .”)