When a customer opens a consumer deposit account, we provide an initial disclosure with all eleven of the Regulation E disclosures required in 12 CFR 1005.7(b). After opening a deposit account, our customers can choose at any time to enroll themselves in online banking, which includes the ability to transfer funds between accounts, use online bill pay to make electronic payments, and make person-to-person (P2P) payments. One of our vendors provides suggested language to use in the contracts that our customers must agree to when enrolling in online banking, but the language does not include all eleven of the Regulation E disclosures. Do our contracts for online banking services need to include all eleven disclosures?

Your contracts for online banking services do not necessarily need to include all eleven of the Regulation E disclosures for electronic fund transfer (EFT) services if some of those disclosures are inapplicable. The disclosures also may be provided in a separate document from your contract.

You are required to provide only the “applicable” disclosures of the eleven EFT disclosures required by Section 1005.7(b). Consequently, we believe that your disclosures may omit some of the eleven disclosures if they are inapplicable to your online banking EFT services. For example, you may be able to exclude the EFT and ATM fees disclosures if you do not charge those fees.

Importantly, when your customers enter into subsequent contracts for online banking services added after an account opening, you must repeat all applicable EFT disclosures, including those disclosures already covered in your initial EFT disclosure. Moreover, Regulation E requires financial institutions to provide the applicable EFT disclosures “in close proximity to the event requiring disclosure, for example, when the consumer contracts for a new service.” While it is permissible to provide early disclosures to customers who have not yet arranged to use your bank’s EFT services, you must repeat the EFT disclosures when those customers contract directly with your bank for a new EFT service unless the customer added the new EFT service within “close proximity” of the account opening, when they received your initial EFT disclosure.

Your online banking services would qualify as “new EFT services,” since EFTs include transfers of funds “initiated through . . . [a] computer . . . for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer’s account.” Although some of your customers may enroll in online banking shortly after –i.e., within “close proximity to” – receiving their initial EFT disclosure when opening their account, others who wait to enroll in the new services for several months or more should receive new EFT disclosures. Consequently, we recommend repeating the applicable Regulation E disclosures in your separate contracts for online banking services (or in a separate document provided therewith) to ensure that every customer receives the required disclosures in “close proximity” to enrolling in the new EFT services.

For resources related to our guidance, please see:

Regulation E, 12 CFR 1005.7(a) (“A financial institution shall make the disclosures required by this section at the time a consumer contracts for an electronic fund transfer service or before the first electronic fund transfer is made involving the consumer’s account.”)

Regulation E, Official Interpretations, Paragraph 4(a), Comment 1 (“The disclosures required by this part must be in a clear and readily understandable written form that the consumer may retain. Additionally, except as otherwise set forth in §§ 1005.18(b)(7) and 1005.31(c), no particular rules govern type size, number of pages, or the relative conspicuousness of various terms. Numbers or codes are considered readily understandable if explained elsewhere on the disclosure form.”)

Regulation E, 12 CFR 1005.7(b) (“A financial institution shall provide the following disclosures, as applicable: (1) Liability of consumer. . . . (2) Telephone number and address. . . . (3) Business days. . . . (4) Types of transfers; limitations. . . . (5) Fees. . . . (6) Documentation. . . . (7) Stop payment. . . . (8) Liability of institution. . . . (9) Confidentiality. . . . (10) Error resolution. . . . (11) ATM fees. . . .”)

Regulation E, Official Interpretations, Paragraph 7(a), Comment 1 (“Disclosures given by a financial institution earlier than the regulation requires (for example, when the consumer opens a checking account) need not be repeated when the consumer later enters into an agreement with a third party to initiate preauthorized transfers to or from the consumer’s account, unless the terms and conditions differ from those that the institution previously disclosed. This interpretation also applies to any notice provided about one-time EFTs from a consumer’s account initiated using information from the consumer’s check. On the other hand, if an agreement for EFT services to be provided by an account-holding institution is directly between the consumer and the account-holding institution, disclosures must be given in close proximity to the event requiring disclosure, for example, when the consumer contracts for a new service.”)

Regulation E, Official Interpretations, Paragraph 7(a), Comment 5 (“An institution may provide disclosures covering all EFT services that it offers, even if some consumers have not arranged to use all services.”)

Regulation E, 12 CFR 1005.3(b)(1) (“The term ‘electronic fund transfer’ 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. The term includes, but is not limited to: (i) Point-of-sale transfers; (ii) Automated teller machine transfers; (iii) Direct deposits or withdrawals of funds; (iv) Transfers initiated by telephone; and (v) Transfers resulting from debit card transactions, whether or not initiated through an electronic terminal.”)