IBA Compliance Connection

Your go to source for compliance!

Our Electronic Funds Transfer (EFT) disclosure provides that a customer may withdraw no more than a specified amount per day, with a higher aggregate limit on total transactions per day. The disclosure also provides that cash withdrawal limits and point of sale limits are subject to change without notice. If an existing cardholder requests lower transaction limits (for a student, for example,) do we need to note that they are agreeing to a lower limit than disclosed?

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We recommend sending a written change in terms notice to a customer before enforcing stricter EFT limits than you have originally disclosed. Regulation E requires that you send your customer a change in terms notice reflecting lower limits on the frequency and dollar amount of transfers at least twenty-one days before they become effective. There is no exception to the change in terms notice requirements for changes requested by a customer.

For resources related to our guidance, please see:

  • Regulation E, 12 CFR 1005.7(b)(4) (“A financial institution shall provide the following disclosures, as applicable: . . . (4) The type of electronic fund transfers that the consumer may make and any limitations on the frequency and dollar amount of transfers.”)
  • Regulation E, 12 CFR 1005.8(a)(1)(iv) (“A financial institution shall mail or deliver a written notice to the consumer, at least 21 days before the effective date, of any change in a term or condition required to be disclosed under § 1005.7(b) of this part if the change would result in: . . . (iv) Stricter limitations on the frequency or dollar amount of transfers . . .”)