Topic: Electronic Fund Transfer Act (EFTA)
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We’re switching our debit cards to a new network, which has different customer liability provisions than our existing network; otherwise the card terms and conditions are unchanged. Do we need to provide a change in terms notice, or do we need to take on the expense of mailing entirely new Regulation E notices?
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We are not aware of any requirement to send existing customers a new set of initial disclosures under Regulation E (provided that those customers have already received initial disclosures). Regulation E requires initial disclosures only “at the time a consumer contracts for an electronic fund transfer service or before the first electronic fund transfer is…
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As required by Regulation E, we disclose a limit on electronic withdrawals from our deposit accounts. However, the actual dollar amount limit is slightly higher than the disclosed limit, because we include a small buffer against any fees that might be charged for an ATM withdrawal. Does this violate the Regulation E disclosure requirement?
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We do not believe that disclosing a slightly lower limit on the dollar amount of electronic fund transfers would violate the Electronic Fund Transfer Act (EFTA) disclosure requirements. Regulation E requires you to disclose “any limitations on the frequency and dollar amount of transfers.” 12 CFR 1005.7(b)(4). Neither the regulation nor the official staff commentary…
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We’re going to offer reloadable debit payroll cards, and we advertise that you can “get paid on your card with a direct deposit.” But the account agreement didn’t have the Regulation E disclosures for payroll cards. Do we need to include those disclosures?
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We believe Regulation E’s payroll card account rules (in 12 CFR 1005.18) would apply to the program you described. These rules apply to any “account that is directly or indirectly established through an employer and to which electronic fund transfers of the consumer’s wages, salary, or other employee compensation (such as commissions), are made on…
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We have debit cards that have never been activated. Can we deactivate them after giving a 30 day notice?
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We do not see any problem with cancelling debit cards that have never been activated by customers with a thirty day notice. Under Regulation E, the cancellation of an access device does not necessitate a change in terms notice. 12 CFR 1005.8(a)
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Can we charge cancellation and lost/stolen card fees on our general use, open loop, non-reloadable gift cards? If so, can we waive the fees? And, are we required to refund customers who cancel their gift cards?
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Lost/stolen card and cancellation fees We do not believe that Regulation E or Illinois law would prohibit a bank from charging fees for lost or stolen cards or for card cancellations, provided that such fees are disclosed in the card agreement. As a general rule, Regulation E restricts banks from charging three types of fees:…
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Under Regulation E, what kind of disclosure is necessary when a third party venue charges a service fee for use of an ATM that we own and operate, where we pass that fee on to the customer?
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We believe that you would be able to disclose fees charged by the proprietor of property in which you own an ATM, but we also recommend discussing the initial disclosure and any marketing language with bank counsel. (And, of course, all ATMs should on-screen notices that a fee will be charged and the amount of…
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Is there any law or regulation requiring us to post our name on all ATMs?
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We do not believe that you are required to post your name on your ATMs. Regulation E does not require that banks post their names on ATMs and requires only that they disclose any fees charged. See 12 CFR 1005.16
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If we are acquiring the assets of another bank, do we need to provide the debit card customers with any new disclosures?
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In general, new account disclosures may be required when the information being disclosed or the account terms differ from those of the predecessor bank. Regulation CC Disclosure Requirements For example, if any of the items required to be disclosed in your funds availability policy differs from the predecessor bank’s policy, we would recommend making new…
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Can we charge Link Card customers for using an ATM?
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Unfortunately, as we’ll explain below, this is one of those issues for which we think you should consult with your bank counsel. Looked at in isolation, Section 50 of the Illinois EFT Act would not allow you to charge a fee for Link Card withdrawals at ATMs in Illinois. 205 LCS 616/50(j). The Illinois Department of…
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Does Illinois law require that we mail out loan maturity or payoff notices?
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For open-end credit, Regulation Z requires that you include any loan payments on periodic statements. 12 CFR 1026.7(a)(3). Otherwise, we are not aware of any federal or Illinois laws that would require you to send a notice when a loan matures or when a customer makes a payment on a loan. We do recommend that…