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6500 - Consumer Financial Protection Bureau


PART 1005—ELECTRONIC FUND TRANSFERS (REGULATION E)

Subpart A—General

§ 1005.1 Authority and purpose.
§ 1005.2 Definitions.
§ 1005.3 Coverage.
§ 1005.4 General disclosure requirements; jointly offered services.
§ 1005.5 Issuance of access devices.
§ 1005.6 Liability of consumer for unauthorized transfers.
§ 1005.7 Initial disclosures.
§ 1005.8 Change in terms notice; error resolution notice.
§ 1005.9 Receipts at electronic terminals; periodic statements.
§ 1005.10 Preauthorized transfers.
§ 1005.11 Procedures for resolving errors.
§ 1005.12 Relation to other laws.
§ 1005.13 Administrative enforcement; record retention.
§ 1005.14 Electronic fund transfer service provider not holding consumer's account.
§ 1005.15 Electronic fund transfer of government benefits.
§ 1005.16 Disclosures at automated teller machines.
§ 1005.17 Requirements for overdraft services.
§ 1005.18 Requirements for financial institutions offering payroll card accounts.
§ 1005.20 Requirements for gift cards and gift certificates.

Subpart B—Requirements for Remittance Transfers

§ 1005.30 Remittance transfer definitions.
§ 1005.31 Disclosures.
§ 1005.32 Estimates.
§ 1005.33 Procedures for resolving errors.
§ 1005.34 Procedures for cancellation and refund of remittance transfers.
§ 1005.35 Acts of agents.
§ 1005.36 Transfers scheduled in advance.
Appendix A to Part 1005—Model Disclosure Clauses and Forms
Appendix B to Part 1005 [Reserved]
Appendix C to Part 1005—Issuance of Official Interpretations
Supplement I to Part 1005—Official Interpretations

AUTHORITY:  12 U.S.C. 5512, 5581; 15 U.S.C. 16913b. Subpart B is also issued under 12 U.S.C. 5601; Pub. L. 111--203, 124 1376 (2010)

SOURCE:  The provisions of this part 1005 appear at 76 Fed. Reg. 81023, Dec. 27, 2011, effective December 30, 2011 unless otherwise noted.

§ 1005.1  Authority and purpose.

(a)  Authority. The regulation in this part, known as Regulation E, is issued by the Bureau of Consumer Financial Protection (Bureau) pursuant to the Electronic Fund Transfer Act (15 U.S.C. 1693 et seq.). The information-collection requirements have been approved by the Office of Management and Budget under 44 U.S.C. 3501 et seq. and have been assigned OMB No. 3170-0014.

(b)  Purpose. This part carries out the purposes of the Electronic Fund Transfer Act, which establishes the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer and remittance transfer services and of financial institutions or other persons that offer these services. The primary objective of the act and this part is the protection of individual consumers engaging in electronic fund transfers and remittance transfers.

[Codified to 12 C.F.R. § 1005.1]

[Section 1005.1 amended at 77 Fed. Reg. 6285, February 7, 2012, The effective date of the Final Rules published February 7, 2012 (77 FR 6285) is delayed. The Bureau will publish a document in the Federal Register announcing the new effective date.]

§ 1005.2  Definitions.

Except as otherwise provided in subpart B, for purposes of this part, the following definitions apply:

(a)(1)  "Access device" means a card, code, or other means of access to a consumer's account, or any combination thereof, that may be used by the consumer to initiate electronic fund transfers.

(2)  An access device becomes an "accepted access device" when the consumer:

(i)  Requests and receives, or signs, or uses (or authorizes another to use) the access device to transfer money between accounts or to obtain money, property, or services;

(ii)  Requests validation of an access device issued on an unsolicited basis; or

(iii)  Receives an access device in renewal of, or in substitution for, an accepted access device from either the financial institution that initially issued the device or a successor.

(b)(1)  "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)  The term includes a "payroll card account" which is an 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 a recurring basis, whether the account is operated or managed by the employer, a third-party payroll processor, a depository institution or any other person. For rules governing payroll card accounts, see § 1005.18.

(3)  The term does not include an account held by a financial institution under a bona fide trust agreement.

(c)  "Act" means the Electronic Fund Transfer Act (Title IX of the Consumer Credit Protection Act, 15 U.S.C. 1693 et seq.).

(d)  "Business day" means any day on which the offices of the consumer's financial institution are open to the public for carrying on substantially all business functions.

(e)  "Consumer" means a natural person.

(f)  "Credit" means the right granted by a financial institution to a consumer to defer payment of debt, incur debt and defer its payment, or purchase property or services and defer payment therefor.

(g)  "Electronic fund transfer" is defined in § 1005.3.

(h)  "Electronic terminal" means an electronic device, other than a telephone operated by a consumer, through which a consumer may initiate an electronic fund transfer. The term includes, but is not limited to, point-of-sale terminals, automated teller machines (ATMs), and cash dispensing machines.

(i)  "Financial institution" means a bank, savings association, credit union, or any other person that directly or indirectly holds an account belonging to a consumer, or that issues an access device and agrees with a consumer to provide electronic fund transfer services, other than a person excluded from coverage of this part by section 1029 of the Consumer Financial Protection Act of 2010, Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111--203, 124 Stat. 1376.

(j)  "Person" means a natural person or an organization, including a corporation, government agency, estate, trust, partnership, proprietorship, cooperative, or association.

(k)  "Preauthorized electronic fund transfer" means an electronic fund transfer authorized in advance to recur at substantially regular intervals.

(l)  "State" means any state, territory, or possession of the United States; the District of Columbia; the Commonwealth of Puerto Rico; or any political subdivision of the thereof in this paragraph (l).

(m)  "Unauthorized electronic fund transfer" means an electronic fund transfer from a consumer's account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit. The term does not include an electronic fund transfer initiated:

(1)  By a person who was furnished the access device to the consumer's account by the consumer, unless the consumer has notified the financial institution that transfers by that person are no longer authorized;

(2)  With fraudulent intent by the consumer or any person acting in concert with the consumer; or

(3)  By the financial institution or its employee.

[Codified to 12 C.F.R. § 1005.2]

[Section 1005.2 amended at 77 Fed. Reg. 6285, February 7, 2012, The effective date of the Final Rules published February 7, 2012 (77 FR 6285) is delayed. The Bureau will publish a document in the Federal Register announcing the new effective date.]

§ 1005.3  Coverage.

(a)  General. This part applies to any electronic fund transfer that authorizes a financial institution to debit or credit a consumer's account. Generally, this part applies to financial institutions. For purposes of §§ 1005.3(b)(2) and (3), 1005.10(b), (d), and (e), 1005.13, and 1005.20, this part applies to any person, other than a person excluded from coverage of this part by section 1029 of the Consumer Financial Protection Act of 2010, Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Pub. L. 111--203, 124 Stat. 1376. The requirements of subpart B apply to remittance transfer providers.

(b)  Electronic fund transfer. (1) Definition. 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.

(2)  Electronic fund transfer using information from a check. (i) This part applies where a check, draft, or similar paper instrument is used as a source of information to initiate a one-time electronic fund transfer from a consumer's account. The consumer must authorize the transfer.

(ii)  The person initiating an electronic fund transfer using the consumer's check as a source of information for the transfer must provide a notice that the transaction will or may be processed as an electronic fund transfer, and obtain a consumer's authorization for each transfer. A consumer authorizes a one-time electronic fund transfer (in providing a check to a merchant or other payee for the MICR encoding, that is, the routing number of the financial institution, the consumer's account number and the serial number) when the consumer receives notice and goes forward with the underlying transaction. For point-of-sale transfers, the notice must be posted in a prominent and conspicuous location, and a copy thereof, or a substantially similar notice, must be provided to the consumer at the time of the transaction.

(iii)  A person may provide notices that are substantially similar to those set forth in Appendix A--6 to comply with the requirements of this paragraph (b)(2).

(3)  Collection of returned item fees via electronic fund transfer. (i) General. The person initiating an electronic fund transfer to collect a fee for the return of an electronic fund transfer or a check that is unpaid, including due to insufficient or uncollected funds in the consumer's account, must obtain the consumer's authorization for each transfer. A consumer authorizes a one-time electronic fund transfer from his or her account to pay the fee for the returned item or transfer if the person collecting the fee provides notice to the consumer stating that the person may electronically collect the fee, and the consumer goes forward with the underlying transaction. The notice must state that the fee will be collected by means of an electronic fund transfer from the consumer's account if the payment is returned unpaid and must disclose the dollar amount of the fee. If the fee may vary due to the amount of the transaction or due to other factors, then, except as otherwise provided in paragraph (b)(3)(ii) of this section, the person collecting the fee may disclose, in place of the dollar amount of the fee, an explanation of how the fee will be determined.

(ii)  Point-of-sale transactions. If a fee for an electronic fund transfer or check returned unpaid may be collected electronically in connection with a point-of-sale transaction, the person initiating an electronic fund transfer to collect the fee must post the notice described in paragraph (b)(3)(i) of this section in a prominent and conspicuous location. The person also must either provide the consumer with a copy of the posted notice (or a substantially similar notice) at the time of the transaction, or mail the copy (or a substantially similar notice) to the consumer's address as soon as reasonably practicable after the person initiates the electronic fund transfer to collect the fee. If the amount of the fee may vary due to the amount of the transaction or due to other factors, the posted notice may explain how the fee will be determined, but the notice provided to the consumer must state the dollar amount of the fee if the amount can be calculated at the time the notice is provided or mailed to the consumer.

(c)  Exclusions from coverage. The term "electronic fund transfer" does not include:

(1)  Checks. Any transfer of funds originated by check, draft, or similar paper instrument; or any payment made by check, draft, or similar paper instrument at an electronic terminal.

(2)  Check guarantee or authorization. Any transfer of funds that guarantees payment or authorizes acceptance of a check, draft, or similar paper instrument but that does not directly result in a debit or credit to a consumer's account.

(3)  Wire or other similar transfers. Any transfer of funds through Fedwire or through a similar wire transfer system that is used primarily for transfers between financial institutions or between businesses.

(4)  Securities and commodities transfers. Any transfer of funds the primary purpose of which is the purchase or sale of a security or commodity, if the security or commodity is:

(i)  Regulated by the Securities and Exchange Commission or the Commodity Futures Trading Commission;

(ii)  Purchased or sold through a broker-dealer regulated by the Securities and Exchange Commission or through a futures commission merchant regulated by the Commodity Futures Trading Commission; or

(iii)  Held in book-entry form by a Federal Reserve Bank or Federal agency.

(5)  Automatic transfers by account-holding institution. Any transfer of funds under an agreement between a consumer and a financial institution which provides that the institution will initiate individual transfers without a specific request from the consumer:

(i)  Between a consumer's accounts within the financial institution;

(ii)  From a consumer's account to an account of a member of the consumer's family held in the same financial institution; or

(iii)  Between a consumer's account and an account of the financial institution, except that these transfers remain subject to § 1005.10(e) regarding compulsory use and sections 916 and 917 of the Act regarding civil and criminal liability.

(6)  Telephone-initiated transfers. Any transfer of funds that:

(i)  Is initiated by a telephone communication between a consumer and a financial institution making the transfer; and

(ii)  Does not take place under a telephone bill-payment or other written plan in which periodic or recurring transfers are contemplated.

(7)  Small institutions. Any preauthorized transfer to or from an account if the assets of the account-holding financial institution were $100 million or less on the preceding December 31. If assets of the account-holding institution subsequently exceed $100 million, the institution's exemption for preauthorized transfers terminates one year from the end of the calendar year in which the assets exceed $100 million. Preauthorized transfers exempt under this paragraph (c)(7) remain subject to § 1005.10(e) regarding compulsory use and sections 916 and 917 of the Act regarding civil and criminal liability.

[Codified to 12 C.F.R. § 1005.3]

[Section 1005.3 amended at 77 Fed. Reg. 40459, July 10, 2012, effective February 7, 2012, The effective date of the Final Rules published July 10, 2012 (77 FR 40459) is delayed. The Bureau will publish a document in the Federal Register announcing the new effective date.]

§ 1005.4 General disclosure requirements; jointly offered services.

(a)(1)  Form of disclosures. Disclosures required under this part shall be clear and readily understandable, in writing, and in a form the consumer may keep, except as otherwise provided in this part. The disclosures required by this part may be provided to the consumer in electronic form, subject to compliance with the consumer-consent and other applicable provisions of the Electronic Signatures in Global and National Commerce Act (E-Sign Act) (15 U.S.C. 7001 et seq.). A financial institution may use commonly accepted or readily understandable abbreviations in complying with the disclosure requirements of this part.

(2)  Foreign language disclosures. Disclosures required under this part may be made in a language other than English, provided that the disclosures are made available in English upon the consumer's request.

(b)  Additional information; disclosures required by other laws. A financial institution may include additional information and may combine disclosures required by other laws (such as the Truth in Lending Act (15 U.S.C. 1601 et seq.) or the Truth in Savings Act (12 U.S.C. 4301 et seq.) with the disclosures required by this part.

(c)  Multiple accounts and account holders. (1) Multiple accounts. A financial institution may combine the required disclosures into a single statement for a consumer who holds more than one account at the institution.

(2)  Multiple account holders. For joint accounts held by two or more consumers, a financial institution need provide only one set of the required disclosures and may provide them to any of the account holders.

(d)  Services offered jointly. Financial institutions that provide electronic fund transfer services jointly may contract among themselves to comply with the requirements that this part imposes on any or all of them. An institution need make only the disclosures required by §§ 1005.7 and 1005.8 that are within its knowledge and within the purview of its relationship with the consumer for whom it holds an account.

[Codified to 12 C.F.R. § 1005.4]

§ 1005.5 Issuance of access devices.

(a)  Solicited issuance. Except as provided in paragraph (b) of this section, a financial institution may issue an access device to a consumer only:

(1)  In response to an oral or written request for the device; or

(2)  As a renewal of, or in substitution for, an accepted access device whether issued by the institution or a successor.

(b)  Unsolicited issuance. A financial institution may distribute an access device to a consumer on an unsolicited basis if the access device is:

(1)  Not validated, meaning that the institution has not yet performed all the procedures that would enable a consumer to initiate an electronic fund transfer using the access device;

(2)  Accompanied by a clear explanation that the access device is not validated and how the consumer may dispose of it if validation is not desired;

(3)  Accompanied by the disclosures required by § 1005.7, of the consumer's rights and liabilities that will apply if the access device is validated; and

(4)  Validated only in response to the consumer's oral or written request for validation, after the institution has verified the consumer's identity by a reasonable means.

[Codified to 12 C.F.R. § 1005.5]

§ 1005.6  Liability of consumer for unauthorized transfers.

(a)  Conditions for liability. A consumer may be held liable, within the limitations described in paragraph (b) of this section, for an unauthorized electronic fund transfer involving the consumer's account only if the financial institution has provided the disclosures required by § 1005.7(b)(1), (2), and (3). If the unauthorized transfer involved an access device, it must be an accepted access device and the financial institution must have provided a means to identify the consumer to whom it was issued.

(b)  Limitations on amount of liability. A consumer's liability for an unauthorized electronic fund transfer or a series of related unauthorized transfers shall be determined as follows:

(1)  Timely notice given. If the consumer notifies the financial institution within two business days after learning of the loss or theft of the access device, the consumer's liability shall not exceed the lesser of $50 or the amount of unauthorized transfers that occur before notice to the financial institution.

(2)  Timely notice not given. If the consumer fails to notify the financial institution within two business days after learning of the loss or theft of the access device, the consumer's liability shall not exceed the lesser of $500 or the sum of:

(i)  $50 or the amount of unauthorized transfers that occur within the two business days, whichever is less; and

(ii)  The amount of unauthorized transfers that occur after the close of two business days and before notice to the institution, provided the institution establishes that these transfers would not have occurred had the consumer notified the institution within that two-day period.

(3)  Periodic statement; timely notice not given. 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. If the consumer fails to do so, the consumer's liability shall not exceed the amount of the unauthorized transfers that occur after the close of the 60 days and before notice to the institution, and that the institution establishes would not have occurred had the consumer notified the institution within the 60-day period. When an access device is involved in the unauthorized transfer, the consumer may be liable for other amounts set forth in paragraphs (b)(1) or (b)(2) of this section, as applicable.

(4)  Extension of time limits. If the consumer's delay in notifying the financial institution was due to extenuating circumstances, the institution shall extend the times specified above to a reasonable period.

(5)  Notice to financial institution. (i) Notice to a financial institution is given when a consumer takes steps reasonably necessary to provide the institution with the pertinent information, whether or not a particular employee or agent of the institution actually receives the information.

(ii)  The consumer may notify the institution in person, by telephone, or in writing.

(iii)  Written notice is considered given at the time the consumer mails the notice or delivers it for transmission to the institution by any other usual means. Notice may be considered constructively given when the institution becomes aware of circumstances leading to the reasonable belief that an unauthorized transfer to or from the consumer's account has been or may be made.

(6)  Liability under state law or agreement. If state law or an agreement between the consumer and the financial institution imposes less liability than is provided by this section, the consumer's liability shall not exceed the amount imposed under the state law or agreement.

[Codified to 12 C.F.R. § 1005.6]

§ 1005.7  Initial disclosures.

(a)  Timing of disclosures. 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.

(b)  Content of disclosures. A financial institution shall provide the following disclosures, as applicable:

(1)  Liability of consumer. A summary of the consumer's liability, under § 1005.6 or under state or other applicable law or agreement, for unauthorized electronic fund transfers.

(2)  Telephone number and address. The telephone number and address of the person or office to be notified when the consumer believes that an unauthorized electronic fund transfer has been or may be made.

(3)  Business days. The financial institution's business days.

(4)  Types of transfers; limitations. The type of electronic fund transfers that the consumer may make and any limitations on the frequency and dollar amount of transfers. Details of the limitations need not be disclosed if confidentiality is essential to maintain the security of the electronic fund transfer system.

(5)  Fees. Any fees imposed by the financial institution for electronic fund transfers or for the right to make transfers.

(6)  Documentation. A summary of the consumer's right to receipts and periodic statements, as provided in § 1005.9 of this part, and notices regarding preauthorized transfers as provided in § 1005.10(a) and (d).

(7)  Stop payment. A summary of the consumer's right to stop payment of a preauthorized electronic fund transfer and the procedure for placing a stop-payment order, as provided in § 1005.10(c).

(8)  Liability of institution. A summary of the financial institution's liability to the consumer under section 910 of the Act for failure to make or to stop certain transfers.

(9)  Confidentiality. The circumstances under which, in the ordinary course of business, the financial institution may provide information concerning the consumer's account to third parties.

(10)  Error resolution. A notice that is substantially similar to Model Form A--3 as set out in Appendix A of this part concerning error resolution.

(11)  ATM fees. A notice that a fee may be imposed by an automated teller machine operator as defined in § 1005.16(a)(1), when the consumer initiates an electronic fund transfer or makes a balance inquiry, and by any network used to complete the transaction.

(c)  Addition of electronic fund transfer services. If an electronic fund transfer service is added to a consumer's account and is subject to terms and conditions different from those described in the initial disclosures, disclosures for the new service are required.

[Codified to 12 C.F.R. § 1005.7]

§ 1005.8  Change in terms notice; error resolution notice.

(a)  Change in terms notice. (1) Prior notice required. 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:

(i)  Increased fees for the consumer;

(ii)  Increased liability for the consumer;

(iii)  Fewer types of available electronic fund transfers; or

(iv)  Stricter limitations on the frequency or dollar amount of transfers.

(2)  Prior notice exception. A financial institution need not give prior notice if an immediate change in terms or conditions is necessary to maintain or restore the security of an account or an electronic fund transfer system. If the institution makes such a change permanent and disclosure would not jeopardize the security of the account or system, the institution shall notify the consumer in writing on or with the next regularly scheduled periodic statement or within 30 days of making the change permanent.

(b)  Error resolution notice. For accounts to or from which electronic fund transfers can be made, a financial institution shall mail or deliver to the consumer, at least once each calendar year, an error resolution notice substantially similar to the model form set forth in Appendix A of this part (Model Form A--3). Alternatively, an institution may include an abbreviated notice substantially similar to the model form error resolution notice set forth in Appendix A of this part (Model Form A--3), on or with each periodic statement required by § 1005.9(b).

[Codified to 12 C.F.R. § 1005.]

§ 1005.9  Receipts at electronic terminals; periodic statements.

(a)  Receipts at electronic terminals--General. Except as provided in paragraph (e) of this section, a financial institution shall make a receipt available to a consumer at the time the consumer initiates an electronic fund transfer at an electronic terminal. The receipt shall set forth the following information, as applicable:

(1)  Amount. The amount of the transfer. A transaction fee may be included in this amount, provided the amount of the fee is disclosed on the receipt and displayed on or at the terminal.

(2)  Date. The date the consumer initiates the transfer.

(3)  Type. The type of transfer and the type of the consumer's account(s) to or from which funds are transferred. The type of account may be omitted if the access device used is able to access only one account at that terminal.

(4)  Identification. A number or code that identifies the consumer's account or accounts, or the access device used to initiate the transfer. The number or code need not exceed four digits or letters to comply with the requirements of this paragraph (a)(4).

(5)  Terminal location. The location of the terminal where the transfer is initiated, or an identification such as a code or terminal number. Except in limited circumstances where all terminals are located in the same city or state, if the location is disclosed, it shall include the city and state or foreign country and one of the following:

(i)  The street address; or

(ii)  A generally accepted name for the specific location; or

(iii)  The name of the owner or operator of the terminal if other than the account-holding institution.

(6)  Third party transfer. The name of any third party to or from whom funds are transferred.

(b)  Periodic statements. 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; and shall send a periodic statement at least quarterly if no transfer has occurred. The statement shall set forth the following information, as applicable:

(1)  Transaction information. For each electronic fund transfer occurring during the cycle:

(i)  The amount of the transfer;

(ii)  The date the transfer was credited or debited to the consumer's account;

(iii)  The type of transfer and type of account to or from which funds were transferred;

(iv)  For a transfer initiated by the consumer at an electronic terminal (except for a deposit of cash or a check, draft, or similar paper instrument), the terminal location described in paragraph (a)(5) of this section; and

(v)  The name of any third party to or from whom funds were transferred.

(2)  Account number. The number of the account.

(3)  Fees. The amount of any fees assessed against the account during the statement period for electronic fund transfers, the right to make transfers, or account maintenance.

(4)  Account balances. The balance in the account at the beginning and at the close of the statement period.

(5)  Address and telephone number for inquiries. The address and telephone number to be used for inquiries or notice of errors, preceded by "Direct inquiries to" or similar language. The address and telephone number provided on an error resolution notice under § 1005.8(b) given on or with the statement satisfies this requirement.

(6)  Telephone number for preauthorized transfers. A telephone number the consumer may call to ascertain whether preauthorized transfers to the consumer's account have occurred, if the financial institution uses the telephone-notice option under § 1005.10(a)(1)(iii).

(c)  Exceptions to the periodic statement requirement for certain accounts. (1) Preauthorized transfers to accounts. For accounts that may be accessed only by preauthorized transfers to the account the following rules apply:

(i)  Passbook accounts. For passbook accounts, the financial institution need not provide a periodic statement if the institution updates the passbook upon presentation or enters on a separate document the amount and date of each electronic fund transfer since the passbook was last presented.

(ii)  Other accounts. For accounts other than passbook accounts, the financial institution must send a periodic statement at least quarterly.

(2)  Intra-institutional transfers. For an electronic fund transfer initiated by the consumer between two accounts of the consumer in the same institution, documenting the transfer on a periodic statement for one of the two accounts satisfies the periodic statement requirement.

(3)  Relationship between paragraphs (c)(1) and (2) of this section. An account that is accessed by preauthorized transfers to the account described in paragraph (c)(1) of this section and by intra-institutional transfers described in paragraph (c)(2) of this section, but by no other type of electronic fund transfers, qualifies for the exceptions provided by paragraph (c)(1) of this section.

(d)  Documentation for foreign-initiated transfers. The failure by a financial institution to provide a terminal receipt for an electronic fund transfer or to document the transfer on a periodic statement does not violate this part if:

(1)  The transfer is not initiated within a state; and

(2)  The financial institution treats an inquiry for clarification or documentation as a notice of error in accordance with § 1005.11.

(e)  Exception for receipts in small-value transfers. A financial institution is not subject to the requirement to make available a receipt under paragraph (a) of this section if the amount of the transfer is $15 or less.

[Codified to 12 C.F.R. § 1005.9]

§ 1005.10  Preauthorized transfers.

(a)  Preauthorized transfers to consumer's account. (1) Notice by financial institution. When a person initiates preauthorized electronic fund transfers to a consumer's account at least once every 60 days, the account-holding financial institution shall provide notice to the consumer by:

(i)  Positive notice. Providing oral or written notice of the transfer within two business days after the transfer occurs; or

(ii)  Negative notice. Providing oral or written notice, within two business days after the date on which the transfer was scheduled to occur, that the transfer did not occur; or

(iii)  Readily-available telephone line. Providing a readily available telephone line that the consumer may call to determine whether the transfer occurred and disclosing the telephone number on the initial disclosure of account terms and on each periodic statement.

(2)  Notice by payor. A financial institution need not provide notice of a transfer if the payor gives the consumer positive notice that the transfer has been initiated.

(3)  Crediting. A financial institution that receives a preauthorized transfer of the type described in paragraph (a)(1) of this section shall credit the amount of the transfer as of the date the funds for the transfer are received.

(b)  Written authorization for preauthorized transfers from consumer's account. Preauthorized electronic fund transfers from a consumer's account may be authorized only by a writing signed or similarly authenticated by the consumer. The person that obtains the authorization shall provide a copy to the consumer.

(c)  Consumer's right to stop payment. (1) Notice. A consumer may stop payment of a preauthorized electronic fund transfer from the consumer's account by notifying the financial institution orally or in writing at least three business days before the scheduled date of the transfer.

(2)  Written confirmation. The financial institution may require the consumer to give written confirmation of a stop-payment order within 14 days of an oral notification. An institution that requires written confirmation shall inform the consumer of the requirement and provide the address where confirmation must be sent when the consumer gives the oral notification. An oral stop-payment order ceases to be binding after 14 days if the consumer fails to provide the required written confirmation.

(d)  Notice of transfers varying in amount. (1) Notice. When a preauthorized electronic fund transfer from the consumer's account will vary in amount from the previous transfer under the same authorization or from the preauthorized amount, the designated payee or the financial institution shall send the consumer written notice of the amount and date of the transfer at least 10 days before the scheduled date of transfer.

(2)  Range. The designated payee or the institution shall inform the consumer of the right to receive notice of all varying transfers, but may give the consumer the option of receiving notice only when a transfer falls outside a specified range of amounts or only when a transfer differs from the most recent transfer by more than an agreed-upon amount.

(e)  Compulsory use. (1) Credit. No financial institution or other person may condition an extension of credit to a consumer on the consumer's repayment by preauthorized electronic fund transfers, except for credit extended under an overdraft credit plan or extended to maintain a specified minimum balance in the consumer's account.

(2)  Employment or government benefit. No financial institution or other person may require a consumer to establish an account for receipt of electronic fund transfers with a particular institution as a condition of employment or receipt of a government benefit.

[Codified to 12 C.F.R. § 1005.10]

§ 1005.11  Procedures for resolving errors.

(a)  Definition of error. (1) Types of transfers or inquiries covered. The term "error" means:

(i)  An unauthorized electronic fund transfer;

(ii)  An incorrect electronic fund transfer to or from the consumer's account;

(iii)  The omission of an electronic fund transfer from a periodic statement;

(iv)  A computational or bookkeeping error made by the financial institution relating to an electronic fund transfer;

(v)  The consumer's receipt of an incorrect amount of money from an electronic terminal;

(vi)  An electronic fund transfer not identified in accordance with § 1005.9 or § 1005.10(a); or

(vii)  The consumer's request for documentation required by § 1005.9 or § 1005.10(a) or for additional information or clarification concerning an electronic fund transfer, including a request the consumer makes to determine whether an error exists under paragraphs (a)(1)(i) through (vi) of this section.

(2)  Types of inquiries not covered. The term "error" does not include:

(i)  A routine inquiry about the consumer's account balance;

(ii)  A request for information for tax or other recordkeeping purposes; or

(iii)  A request for duplicate copies of documentation.

(b)  Notice of error from consumer. (1) Timing; contents. A financial institution shall comply with the requirements of this section with respect to any oral or written notice of error from the consumer that:

(i)  Is received by the institution no later than 60 days after the institution sends the periodic statement or provides the passbook documentation, required by § 1005.9, on which the alleged error is first reflected;

(ii)  Enables the institution to identify the consumer's name and account number; and

(iii)  Indicates why the consumer believes an error exists and includes to the extent possible the type, date, and amount of the error, except for requests described in paragraph (a)(1)(vii) of this section.

(2)  Written confirmation. A financial institution may require the consumer to give written confirmation of an error within 10 business days of an oral notice. An institution that requires written confirmation shall inform the consumer of the requirement and provide the address where confirmation must be sent when the consumer gives the oral notification.

(3)  Request for documentation or clarifications. When a notice of error is based on documentation or clarification that the consumer requested under paragraph (a)(1)(vii) of this section, the consumer's notice of error is timely if received by the financial institution no later than 60 days after the institution sends the information requested.

(c)  Time limits and extent of investigation. (1) Ten-day period. A financial institution shall investigate promptly and, except as otherwise provided in this paragraph (c), shall determine whether an error occurred within 10 business days of receiving a notice of error. The institution shall report the results to the consumer within three business days after completing its investigation. The institution shall correct the error within one business day after determining that an error occurred.

(2)  Forty-five day period. If the financial institution is unable to complete its investigation within 10 business days, the institution may take up to 45 days from receipt of a notice of error to investigate and determine whether an error occurred, provided the institution does the following:

(i)  Provisionally credits the consumer's account in the amount of the alleged error (including interest where applicable) within 10 business days of receiving the error notice. If the financial institution has a reasonable basis for believing that an unauthorized electronic fund transfer has occurred and the institution has satisfied the requirements of § 1005.6(a), the institution may withhold a maximum of $50 from the amount credited. An institution need not provisionally credit the consumer's account if:

(A)  The institution requires but does not receive written confirmation within 10 business days of an oral notice of error; or

(B)  The alleged error involves an account that is subject to Regulation T of the Board of Governors of the Federal Reserve System (Securities Credit by Brokers and Dealers, 12 CFR part 220);

(ii)  Informs the consumer, within two business days after the provisional crediting, of the amount and date of the provisional crediting and gives the consumer full use of the funds during the investigation;

(iii)  Corrects the error, if any, within one business day after determining that an error occurred; and

(iv)  Reports the results to the consumer within three business days after completing its investigation (including, if applicable, notice that a provisional credit has been made final).

(3)  Extension of time periods. The time periods in paragraphs (c)(1) and (c)(2) of this section are extended as follows:

(i)  The applicable time is 20 business days in place of 10 business days under paragraphs (c)(1) and (2) of this section if the notice of error involves an electronic fund transfer to or from the account within 30 days after the first deposit to the account was made.

(ii)  The applicable time is 90 days in place of 45 days under paragraph (c)(2) of this section, for completing an investigation, if a notice of error involves an electronic fund transfer that:

(A)  Was not initiated within a state;

(B)  Resulted from a point-of-sale debit card transaction; or

(C)  Occurred within 30 days after the first deposit to the account was made.

(4)  Investigation. With the exception of transfers covered by § 1005.14 of this part, a financial institution's review of its own records regarding an alleged error satisfies the requirements of this section if:

(i)  The alleged error concerns a transfer to or from a third party; and

(ii)  There is no agreement between the institution and the third party for the type of electronic fund transfer involved.

(d)  Procedures if financial institution determines no error or different error occurred. In addition to following the procedures specified in paragraph (c) of this section, the financial institution shall follow the procedures set forth in this paragraph (d) if it determines that no error occurred or that an error occurred in a manner or amount different from that described by the consumer:

(1)  Written explanation. The institution's report of the results of its investigation shall include a written explanation of the institution's findings and shall note the consumer's right to request the documents that the institution relied on in making its determination. Upon request, the institution shall promptly provide copies of the documents.

(2)  Debiting provisional credit. Upon debiting a provisionally credited amount, the financial institution shall:

(i)  Notify the consumer of the date and amount of the debiting;

(ii)  Notify the consumer that the institution will honor checks, drafts, or similar instruments payable to third parties and preauthorized transfers from the consumer's account (without charge to the consumer as a result of an overdraft) for five business days after the notification. The institution shall honor items as specified in the notice, but need honor only items that it would have paid if the provisionally credited funds had not been debited.

(e)  Reassertion of error. A financial institution that has fully complied with the error resolution requirements has no further responsibilities under this section should the consumer later reassert the same error, except in the case of an error asserted by the consumer following receipt of information provided under paragraph (a)(1)(vii) of this section.

[Codified to 12 C.F.R. § 1005.11]

§ 1005.12  Relation to other laws.

(a)  Relation to Truth in Lending. (1) The Electronic Fund Transfer Act and this part govern:

(i)  The addition to an accepted credit card, as defined in Regulation Z (12 CFR 1026.12, comment 12-2), of the capability to initiate electronic fund transfers;

(ii)  The issuance of an access device that permits credit extensions (under a preexisting agreement between a consumer and a financial institution) only when the consumer's account is overdrawn or to maintain a specified minimum balance in the consumer's account, or under an overdraft service, as defined in § 1005.17(a) of this part;

(iii)  The addition of an overdraft service, as defined in § 1005.17(a), to an accepted access device; and

(iv)  A consumer's liability for an unauthorized electronic fund transfer and the investigation of errors involving an extension of credit that occurs under an agreement between the consumer and a financial institution to extend credit when the consumer's account is overdrawn or to maintain a specified minimum balance in the consumer's account, or under an overdraft service, as defined in § 1005.17(a).

(2)  The Truth in Lending Act and Regulation Z (12 CFR part 1026), which prohibit the unsolicited issuance of credit cards, govern:

(i)  The addition of a credit feature to an accepted access device; and

(ii)  Except as provided in paragraph (a)(1)(ii) of this section, the issuance of a credit card that is also an access device.

(b)  Preemption of inconsistent state laws. (1) Inconsistent requirements. The Bureau shall determine, upon its own motion or upon the request of a state, financial institution, or other interested party, whether the Act and this part preempt state law relating to electronic fund transfers, or dormancy, inactivity, or service fees, or expiration dates in the case of gift certificates, store gift cards, or general-use prepaid cards.

(2)  Standards for determination. State law is inconsistent with the requirements of the Act and this part if state law:

(i)  Requires or permits a practice or act prohibited by the Federal law;

(ii)  Provides for consumer liability for unauthorized electronic fund transfers that exceeds the limits imposed by the Federal law;

(iii)  Allows longer time periods than the Federal law for investigating and correcting alleged errors, or does not require the financial institution to credit the consumer's account during an error investigation in accordance with § 1005.11(c)(2)(i) of this part; or

(iv)  Requires initial disclosures, periodic statements, or receipts that are different in content from those required by the Federal law except to the extent that the disclosures relate to consumer rights granted by the state law and not by the Federal law.

(c)  State exemptions. (1) General rule. Any state may apply for an exemption from the requirements of the Act or this part for any class of electronic fund transfers within the state. The Bureau shall grant an exemption if it determines that:

(i)  Under state law the class of electronic fund transfers is subject to requirements substantially similar to those imposed by the Federal law; and

(ii)  There is adequate provision for state enforcement.

(2)  Exception. To assure that the Federal and state courts continue to have concurrent jurisdiction, and to aid in implementing the Act:

(i)  No exemption shall extend to the civil liability provisions of section 916 of the Act; and

(ii)  When the Bureau grants an exemption, the state law requirements shall constitute the requirements of the Federal law for purposes of section 916 of the Act, except for state law requirements not imposed by the Federal law.

[Codified to 12 C.F.R. § 1005.12]

§ 1005.13  Administrative enforcement; record retention.

(a)  Enforcement by Federal agencies. Compliance with this part is enforced in accordance with section 918 of the Act.

(b)  Record retention. (1) Any person subject to the Act and this part shall retain evidence of compliance with the requirements imposed by the Act and this part for a period of not less than two years from the date disclosures are required to be made or action is required to be taken.

(2)  Any person subject to the Act and this part having actual notice that it is the subject of an investigation or an enforcement proceeding by its enforcement agency, or having been served with notice of an action filed under sections 910, 916, or 917(a) of the Act, shall retain the records that pertain to the investigation, action, or proceeding until final disposition of the matter unless an earlier time is allowed by court or agency order.

[Codified to 12 C.F.R. § 1005.13]

§ 1005.14  Electronic fund transfer service provider not holding consumer's account.

(a)  Provider of electronic fund transfer service. A person that provides an electronic fund transfer service to a consumer but that does not hold the consumer's account is subject to all requirements of this part if the person:

(1)  Issues a debit card (or other access device) that the consumer can use to access the consumer's account held by a financial institution; and

(2)  Has no agreement with the account-holding institution regarding such access.

(b)  Compliance by service provider. In addition to the requirements generally applicable under this part, the service provider shall comply with the following special rules:

(1)  Disclosures and documentation. The service provider shall give the disclosures and documentation required by §§ 1005.7, 1005.8, and 1005.9 of this part that are within the purview of its relationship with the consumer. The service provider need not furnish the periodic statement required by § 1005.9(b) if the following conditions are met:

(i)  The debit card (or other access device) issued to the consumer bears the service provider's name and an address or telephone number for making inquiries or giving notice of error;

(ii)  The consumer receives a notice concerning use of the debit card that is substantially similar to the notice contained in Appendix A of this part;

(iii)  The consumer receives, on or with the receipts required by § 1005.9(a), the address and telephone number to be used for an inquiry, to give notice of an error, or to report the loss or theft of the debit card;

(iv)  The service provider transmits to the account-holding institution the information specified in § 1005.9(b)(1), in the format prescribed by the automated clearinghouse (ACH) system used to clear the fund transfers;

(v)  The service provider extends the time period for notice of loss or theft of a debit card, set forth in § 1005.6(b)(1) and (2), from two business days to four business days after the consumer learns of the loss or theft; and extends the time periods for reporting unauthorized transfers or errors, set forth in §§ 1005.6(b)(3) and 1005.11(b)(1)(i), from 60 days to 90 days following the transmittal of a periodic statement by the account-holding institution.

(2)  Error resolution. (i) The service provider shall extend by a reasonable time the period in which notice of an error must be received, specified in § 1005.11(b)(1)(i), if a delay resulted from an initial attempt by the consumer to notify the account-holding institution.

(ii)  The service provider shall disclose to the consumer the date on which it initiates a transfer to effect a provisional credit in accordance with § 1005.11(c)(2)(ii).

(iii)  If the service provider determines an error occurred, it shall transfer funds to or from the consumer's account, in the appropriate amount and within the applicable time period, in accordance with § 1005.11(c)(2)(i).

(iv)  If funds were provisionally credited and the service provider determines no error occurred, it may reverse the credit. The service provider shall notify the account-holding institution of the period during which the account-holding institution must honor debits to the account in accordance with § 1005.11(d)(2)(ii). If an overdraft results, the service provider shall promptly reimburse the account-holding institution in the amount of the overdraft.

(c)  Compliance by account-holding institution. The account-holding institution need not comply with the requirements of the Act and this part with respect to electronic fund transfers initiated through the service provider except as follows:

(1)  Documentation. The account-holding institution shall provide a periodic statement that describes each electronic fund transfer initiated by the consumer with the access device issued by the service provider. The account-holding institution has no liability for the failure to comply with this requirement if the service provider did not provide the necessary information; and

(2)  Error resolution. Upon request, the account-holding institution shall provide information or copies of documents needed by the service provider to investigate errors or to furnish copies of documents to the consumer. The account-holding institution shall also honor debits to the account in accordance with § 1005.11(d)(2)(ii).

[Codified to 12 C.F.R. § 1005.14]

§ 1005.15  Electronic fund transfer of government benefits.

(a)  Government agency subject to regulation. (1) A government agency is deemed to be a financial institution for purposes of the Act and this part if directly or indirectly it issues an access device to a consumer for use in initiating an electronic fund transfer of government benefits from an account, other than needs-tested benefits in a program established under state or local law or administered by a state or local agency. The agency shall comply with all applicable requirements of the Act and this part, except as provided in this section.

(2)  For purposes of this section, the term "account" means an account established by a government agency for distributing government benefits to a consumer electronically, such as through automated teller machines or point-of-sale terminals, but does not include an account for distributing needs-tested benefits in a program established under state or local law or administered by a state or local agency.

(b)  Issuance of access devices. For purposes of this section, a consumer is deemed to request an access device when the consumer applies for government benefits that the agency disburses or will disburse by means of an electronic fund transfer. The agency shall verify the identity of the consumer receiving the device by reasonable means before the device is activated.

(c)  Alternative to periodic statement. A government agency need not furnish the periodic statement required by § 1005.9(b) if the agency makes available to the consumer:

(1)  The consumer's account balance, through a readily available telephone line and at a terminal (such as by providing balance information at a balance-inquiry terminal or providing it, routinely or upon request, on a terminal receipt at the time of an electronic fund transfer); and

(2)  A written history of the consumer's account transactions that is provided promptly in response to an oral or written request and that covers at least 60 days preceding the date of a request by the consumer.

(d)  Modified requirements. A government agency that does not furnish periodic statements, in accordance with paragraph (c) of this section, shall comply with the following special rules:

(1)  Initial disclosures. The agency shall modify the disclosures under § 1005.7(b) by disclosing:

(i)  Account balance. The means by which the consumer may obtain information concerning the account balance, including a telephone number. The agency provides a notice substantially similar to the notice contained in paragraph A--5 in appendix A of this part.

(ii)  Written account history. A summary of the consumer's right to receive a written account history upon request, in place of the periodic statement required by § 1005.7(b)(6), and the telephone number to call to request an account history. This disclosure may be made by providing a notice substantially similar to the notice contained in paragraph A--5 in appendix A of this part.

(iii)  Error resolution. A notice concerning error resolution that is substantially similar to the notice contained in paragraph A--5 in appendix A of this part, in place of the notice required by § 1005.7(b)(10).

(2)  Annual error resolution notice. The agency shall provide an annual notice concerning error resolution that is substantially similar to the notice contained in paragraph A--5 in appendix A, in place of the notice required by § 1005.8(b).

(3)  Limitations on liability. For purposes of § 1005.6(b)(3), regarding a 60-day period for reporting any unauthorized transfer that appears on a periodic statement, the 60-day period shall begin with transmittal of a written account history or other account information provided to the consumer under paragraph (c) of this section.

(4)  Error resolution. The agency shall comply with the requirements of § 1005.11 of this part in response to an oral or written notice of an error from the consumer that is received no later than 60 days after the consumer obtains the written account history or other account information, under paragraph (c) of this section, in which the error is first reflected.

[Codified to 12 C.F.R. § 1005.15]

§ 1005.16  Disclosures at automated teller machines.

(a)  Definition. "Automated teller machine operator" means any person that operates an automated teller machine at which a consumer initiates an electronic fund transfer or a balance inquiry and that does not hold the account to or from which the transfer is made, or about which an inquiry is made.

(b)  General. An automated teller machine operator that imposes a fee on a consumer for initiating an electronic fund transfer or a balance inquiry must provide a notice that a fee will be imposed for providing electronic fund transfer services or a balance inquiry that discloses the amount of the fee.

(c)  Notice requirement. An automated teller machine operator must provide the notice required by paragraph (b) of this section either by showing it on the screen of the automated teller machine or by providing it on paper, before the consumer is committed to paying a fee.

(d)  Imposition of fee. An automated teller machine operator may impose a fee on a consumer for initiating an electronic fund transfer or a balance inquiry only if:

(1)  The consumer is provided the notice required under paragraph (c) of this section, and

(2)  The consumer elects to continue the transaction or inquiry after receiving such notice.

[Codified to 12 C.F.R. § 1005.16]

[Section 78 Fed. Reg. 18224, March 26, 2013]

§ 1005.17  Requirements for overdraft services.

(a)  Definition. For purposes of this section, the term "overdraft service" means a service under which a financial institution assesses a fee or charge on a consumer's account held by the institution for paying a transaction (including a check or other item) when the consumer has insufficient or unavailable funds in the account. The term "overdraft service" does not include any payment of overdrafts pursuant to:

(1)  A line of credit subject to Regulation Z (12 CFR part 1026), including transfers from a credit card account, home equity line of credit, or overdraft line of credit;

(2)  A service that transfers funds from another account held individually or jointly by a consumer, such as a savings account; or

(3)  A line of credit or other transaction exempt from Regulation Z (12 CFR part 1026) pursuant to 12 CFR 1026.3(d).

(b)  Opt-in requirement. (1) General. Except as provided under paragraph (c) of this section, a financial institution holding a consumer's account shall not assess a fee or charge on a consumer's account for paying an ATM or one-time debit card transaction pursuant to the institution's overdraft service, unless the institution:

(i)  Provides the consumer with a notice in writing, or if the consumer agrees, electronically, segregated from all other information, describing the institution's overdraft service;

(ii)  Provides a reasonable opportunity for the consumer to affirmatively consent, or opt in, to the service for ATM and one-time debit card transactions;

(iii)  Obtains the consumer's affirmative consent, or opt-in, to the institution's payment of ATM or one-time debit card transactions; and

(iv)  Provides the consumer with confirmation of the consumer's consent in writing, or if the consumer agrees, electronically, which includes a statement informing the consumer of the right to revoke such consent.

(2)  Conditioning payment of other overdrafts on consumer's affirmative consent. A financial institution shall not:

(i)  Condition the payment of any overdrafts for checks, ACH transactions, and other types of transactions on the consumer affirmatively consenting to the institution's payment of ATM and one-time debit card transactions pursuant to the institution's overdraft service; or

(ii)  Decline to pay checks, ACH transactions, and other types of transactions that overdraw the consumer's account because the consumer has not affirmatively consented to the institution's overdraft service for ATM and one-time debit card transactions.

(3)  Same account terms, conditions, and features. A financial institution shall provide to consumers who do not affirmatively consent to the institution's overdraft service for ATM and one-time debit card transactions the same account terms, conditions, and features that it provides to consumers who affirmatively consent, except for the overdraft service for ATM and one-time debit card transactions.

(c)  Timing. (1) Existing account holders. For accounts opened prior to July 1, 2010, the financial institution must not assess any fees or charges on a consumer's account on or after August 15, 2010, for paying an ATM or one-time debit card transaction pursuant to the overdraft service, unless the institution has complied with § 1005.17(b)(1) and obtained the consumer's affirmative consent.

(2)  New account holders. For accounts opened on or after July 1, 2010, the financial institution must comply with § 1005.17(b)(1) and obtain the consumer's affirmative consent before the institution assesses any fee or charge on the consumer's account for paying an ATM or one-time debit card transaction pursuant to the institution's overdraft service.

(d)  Content and format. The notice required by paragraph (b)(1)(i) of this section shall be substantially similar to Model Form A--9 set forth in Appendix A of this part, include all applicable items in this paragraph, and may not contain any information not specified in or otherwise permitted by this paragraph.

(1)  Overdraft service. A brief description of the financial institution's overdraft service and the types of transactions for which a fee or charge for paying an overdraft may be imposed, including ATM and one-time debit card transactions.

(2)  Fees imposed. The dollar amount of any fees or charges assessed by the financial institution for paying an ATM or one-time debit card transaction pursuant to the institution's overdraft service, including any daily or other overdraft fees. If the amount of the fee is determined on the basis of the number of times the consumer has overdrawn the account, the amount of the overdraft, or other factors, the institution must disclose the maximum fee that may be imposed.

(3)  Limits on fees charged. The maximum number of overdraft fees or charges that may be assessed per day, or, if applicable, that there is no limit.

(4)  Disclosure of opt-in right. An explanation of the consumer's right to affirmatively consent to the financial institution's payment of overdrafts for ATM and one-time debit card transactions pursuant to the institution's overdraft service, including the methods by which the consumer may consent to the service; and

(5)  Alternative plans for covering overdrafts. If the institution offers a line of credit subject to Regulation Z (12 CFR part 1026) or a service that transfers funds from another account of the consumer held at the institution to cover overdrafts, the institution must state that fact. An institution may, but is not required to, list additional alternatives for the payment of overdrafts.

(6)  Permitted modifications and additional content. If applicable, the institution may modify the content required by § 1005.17(d) to indicate that the consumer has the right to opt into, or opt out of, the payment of overdrafts under the institution's overdraft service for other types of transactions, such as checks, ACH transactions, or automatic bill payments; to provide a means for the consumer to exercise this choice; and to disclose the associated returned item fee and that additional merchant fees may apply. The institution may also disclose the consumer's right to revoke consent. For notices provided to consumers who have opened accounts prior to July 1, 2010, the financial institution may describe the institution's overdraft service with respect to ATM and one-time debit card transactions with a statement such as "After August 15, 2010, we will not authorize and pay overdrafts for the following types of transactions unless you ask us to (see below)."

(e)  Joint relationships. If two or more consumers jointly hold an account, the financial institution shall treat the affirmative consent of any of the joint consumers as affirmative consent for that account. Similarly, the financial institution shall treat a revocation of affirmative consent by any of the joint consumers as revocation of consent for that account.

(f)  Continuing right to opt in or to revoke the opt-in. A consumer may affirmatively consent to the financial institution's overdraft service at any time in the manner described in the notice required by paragraph (b)(1)(i) of this section. A consumer may also revoke consent at any time in the manner made available to the consumer for providing consent. A financial institution must implement a consumer's revocation of consent as soon as reasonably practicable.

(g)  Duration and revocation of opt-in. A consumer's affirmative consent to the institution's overdraft service is effective until revoked by the consumer, or unless the financial institution terminates the service.

[Codified to 12 C.F.R. § 1005.17]

§ 1005.18  Requirements for financial institutions offering payroll card accounts.

(a)  Coverage. A financial institution shall comply with all applicable requirements of the Act and this part with respect to payroll card accounts except as provided in this section.

(b)  Alternative to periodic statements. (1) A financial institution need not furnish periodic statements required by § 1005.9(b) if the institution makes available to the consumer:

(i)  The consumer's account balance, through a readily available telephone line;

(ii)  An electronic history of the consumer's account transactions, such as through a Web site, that covers at least 60 days preceding the date the consumer electronically accesses the account; and

(iii)  A written history of the consumer's account transactions that is provided promptly in response to an oral or written request and that covers at least 60 days preceding the date the financial institution receives the consumer's request.

(2)  The history of account transactions provided under paragraphs (b)(1)(ii) and (iii) of this section must include the information set forth in § 1005.9(b).

(c)  Modified requirements. A financial institution that provides information under paragraph (b) of this section, shall comply with the following:

(1)  Initial disclosures. The financial institution shall modify the disclosures under § 1005.7(b) by disclosing:

(i)  Account information. A telephone number that the consumer may call to obtain the account balance, the means by which the consumer can obtain an electronic account history, such as the address of a Web site, and a summary of the consumer's right to receive a written account history upon request (in place of the summary of the right to receive a periodic statement required by § 1005.7(b)(6)), including a telephone number to call to request a history. The disclosure required by this paragraph (c)(1)(i) may be made by providing a notice substantially similar to the notice contained in paragraph A--7(a) in appendix A of this part.

(ii)  Error resolution. A notice concerning error resolution that is substantially similar to the notice contained in paragraph A--7(b) in appendix A of this part, in place of the notice required by § 1005.7(b)(10).

(2)  Annual error resolution notice. The financial institution shall provide an annual notice concerning error resolution that is substantially similar to the notice contained in paragraph A--7(b) in appendix A of this part, in place of the notice required by § 1005.8(b). Alternatively, a financial institution may include on or with each electronic and written history provided in accordance with § 1005.18(b)(1), a notice substantially similar to the abbreviated notice for periodic statements contained in paragraph A--3(b) in appendix A of this part, modified as necessary to reflect the error resolution provisions set forth in this section.

(3)  Limitations on liability. (i) For purposes of § 1005.6(b)(3), the 60-day period for reporting any unauthorized transfer shall begin on the earlier of:

(A)  The date the consumer electronically accesses the consumer's account under paragraph (b)(1)(ii) of this section, provided that the electronic history made available to the consumer reflects the transfer; or

(B)  The date the financial institution sends a written history of the consumer's account transactions requested by the consumer under paragraph (b)(1)(iii) of this section in which the unauthorized transfer is first reflected.

(ii)  A financial institution may comply with paragraph (c)(3)(i) of this section by limiting the consumer's liability for an unauthorized transfer as provided under § 1005.6(b)(3) for any transfer reported by the consumer within 120 days after the transfer was credited or debited to the consumer's account.

(4)  Error resolution. (i) The financial institution shall comply with the requirements of § 1005.11 in response to an oral or written notice of an error from the consumer that is received by the earlier of:

(A)  Sixty days after the date the consumer electronically accesses the consumer's account under paragraph (b)(1)(ii) of this section, provided that the electronic history made available to the consumer reflects the alleged error; or

(B)  Sixty days after the date the financial institution sends a written history of the consumer's account transactions requested by the consumer under paragraph (b)(1)(iii) of this section in which the alleged error is first reflected.

(ii)  In lieu of following the procedures in paragraph (c)(4)(i) of this section, a financial institution complies with the requirements for resolving errors in § 1005.11 if it investigates any oral or written notice of an error from the consumer that is received by the institution within 120 days after the transfer allegedly in error was credited or debited to the consumer's account.

[Codified to 12 C.F.R. § 1005.18]

§ 1005.20  Requirements for gift cards and gift certificates.

(a)  Definitions. For purposes of this section, except as excluded under paragraph (b), the following definitions apply:

(1)  "Gift certificate" means a card, code, or other device that is:

(i)  Issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in a specified amount that may not be increased or reloaded in exchange for payment; and

(ii)  Redeemable upon presentation at a single merchant or an affiliated group of merchants for goods or services.

(2)  "Store gift card" means a card, code, or other device that is:

(i)  Issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in a specified amount, whether or not that amount may be increased or reloaded, in exchange for payment; and

(ii)  Redeemable upon presentation at a single merchant or an affiliated group of merchants for goods or services.

(3)  "General-use prepaid card" means a card, code, or other device that is:

(i)  Issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in a specified amount, whether or not that amount may be increased or reloaded, in exchange for payment; and

(ii)  Redeemable upon presentation at multiple, unaffiliated merchants for goods or services, or usable at automated teller machines.

(4)  "Loyalty, award, or promotional gift card" means a card, code, or other device that:

(i)  Is issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in connection with a loyalty, award, or promotional program;

(ii)  Is redeemable upon presentation at one or more merchants for goods or services, or usable at automated teller machines; and

(iii)  Sets forth the following disclosures, as applicable:

(A)  A statement indicating that the card, code, or other device is issued for loyalty, award, or promotional purposes, which must be included on the front of the card, code, or other device;

(B)  The expiration date for the underlying funds, which must be included on the front of the card, code, or other device;

(C)  The amount of any fees that may be imposed in connection with the card, code, or other device, and the conditions under which they may be imposed, which must be provided on or with the card, code, or other device; and

(D)  A toll-free telephone number and, if one is maintained, a Web site, that a consumer may use to obtain fee information, which must be included on the card, code, or other device.

(5)  Dormancy or inactivity fee. The terms "dormancy fee" and "inactivity fee" mean a fee for non-use of or inactivity on a gift certificate, store gift card, or general-use prepaid card.

(6)  Service fee. The term "service fee" means a periodic fee for holding or use of a gift certificate, store gift card, or general-use prepaid card. A periodic fee includes any fee that may be imposed on a gift certificate, store gift card, or general-use prepaid card from time to time for holding or using the certificate or card.

(7)  Activity. The term "activity" means any action that results in an increase or decrease of the funds underlying a certificate or card, other than the imposition of a fee, or an adjustment due to an error or a reversal of a prior transaction.

(b)  Exclusions. The terms "gift certificate," "store gift card," and "general-use prepaid card", as defined in paragraph (a) of this section, do not include any card, code, or other device that is:

(1)  Useable solely for telephone services;

(2)  Reloadable and not marketed or labeled as a gift card or gift certificate. For purposes of this paragraph (b)(2), the term "reloadable" includes a temporary non-reloadable card issued solely in connection with a reloadable card, code, or other device;

(3)  A loyalty, award, or promotional gift card;

(4)  Not marketed to the general public;

(5)  Issued in paper form only; or

(6)  Redeemable solely for admission to events or venues at a particular location or group of affiliated locations, or to obtain goods or services in conjunction with admission to such events or venues, either at the event or venue or at specific locations affiliated with and in geographic proximity to the event or venue.

(c)  Form of disclosures. (1) Clear and conspicuous. Disclosures made under this section must be clear and conspicuous. The disclosures may contain commonly accepted or readily understandable abbreviations or symbols.

(2)  Format. Disclosures made under this section generally must be provided to the consumer in written or electronic form. Except for the disclosures in paragraphs (c)(3) and (h)(2) of this section, written and electronic disclosures made under this section must be in a retainable form. Only disclosures provided under paragraphs (c)(3) and (h)(2) may be given orally.

(3)  Disclosures prior to purchase. Before a gift certificate, store gift card, or general-use prepaid card is purchased, a person that issues or sells such certificate or card must disclose to the consumer the information required by paragraphs (d)(2), (e)(3), and (f)(1) of this section. The fees and terms and conditions of expiration that are required to be disclosed prior to purchase may not be changed after purchase.

(4)  Disclosures on the certificate or card. Disclosures required by paragraphs (a)(4)(iii), (d)(2), (e)(3), and (f)(2) of this section must be made on the certificate or card, or in the case of a loyalty, award, or promotional gift card, on the card, code, or other device. A disclosure made in an accompanying terms and conditions document, on packaging surrounding a certificate or card, or on a sticker or other label affixed to the certificate or card does not constitute a disclosure on the certificate or card. For an electronic certificate or card, disclosures must be provided electronically on the certificate or card provided to the consumer. An issuer that provides a code or confirmation to a consumer orally must provide to the consumer a written or electronic copy of the code or confirmation promptly, and the applicable disclosures must be provided on the written copy of the code or confirmation.

(d)  Prohibition on imposition of fees or charges. No person may impose a dormancy, inactivity, or service fee with respect to a gift certificate, store gift card, or general-use prepaid card, unless:

(1)  There has been no activity with respect to the certificate or card, in the one-year period ending on the date on which the fee is imposed;

(2)  The following are stated, as applicable, clearly and conspicuously on the gift certificate, store gift card, or general-use prepaid card:

(i)  The amount of any dormancy, inactivity, or service fee that may be charged;

(ii)  How often such fee may be assessed; and

(iii)  That such fee may be assessed for inactivity; and

(3)  Not more than one dormancy, inactivity, or service fee is imposed in any given calendar month.

(e)  Prohibition on sale of gift certificates or cards with expiration dates. No person may sell or issue a gift certificate, store gift card, or general-use prepaid card with an expiration date, unless:

(1)  The person has established policies and procedures to provide consumers with a reasonable opportunity to purchase a certificate or card with at least five years remaining until the certificate or card expiration date;

(2)  The expiration date for the underlying funds is at least the later of:

(i)  Five years after the date the gift certificate was initially issued, or the date on which funds were last loaded to a store gift card or general-use prepaid card; or

(ii)  The certificate or card expiration date, if any;

(3)  The following disclosures are provided on the certificate or card, as applicable:

(i)  The expiration date for the underlying funds or, if the underlying funds do not expire, that fact;

(ii)  A toll-free telephone number and, if one is maintained, a Web site that a consumer may use to obtain a replacement certificate or card after the certificate or card expires if the underlying funds may be available; and

(iii)  Except where a non-reloadable certificate or card bears an expiration date that is at least seven years from the date of manufacture, a statement, disclosed with equal prominence and in close proximity to the certificate or card expiration date, that:

(A)  The certificate or card expires, but the underlying funds either do not expire or expire later than the certificate or card, and;

(B)  The consumer may contact the issuer for a replacement card; and

(4)  No fee or charge is imposed on the cardholder for replacing the gift certificate, store gift card, or general-use prepaid card or for providing the certificate or card holder with the remaining balance in some other manner prior to the funds expiration date, unless such certificate or card has been lost or stolen.

(f)  Additional disclosure requirements for gift certificates or cards. The following disclosures must be provided in connection with a gift certificate, store gift card, or general-use prepaid card, as applicable:

(1)  Fee disclosures. For each type of fee that may be imposed in connection with the certificate or card (other than a dormancy, inactivity, or service fee subject to the disclosure requirements under paragraph (d)(2) of this section), the following information must be provided on or with the certificate or card:

(i)  The type of fee;

(ii)  The amount of the fee (or an explanation of how the fee will be determined); and

(iii)  The conditions under which the fee may be imposed.

(2)  Telephone number for fee information. A toll-free telephone number and, if one is maintained, a Web site, that a consumer may use to obtain information about fees described in paragraphs (d)(2) and (f)(1) of this section must be disclosed on the certificate or card.

(g)  Compliance dates. (1) Effective date for gift certificates, store gift cards, and general-use prepaid cards. Except as provided in paragraph (h) of this section, the requirements of this section apply to any gift certificate, store gift card, or general-use prepaid card sold to a consumer on or after August 22, 2010, or provided to a consumer as a replacement for such certificate or card.

(2)  Effective date for loyalty, award, or promotional gift cards. The requirements in paragraph (a)(4)(iii) of this section apply to any card, code, or other device provided to a consumer in connection with a loyalty, award, or promotional program if the period of eligibility for such program began on or after August 22, 2010.

(h)  Temporary exemption. (1) Delayed mandatory compliance date. For any gift certificate, store gift card, or general-use prepaid card produced prior to April 1, 2010, the mandatory compliance date of the requirements of paragraphs (c)(3), (d)(2), (e)(1), (e)(3), and (f) of this section is January 31, 2011, provided that an issuer of such certificate or card:

(i)  Complies with all other provisions of this section;

(ii)  Does not impose an expiration date with respect to the funds underlying such certificate or card;

(iii)  At the consumer's request, replaces such certificate or card if it has funds remaining at no cost to the consumer; and

(iv)  Satisfies the requirements of paragraph (h)(2) of this section.

(2)  Additional disclosures. Issuers relying on the delayed effective date in § 1005.20(h)(1) must disclose through in-store signage, messages during customer service calls, Web sites, and general advertising, that:

(i)  The underlying funds of such certificate or card do not expire;

(ii)  Consumers holding such certificate or card have a right to a free replacement certificate or card, which must be accompanied by the packaging and materials typically associated with such certificate or card; and

(iii)  Any dormancy, inactivity, or service fee for such certificate or card that might otherwise be charged will not be charged if such fees do not comply with section 916 of the Act.

(3)  Expiration of additional disclosure requirements. The disclosures in paragraph (h)(2) of this section:

(i)  Are not required to be provided on or after January 31, 2011, with respect to in-store signage and general advertising.

(ii)  Are not required to be provided on or after January 31, 2013, with respect to messages during customer service calls and Web sites.

[Codified to 12 C.F.R. § 1005.20]

Subpart B—Requirements for Remittance Transfers

§ 1005.30 Remittance transfer definitions.

Except as otherwise provided, for purposes of this subpart, the following definitions apply:

(a)  "Agent" means an agent, authorized delegate, or person affiliated with a remittance transfer provider, as defined under State or other applicable law, when such agent, authorized delegate, or affiliate acts for that remittance transfer provider.

(b)  "Business day" means any day on which the offices of a remittance transfer provider are open to the public for carrying on substantially all business functions.

(c)  "Designated recipient" means any person specified by the sender as the authorized recipient of a remittance transfer to be received at a location in a foreign country.

(d)  "Preauthorized remittance transfer" means a remittance transfer authorized in advance to recur at substantially regular intervals.

(e)  Remittance transfer--(1) General definition. A "remittance transfer" means the electronic transfer of funds requested by a sender to a designated recipient that is sent by a remittance transfer provider. The term applies regardless of whether the sender holds an account with the remittance transfer provider, and regardless of whether the transaction is also an electronic fund transfer, as defined in § 1005.3(b).

(2)  Exclusions from coverage. The term "remittance transfer" does not include:

(i)  Small value transactions. Transfer amounts, as described in § 1005.31(b)(1)(i), of $15 or less.

(ii)  Securities and commodities transfers. Any transfer that is excluded from the definition of electronic fund transfer under § 1005.3(c)(4).

(f)  Remittance transfer provider--(1) General definition. "Remittance transfer provider" or "provider" means any person that provides remittance transfers for a consumer in the normal course of its business, regardless of whether the consumer holds an account with such person.

(2)  Normal course of business--(i) Safe harbor. For purposes of paragraph (f)(1) of this section, a person is deemed not to be providing remittance transfers for a consumer in the normal course of its business if the person:

(A)  Provided 100 or fewer remittance transfers in the previous calendar year; and

(B)  Provides 100 or fewer remittance transfers in the current calendar year.

(ii)  Transition period. If a person that provided 100 or fewer remittance transfers in the previous calendar year provides more than 100 remittance transfers in the current calendar year, and if that person is then providing remittance transfers for a consumer in the normal course of its business pursuant to paragraph (f)(1) of this section, the person has a reasonable period of time, not to exceed six months, to begin complying with this subpart. Compliance with this subpart will not be required for any remittance transfers for which payment is made during that reasonable period of time.

(g)  "Sender" means a consumer in a State who primarily for personal, family, or household purposes requests a remittance transfer provider to send a remittance transfer to a designated recipient.

(h)  Third-party fees. (1) "Covered third-party fees." The term "covered third-party fees" means any fees imposed on the remittance transfer by a person other than the remittance transfer provider except for fees described in paragraph (h)(2) of this section.

(2)  "Non-covered third-party fees." The term "non-covered third-party fees" means any fees imposed by the designated recipient's institution for receiving a remittance transfer into an account except if the institution acts as an agent of the remittance transfer provider.

[Codified to 12 C.F.R. § 1005.30]

[Section 1005.30 added at 77 Fed. Reg. 6285, February 7, 2012; amended at 77 Fed. Reg. 50282, August 20, 2012, effective February 7, 2013, The effective date of the Final Rules published February 7, 2012 (77 FR 6285) and August 20, 2012 (77 FR 50282) is delayed. The Bureau will publish a document in the Federal Register announcing the new effective date; 78 Fed. Reg. 30703, May 22, 2013, effective October 28, 2013, effective date of the rules published February 7, 2012 (77 Fed. Reg. 6194), July 10, 2012 (77 Fed. Reg. 40459), and August 20, 2012 (77 Fed. Reg. 50244), which were delayed on January 29, 2013 (78 Fed. Reg. 6025), is October 28, 2013.]

§ 1005.31  Disclosures.

(a)  General form of disclosures--(1) Clear and conspicuous. Disclosures required by this subpart or permitted by paragraph (b)(1)(viii) of this section or § 1005.33(h)(3) must be clear and conspicuous. Disclosures required by this subpart or permitted by paragraph (b)(1)(viii) of this section or § 1005.33(h)(3) may contain commonly accepted or readily understandable abbreviations or symbols.

(2)  Written and electronic disclosures. Disclosures required by this subpart generally must be provided to the sender in writing. Disclosures required by paragraph (b)(1) of this section may be provided electronically, if the sender electronically requests the remittance transfer provider to send the remittance transfer. Written and electronic disclosures required by this subpart generally must be made in a retainable form. Disclosures provided via mobile application or text message, to the extent permitted by paragraph (a)(5) of this section, need not be retainable.

(3)  Disclosures for oral telephone transactions. The information required by paragraph (b)(1) of this section may be disclosed orally if:

(i)  The transaction is conducted orally and entirely by telephone;

(ii)  The remittance transfer provider complies with the requirements of paragraph (g)(2) of this section;

(iii)  The provider discloses orally a statement about the rights of the sender regarding cancellation required by paragraph (b)(2)(iv) of this section pursuant to the timing requirements in paragraph (e)(1) of this section; and

(iv)  The provider discloses orally, as each is applicable, the information required by paragraph (b)(2)(vii) of this section and the information required by § 1005.36(d)(1)(i)(A), with respect to transfers subject to § 1005.36(d)(2)(ii), pursuant to the timing requirements in paragraph (e)(1) of this section.

(4)  Oral disclosures for certain error resolution notices. The information required by § 1005.33(c)(1) may be disclosed orally if:

(i)  The remittance transfer provider determines that an error occurred as described by the sender; and

(ii)  The remittance transfer provider complies with the requirements of paragraph (g)(2) of this section.

(5)  Disclosures for mobile application or text message transactions. The information required by paragraph (b)(1) of this section may be disclosed orally or via mobile application or text message if:

(i)  The transaction is conducted entirely by telephone via mobile application or text message;

(ii)  The remittance trasfer provider complies with the requirements of paragraph (g)(2) of this section;

(iii)  The provider discloses orally or via mobile application or text message a statement about the rights of the sender regarding cancellation required by paragraph (b)(2)(iv) of this section pursuant to the timing requirements in paragraph (e)(1) of this section; and

(iv)  The provider discloses orally or via mobile application or text message, as each is applicable, the information required by paragraph (b)(2)(vii) of this section and the information required by § 1005.36(d)(1)(i)(A), with respect to transfers subject to § 1005.36(d)(2)(ii), pursuant to the timing requirements in paragraph (e)(1) of this section

(b)  Disclosure requirements--(1) Prepayment disclosure. A remittance transfer provider must disclose to a sender, as applicable:

(i)  The amount that will be transferred to the designated recipient, in the currency in which the remittance transfer is funded, using the term "Transfer Amount" or a substantially similar term;

(ii)  Any fees and any taxes imposed on the remittance transfer by the provider, in the currency in which the remittance transfer is funded, using the terms "Transfer Fees" for fees and "Transfer Taxes" for taxes, or substantially similar terms;

(iii)  The total amount of the transaction, which is the sum of paragraphs (b)(1)(i) and (ii) of this section, in the currency in which the remittance transfer is funded, using the term "Total" or a substantially similar term;

(iv)  The exchange rate used by the provider for the remittance transfer, rounded consistently for each currency to no fewer than two decimal places and no more than four decimal places, using the term "Exchange Rate" or a substantially similar term;

(v)  The amount in paragraph (b)(1)(i) of this section, in the currency in which the funds will be received by the designated recipient, but only if covered third-party fees are imposed under paragraph (b)(1)(vi) of this section, using the term "Transfer Amount" or a substantially similar term. The exchange rate used to calculate this amount is the exchange rate in paragraph (b)(1)(iv) of this section, including an estimated exchange rate to the extent permitted by § 1005.32, prior to any rounding of the exchange rate;

(vi)  Any covered third-party fees, in the currency in which the funds will be received by the designated recipient, using the term "Other Fees," or a substantially similar term. The exchange rate used to calculate any covered thirdparty fees is the exchange rate in paragraph (b)(1)(iv) of this section, including an estimated exchange rate to the extent permitted by § 1005.32, prior to any rounding of the exchange rate;

(vii)  The amount that will be received by the designated recipient, in the currency in which the funds will be received, using the term "Total to Recipient" or a substantially similar term except that this amount shall not include non-covered third party fees or taxes collected on the remittance transfer by a person other than the provider regardless of whether such fees or taxes are disclosed pursuant to paragraph (b)(1)(viii) of this section. The exchange rate used to calculate this amount is the exchange rate in paragraph (b)(1)(iv) of this section, including an estimated exchange rate to the extent permitted by § 1005.32, prior to any rounding of the exchange rate.

(viii)  A statement indicating that noncovered third-party fees or taxes collected on the remittance transfer by a person other than the provider may apply to the remittance transfer and result in the designated recipient receiving less than the amount disclosed pursuant to paragraph (b)(1)(vii) of this section. A provider may only include this statement to the extent that such fees or taxes do or may apply to the transfer, using the language set forth in Model Forms A-30(a) through (c) of Appendix A to this part, as appropriate, or substantially similar language. In this statement, a provider also may, but is not required, to disclose any applicable non-covered third-party fees or taxes collected by a person other than the provider. Any such figure must be disclosed in the currency in which the funds will be received, using the language set forth in Model Forms A--30(b) through (d) of Appendix A to this part, as appropriate, or substantially similar language. The exchange rate used to calculate any disclosed noncovered third-party fees or taxes collected on the remittance transfer by a person other than the provider is the exchange rate in paragraph (b)(1)(iv) of this section, including an estimated exchange rate to the extent permitted by § 1005.32, prior to any rounding of the exchange rate;

(2)  Receipt. A remittance transfer provider must disclose to a sender, as applicable:

(i)  The disclosures described in paragraphs (b)(1)(i) through (viii) of this section;

(ii)  The date in the foreign country on which funds will be available to the designated recipient, using the term "Date Available" or a substantially similar term. A provider may provide a statement that funds may be available to the designated recipient earlier than the date disclosed, using the term "may be available sooner" or a substantially similar term;

(iii)  The name and, if provided by the sender, the telephone number and/or address of the designated recipient, using the term "Recipient" or a substantially similar term;

(iv)  A statement about the rights of the sender regarding the resolution of errors and cancellation, using language set forth in Model Form A--37 of Appendix A to this part or substantially similar language. For any remittance transfer scheduled by the sender at least three business days before the date of the transfer, the statement about the rights of the sender regarding cancellation must instead reflect the requirements of § 1005.36(c); respect to the remittance transfer and the name, toll-free telephone number(s), and Web site of the Consumer Financial Protection Bureau.

(v)  The name, telephone number(s), and Web site of the remittance transfer provider;

(vi)  A statement that the sender can contact the State agency that licenses or charters the remittance transfer provider with respect to the remittance transfer and the Consumer Financial Protection Bureau for questions or complaints about the remittance transfer provider, using language set forth in Model Form A--37 of Appendix A to this part or substantially similar language. The disclosure must provide the name, telephone number(s), and Web site of the State agency that licenses or charters the remittance transfer provider with respect to the remittance transfer and the name, toll-free telephone number(s), and Web site of the Consumer Financial Protection Bureau; and

(vii)  For any remittance transfer scheduled by the sender at least three business days before the date of the transfer, or the first transfer in a series of preauthorized remittance transfers, the date the remittance transfer provider

(3)  Combined disclosure. As an alternative to providing the disclosures described in paragraphs (b)(1) and (2) of this section, a remittance transfer provider may provide the disclosures described in paragraph (b)(2) of this section, as applicable, in a single disclosure pursuant to the timing requirements in paragraph (e)(1) of this section. If the remittance transfer provider provides the combined disclosure and the sender completes the transfer, the remittance transfer provider must provide the sender with proof of payment when payment is made for the remittance transfer. The proof of payment must be clear and conspicuous, provided in writing or electronically, and provided in a retainable form.

(4)  Long form error resolution and cancellation notice. Upon the sender's request, a remittance transfer provider must promptly provide to the sender a notice describing the sender's error resolution and cancellation rights, using language set forth in Model Form A--36 of Appendix A to this part or substantially similar language. For any remittance transfer scheduled by the sender at least three business days before the date of the transfer, the description of the rights of the sender regarding cancellation must instead reflect the requirements of § 1005.36(c).

(c)  Specific format requirements--(1) Grouping. The information required by paragraphs (b)(1)(i), (ii), and (iii) of this section generally must be grouped together. The information required by paragraphs (b)(1)(v), (vi), (vii), and (viii) of this section generally must be grouped together. Disclosures provided via mobile application or text message, to the extent permitted by paragraph (a)(5) of this section, generally need not comply with the grouping requirements of this paragraph, however information required or permitted by paragraph (b)(1)(viii) of this section must be grouped with information required by paragraph (b)(1)(vii) of this section.

(2)  Proximity. The information required by paragraph (b)(1)(iv) of this section generally must be disclosed in close proximity to the other information required by paragraph (b)(1) of this section. The information required by paragraph (b)(2)(iv) of this section generally must be disclosed in close proximity to the other information required by paragraph (b)(2) of this section. The information required or permitted by paragraph (b)(1)(viii) must be in close proximity to the information required by paragraph (b)(1)(vii) of this section. Disclosures provided via mobile application or text message, to the extent permitted by paragraph (a)(5) of this section, generally need not comply with the proximity requirements of this paragraph, however information required or permitted by paragraph (b)(1)(viii) of this section must follow the information required by paragraph (b)(1)(vii) of this section.

(3)  Prominence and size. Written disclosures required by this subpart or permitted by paragraph (b)(1)(viii) of this section must be provided on the front of the page on which the disclosure is printed. Disclosures required by this subpart or permitted by paragraph (b)(1)(viii) of this section that are provided in writing or electronically must be in a minimum eight-point font, except for disclosures provided via mobile application or text message, to the extent permitted by paragraph (a)(5) of this section. Disclosures required by paragraph (b) of this section or permitted by paragraph (b)(1)(viii) of this section that are provided in writing or electronically must be in equal prominence to each other.

(4)  Segregation. Except for disclosures provided via mobile application or text message, to the extent permitted by paragraph (a)(5) of this section, disclosures required by this subpart that are provided in writing or electronically must be segregated from everything else and must contain only information that is directly related to the disclosures required under this subpart.

(d)  Estimates. Estimated disclosures may be provided to the extent permitted by § 1005.32. Estimated disclosures must be described using the term "Estimated" or a substantially similar term in close proximity to the estimated term or terms.

(e)  Timing. (1) Except as provided in § 1005.36(a), a pre-payment disclosure required by paragraph (b)(1) of this section or a combined disclosure required by paragraph (b)(3) of this section must be provided to the sender when the sender requests the remittance transfer, but prior to payment for the transfer.

(2)  Except as provided in § 1005.36(a), a receipt required by paragraph (b)(2) of this section generally must be provided to the sender when payment is made for the remittance transfer. If a transaction is conducted entirely by telephone, a receipt required by paragraph (b)(2) of this section may be mailed or delivered to the sender no later than one business day after the date on which payment is made for the remittance transfer. If a transaction is conducted entirely by telephone and involves the transfer of funds from the sender's account held by the provider, the receipt required by paragraph (b)(2) of this section may be provided on or with the next regularly scheduled periodic statement for that account or within 30 days after payment is made for the remittance transfer if a periodic statement is not provided. The statement about the rights of the sender regarding cancellation required by paragraph (b)(2)(iv) of this section may, but need not, be disclosed pursuant to the timing requirements of this paragraph if a provider discloses this information pursuant to paragraphs (a)(3)(iii) or (a)(5)(iii) of this section.

(f)  Accurate when payment is made. Except as provided in § 1005.36(b), disclosures required by this section or permitted by paragraph (b)(1)(viii) of this section must be accurate when a sender makes payment for the remittance transfer, except to the extent estimates are permitted by § 1005.32.

(g)  Foreign language disclosures--(1) General. Except as provided in paragraph (g)(2) of this section, disclosures required by this subpart or permitted by paragraph (b)(1)(viii) of this section or §  1005.33(h)(3) must be made in English and, if applicable, either in:

(i)  Each of the foreign languages principally used by the remittance transfer provider to advertise, solicit, or market remittance transfer services, either orally, in writing, or electronically, at the office in which a sender conducts a transaction or asserts an error; or

(ii)  The foreign language primarily used by the sender with the remittance transfer provider to conduct the transaction (or for written or electronic disclosures made pursuant to § 1005.33, in the foreign language primarily used by the sender with the remittance transfer provider to assert the error), provided that such foreign language is principally used by the remittance transfer provider to advertise, solicit, or market remittance transfer services, either orally, in writing, or electronically, at the office in which a sender conducts a transaction or asserts an error, respectively.

(2)  Oral, mobile application, or text message disclosures. Disclosures provided orally for transactions conducted orally and entirely by telephone under paragraph (a)(3) of this section or orally or via mobile application or text message for transactions conducted via mobile application or text message under paragraph (a)(5) of this section shall be made in the language primarily used by the sender with the remittance transfer provider to conduct the transaction. Disclosures provided orally under paragraph (a)(4) of this section for error resolution purposes shall be made in the language primarily used by the sender with the remittance transfer provider to assert the error.

[Codified to 12 C.F.R. § 1005.31]

[Section 1005.31 added at 77 Fed. Reg. 6286, February 7, 2012; amended at 77 Fed. Reg. 50282, August 20, 2012 effective February 7, 2013, The effective date of the Final Rules published February 7, 2012 (77 FR 6286) and August 20, 2012 (77 FR 50282) is delayed. The Bureau will publish a document in the Federal Register announcing the new effective date; 78 Fed. Reg. 30703, effective October 28, 2013. The effective date of the rules published February 7, 2012 (77 Fed. Reg. 6194), July 10, 2012 (77 Fed. Reg. 40459), and August 20, 2012 (77 Fed. Reg. 50244), which were delayed on January 29, 2013 (78 Fed. Reg. 6025), is October 28, 2013]

§ 1005.32 Estimates.

(a)  Temporary exception for insured institutions--(1) General. For disclosures described in §§ 1005.31(b)(1) through (3) and 1005.36(a)(1) and (2), estimates may be provided in accordance with paragraph (c) of this section for the amounts required to be disclosed under § 1005.31(b)(1)(iv) through (vii), if:

(i)  A remittance transfer provider cannot determine the exact amounts for reasons beyond its control;

(ii)  A remittance transfer provider is an insured institution; and

(iii)  The remittance transfer is sent from the sender's account with the institution.

(2)  Sunset date. Paragraph (a)(1) of this section expires on July 21, 2015.

(3)  Insured institution. For purposes of this section, the term "insured institution" means insured depository institutions (which includes uninsured U.S. branches and agencies of foreign depository institutions) as defined in section 3 of the Federal Deposit Insurance Act (12 U.S.C. 1813), and insured credit unions as defined in section 101 of the Federal Credit Union Act (12 U.S.C. 1752).

(b)  Permanent exceptions--(1) Permanent exception for transfers to certain countries.

(i)  General. For disclosures described in §§ 1005.31(b)(1) through (b)(3) and 1005.36(a)(1) and (a)(2), estimates may be provided for transfers to certain countries in accordance with paragraph (c) of this section for the amounts required to be disclosed under § 1005.31(b)(1)(iv) through (b)(1)(vii), if a remittance transfer provider cannot determine the exact amounts when the disclosure is required because:

(A)  The laws of the recipient country do not permit such a determination, or

(B)  The method by which transactions are made in the recipient country does not permit such determination.

(ii)  Safe harbor. A remittance transfer provider may rely on the list of countries published by the Bureau to determine whether estimates may be provided under paragraph (b)(1) of this section, unless the provider has information that a country's laws or the method by which transactions are conducted in that country permits a determination of the exact disclosure amount.

(2)  Permanent exception for transfers scheduled before the date of transfer.

(i)  Except as provided in paragraph (b)(2)(ii) of this section, for disclosures described in §§ 1005.36(a)(1)(i) and (a)(2)(i), estimates may be provided in accordance with paragraph (d) of this section for the amounts to be disclosed under §§ 1005.31(b)(1)(iv) through (vii) if the remittance transfer is scheduled by a sender five or more business days before the date of the transfer. In addition, if, at the time the sender schedules such a transfer, the provider agrees to a sender's request to fix the amount to be transferred in the currency in which the remittance transfer will be received and not the currency in which it is funded, estimates may also be provided for the amounts to be disclosed under §§ 1005.31(b)(1)(i) through (iii), except as provided in paragraph (b)(2)(iii) of this section.

(ii)  Covered third-party fees described in § 1005.31(b)(1)(vi) may be estimated under paragraph (b)(2)(i) of this section only if the exchange rate is also estimated under paragraph (b)(2)(i) of this section and the estimated exchange rate affects the amount of such fees.

(iii)  Fees and taxes described in § 1005.31(b)(1)(ii) may be estimated under paragraph (b)(2)(i) of this section only if the amount that will be transferred in the currency in which it is funded is also estimated under paragraph (b)(2)(i) of this section, and the estimated amount affects the amount of such fees and taxes.

(3)  Permanent exception for optional disclosure of non-covered third-party fees and taxes collected by a person other than the provider. For disclosures described in §§ 1005.31(b)(1) through (3) and 1005.36(a)(1) and (2), estimates may be provided for applicable non-covered third-party fees and taxes collected on the remittance transfer by a person other than the provider, which are permitted to be disclosed under § 1005.31(b)(1)(viii), provided such estimates are based on reasonable sources of information.

(c)  Bases for estimates generally. Estimates provided pursuant to the exceptions in paragraph (a) or (b)(1) of this section must be based on the below listed approach or approaches, except as otherwise permitted by this paragraph. If a remittance transfer provider bases an estimate on an approach that is not listed in this paragraph, the provider is deemed to be in compliance with this paragraph so long as the designated recipient receives the same, or greater, amount of funds than the remittance transfer provider disclosed under § 1005.31(b)(1)(vii).

(1)  Exchange rate. In disclosing the exchange rate as required under § 1005.31(b)(1)(iv), an estimate must be based on one of the following:

(i)  For remittance transfers sent via international ACH that qualify for the exception in paragraph (b)(1)(ii) of this section, the most recent exchange rate set by the recipient country's central bank or other governmental authority and reported by a Federal Reserve Bank;

(ii)  The most recent publicly available wholesale exchange rate and, if applicable, any spread that the remittance transfer provider or its correspondent typically applies to such a wholesale rate for remittance transfers for that currency; or

(iii)  The most recent exchange rate offered or used by the person making funds available directly to the designated recipient or by the person setting the exchange rate.

(2)  Transfer amount in the currency in which the funds will be received by the designated recipient. In disclosing the transfer amount in the currency in which the funds will be received by the designated recipient, as required under § 1005.31(b)(1)(v), an estimate must be based on the estimated exchange rate provided in accordance with paragraph (c)(1) of this section, prior to any rounding of the estimated exchange rate.

(3)  Covered third-party fees. (i) Imposed as percentage of amount transferred. In disclosing covered third party fees, as described under § 1005.31(b)(1)(vi), that are a percentage of the amount transferred to the designated recipient, an estimated exchange rate must be based on the estimated exchange rate provided in accordance with paragraph (c)(1) of this section, prior to any rounding of the estimated exchange rate.

(ii)  Imposed by the intermediary or final institution. In disclosing covered third-party fees pursuant to § 1005.31(b)(1)(vi), an estimate must be based on one of the following:

(A)  The remittance transfer provider's most recent remittance transfer to the designated recipient's institution, or

(B)  A representative transmittal route identified by the remittance transfer provider.

(4)  Amount of currency that will be received by the designated recipient. In disclosing the amount of currency that will be received by the designated recipient as required under § 1005.31(b)(1)(vii), an estimate must be based on the information provided in accordance with paragraphs (c)(1) through (3) of this section, as applicable.

(d)  Bases for estimates for transfers scheduled before the date of transfer. Estimates provided pursuant to paragraph (b)(2) of this section must be based on the exchange rate or, where applicable, the estimated exchange rate based on an estimation methodology permitted under paragraph (c) of this section that the provider would have used or did use that day in providing disclosures to a sender requesting such a remittance transfer to be made on the same day. If, in accordance with this paragraph, a remittance transfer provider uses a basis described in paragraph (c) of this section but not listed in paragraph (c)(1) of this section, the provider is deemed to be in compliance with this paragraph regardless of the amount received by the designated recipient, so long as the estimation methodology is the same that the provider would have used or did use in providing disclosures to a sender requesting such a remittance transfer to be made on the same day.

[Codified to 12 C.F.R. § 1005.32]

[Section 1005.32 added at 77 Fed. Reg. 6287, February 7, 2012; amended at 77 Fed. Reg. 50283, August 20, 2012, effective February 7, 2013, The effective date of the Final Rules published February 7, 2012 (77 FR 6287) and August 20, 2012 (77 FR 50283) is delayed. The Bureau will publish a document in the Federal Register announcing the new effective date; 78 Fed. Reg. 30703, effective October 28, 2013. The effective date of the rules published February 7, 2012 (77 Fed. Reg. 6194), July 10, 2012 (77 Fed. Reg. 40459), and August 20, 2012 (77 Fed. Reg. 50244), which were delayed on January 29, 2013 (78 Fed. Reg. 6025), is October 28, 2013.]

§ 1005.33 Procedures for resolving errors.

(a)  Definition of error. (1) Types of transfers or inquiries covered. For purposes of this section, the term error means:

(i)  An incorrect amount paid by a sender in connection with a remittance transfer unless the disclosure stated an estimate of the amount paid by a sender in accordance with § 1005.32(b)(2) and the difference results from application of the actual exchange rate, fees, and taxes, rather than any estimated amount;

(ii)  A computational or bookkeeping error made by the remittance transfer provider relating to a remittance transfer;

(iii)  The failure to make available to a designated recipient the amount of currency disclosed pursuant to § 1005.31(b)(1)(vii) and stated in the disclosure provided to the sender under § 1005.31(b)(2) or (3) for the remittance transfer, unless:

(A)  The disclosure stated an estimate of the amount to be received in accordance with § 1005.32(a), (b)(1) or (b)(2) and the difference results from application of the actual exchange rate, fees, and taxes, rather than any estimated amounts; or

(B)  The failure resulted from extraordinary circumstances outside the remittance transfer provider's control that could not have been reasonably anticipated; or

(C)  The difference results from the application of non-covered third-party fees or taxes collected on the remittance transfer by a person other than the provider and the provider provided the disclosure required by § 1005.31(b)(1)(viii).

(iv)  The failure to make funds available to a designated recipient by the date of availability stated in the disclosure provided to the sender under § 1005.31(b)(2) or (3) for the remittance transfer, unless the failure to make the funds available resulted from:

(A)  Extraordinary circumstances outside the remittance transfer provider's control that could not have been reasonably anticipated;

(B)  Delays related to the remittance transfer provider's fraud screening procedures or in accordance with the Bank Secrecy Act, 31 U.S.C. 5311 et seq., Office of Foreign Assets Control requirements, or similar laws or requirements;

(C)  The remittance transfer being made with fraudulent intent by the sender or any person acting in concert with the sender; or

(D)  The sender having provided the remittance transfer provider an incorrect account number or recipient institution identifier for the designated recipient's account or institution, provided that the remittance transfer provider meets the conditions set forth in paragraph (h) of this section;

(v)  The sender's request for documentation required by § 1005.31 or for additional information or clarification concerning a remittance transfer, including a request a sender makes to determine whether an error exists under paragraphs (a)(1)(i) through (iv) of this section.

(2)  Types of transfers or inquiries not covered. The term error does not include:

(i)  An inquiry about the status of a remittance transfer, except where the funds from the transfer were not made available to a designated recipient by the disclosed date of availability as described in paragraph (a)(1)(iv) of this section;

(ii)  A request for information for tax or other recordkeeping purposes;

(iii)  A change requested by the designated recipient; or

(iv)  A change in the amount or type of currency received by the designated recipient from the amount or type of currency stated in the disclosure provided to the sender under § 1005.31(b)(2) or (3) if the remittance transfer provider relied on information provided by the sender as permitted under § 1005.31 in making such disclosure.

(b)  Notice of error from sender. (1) Timing; contents. A remittance transfer provider shall comply with the requirements of this section with respect to any oral or written notice of error from a sender that:

(i)  Is received by the remittance transfer provider no later than 180 days after the disclosed date of availability of the remittance transfer;

(ii)  Enables the provider to identify:

(A)  The sender's name and telephone number or address;

(B)  The recipient's name, and if known, the telephone number or address of the recipient; and

(C)  The remittance transfer to which the notice of error applies; and

(iii)  Indicates why the sender believes an error exists and includes to the extent possible the type, date, and amount of the error, except for requests for documentation, additional information, or clarification described in paragraph (a)(1)(v) of this section.

(2)  Request for documentation or clarification. When a notice of error is based on documentation, additional information, or clarification that the sender previously requested under paragraph (a)(1)(v) of this section, the sender's notice of error is timely if received by the remittance transfer provider the later of 180 days after the disclosed date of availability of the remittance transfer or 60 days after the provider sent the documentation, information, or clarification that had been requested.

(c)  Time limits and extent of investigation. (1) Time limits for investigation and report to consumer of error. A remittance transfer provider shall investigate promptly and determine whether an error occurred within 90 days of receiving a notice of error. The remittance transfer provider shall report the results to the sender, including notice of any remedies available for correcting any error that the provider determines has occurred, within three business days after completing its investigation.

(2)  Remedies. Except as provided in paragraph (c)(2)(iii) of this section, if, following an assertion of an error by a sender, the remittance transfer provider determines an error occurred, the provider shall, within one business day of, or as soon as reasonably practicable after, receiving the sender's instructions regarding the appropriate remedy, correct the error as designated by the sender by:

(i)  In the case of any error under paragraphs (a)(1)(i) through (iii) of this section, as applicable, either:

(A)  Refunding to the sender the amount of funds provided by the sender in connection with a remittance transfer which was not properly transmitted, or the amount appropriate to resolve the error; or

(B)  Making available to the designated recipient, without additional cost to the sender or to the designated recipient, the amount appropriate to resolve the error;

(ii)  Except as provided in paragraph (C)(2)(iii) of this section, in the case of an error under paragraph (a)(i)(iv) of this section:

(A)  As applicable, either:

(1)  Refunding to the sender the amount of funds provided by the sender in connection with a remittance transfer which was not properly transmitted, or the amount appropriate to resolve the error; or

(2)  Making available to the designated recipient the amount appropriate to resolve the error. Such amount must be made available to the designated recipient without additional cost to the sender or to the designated recipient; and

(B)  Refunding to the sender any fees imposed and, to the extent not prohibited by law, taxes collected on the remittance transfer;

(iii)  In the case of an error under paragraph (a)(1)(iv) of this section that occurred because the sender provided incorrect or insufficient information in connection with the remittance transfer, the remittance transfer provider shall provide the remedies required by paragraphs (c)(2)(ii)(A)(1) and (B) within three business days of providing the report required by paragraph (c)(1) or (d)(1) of this section except that the provider may agree to the sender's request, upon receiving the results of the error investigation, that the funds be applied towards a new remittance transfer, rather than be refunded, if the provider has not yet processed a refund. The provider may deduct from the amount refunded or applied towards a new transfer any fees actually imposed on or, to the extent not prohibited by law, taxes actually collected on the remittance transfer as part of the first unsuccessful remittance transfer attempt.

(iv)  In the case of a request under paragraph (a)(1)(v) of this section, providing the requested documentation, information, or clarification.

(d)  Procedures if remittance transfer provider determines no error or different error occurred. In addition to following the procedures specified in paragraph (c) of this section, the remittance transfer provider shall follow the procedures set forth in this paragraph (d) if it determines that no error occurred or that an error occurred in a manner or amount different from that described by the sender.

(1)  Explanation of results of investigation. The remittance transfer provider's report of the results of the investigation shall include a written explanation of the provider's findings and shall note the sender's right to request the documents on which the provider relied in making its determination. The explanation shall also address the specific complaint of the sender.

(2)  Copies of documentation. Upon the sender's request, the remittance transfer provider shall promptly provide copies of the documents on which the provider relied in making its error determination.

(e)  Reassertion of error. A remittance transfer provider that has fully complied with the error resolution requirements of this section has no further responsibilities under this section should the sender later reassert the same error, except in the case of an error asserted by the sender following receipt of information provided under paragraph (a)(1)(v) of this section.

(f)  Relation to other laws--(1) Relation to Regulation E § 1005.11 for incorrect EFTs from a sender's account. If an alleged error involves an incorrect electronic fund transfer from a sender's account in connection with a remittance transfer, and the sender provides a notice of error to the account-holding institution, the account-holding institution shall comply with the requirements of § 1005.11 governing error resolution rather than the requirements of this section, provided that the account-holding institution is not also the remittance transfer provider. If the remittance transfer provider is also the financial institution that holds the consumer's account, then the error-resolution provisions of this section apply when the sender provides such notice of error.

(2)  Relation to Truth in Lending Act and Regulation Z. If an alleged error involves an incorrect extension of credit in connection with a remittance transfer, an incorrect amount received by the designated recipient under paragraph (a)(1)(iii) of this section that is an extension of credit for property or services not delivered as agreed, or the failure tomake funds available by the disclosed date of availability under paragraph (a)(1)(iv) of this section that is an extension of credit for property or services not delivered as agreed, andthe sender provides a notice of error to the creditor extending the credit, the provisions of Regulation Z, 12 CFR 1026.13, governing error resolution apply to the creditor, rather than the requirements of this section, even if the creditor is the remittance transfer provider. However, if the creditor is the remittance transfer provider, paragraph (b) of this section will apply instead of 12 CFR 1026.13(b). If the sender instead provides a notice of error to the remittance transfer provider that is not also the creditor, then the error resolution provisions of this section apply to the remittance transfer provider.

(3)  Unauthorized remittance transfers. If an alleged error involves an unauthorized electronic fund transfer for payment in connection with a remittance transfer, §§ 1005.6 and 1005.11 apply with respect to the account-holding institution. If an alleged error involves an unauthorized use of a credit account for payment in connection with a remittance transfer, the provisions of Regulation Z, 12 CFR 1026.12(b), if applicable, and § 1026.13, apply with respect to the creditor.

(g)  Error resolution standards and recordkeeping requirements--(1) Compliance program. A remittance transfer provider shall develop and maintain written policies and procedures that are designed to ensure compliance with the error resolution requirements applicable to remittance transfers under this section.

(2)  Retention of error-related documentation. The remittance transfer provider's policies and procedures required under paragraph (g)(1) of this section shall include policies and procedures regarding the retention of documentation related to error investigations. Such policies and procedures must ensure, at a minimum, the retention of any notices of error submitted by a sender, documentation provided by the sender to the provider with respect to the alleged error, and the findings of the remittance transfer provider regarding the investigation of the alleged error. Remittance transfer providers are subject to the record retention requirements under § 1005.13.

(h)  Incorrect account number or recipient institution identifier provided by the sender. The exception in paragraph (a)(1)(iv)(D) of this section applies if:

(1)  The remittance transfer provider can demonstrate that the sender provided an incorrect account number or recipient institution identifier to the provider in connection with the remittance transfer;

(2)  For any instance in which the sender provided the incorrect recipient institution identifier, prior to or when sending the transfer, the provider used reasonably available means to verify that the recipient institution identifier provided by the sender corresponded to the recipient institution name provided by the sender;

(3)  The provider provided notice to the sender before the sender made payment for the remittance transfer that, in the event the sender provided an incorrect account number or recipient institution identifier, the sender could lose the transfer amount. For purposes of providing this disclosure, § 1005.31(a)(2) applies to this notice unless the notice is given at the same time as other disclosures required by this subpart for which information is permitted to be disclosed orally or via mobile application or text message, in which case this disclosure may be given in the same medium as those other disclosures;

(4)  The incorrect account number or recipient institution identifier resulted in the deposit of the remittance transfer into a customer's account that is not the designated recipient's account; and

(5)  The provider promptly used reasonable efforts to recover the amount that was to be received by the designated recipient.

[Codified to 12 C.F.R. § 1005.33]

[Section 1005.33 added at 77 Fed. Reg. 6288, February 7, 2012; amended at 77 Fed. Reg. 50284, August 20, 2012, effective February 7, 2013, The effective date of the Final Rules published February 7, 2012 (77 FR 6194) and August 20, 2012 (77 FR 50244) is delayed. The Bureau will publish a document in the Federal Register announcing the new effective date; 78 Fed. Reg. 30704, May 22, 2013, effective October 28, 2013. The effective date of rules published February 7, 2012 (77 Fed. Reg. 6194), July 10, 2012 (77 Fed. Reg. 40459), and August 20, 2012 (77 Fed. Reg. 50244), which were delayed on January 29, 2013 (78 Fed. Reg. 6025), is October 28, 2013; 78 Fed. Reg. 49366, August 14, 2013, effective October 28, 2013.]

§ 1005.34  Procedures for cancellation and refund of remittance transfers.

(a)  Sender right of cancellation and refund. Except as provided in § 1005.36(c), a remittance transfer provider shall comply with the requirements of this section with respect to any oral or written request to cancel a remittance transfer from the sender that is received by the provider no later than 30 minutes after the sender makes payment in connection with the remittance transfer if:

(1)  The request to cancel enables the provider to identify the sender's name and address or telephone number and the particular transfer to be cancelled; and

(2)  The transferred funds have not been picked up by the designated recipient or deposited into an account of the designated recipient.

(b)  Time limits and refund requirements. A remittance transfer provider shall refund, at no additional cost to the sender, the total amount of funds provided by the sender in connection with a remittance transfer, including any fees and, to the extent not prohibited by law, taxes imposed in connection with the remittance transfer, within three business days of receiving a sender's request to cancel the remittance transfer.

[Codified to 12 C.F.R. § 1005.34]

[Section 1005.34 added at 77 Fed. Reg. 6290, February 7, 2012, The effective date of the Final Rules published February 7, 2012 (77 FR 6290) is delayed. The Bureau will publish a document in the Federal Register announcing the new effective date.]

§ 1005.35  Acts of agents.

A remittance transfer provider is liable for any violation of this subpart by an agent when such agent acts for the provider.

[Codified to 12 C.F.R. § 1005.35]

[Section 1005.35 added at 77 Fed. Reg. 6290, February 7, 2012, The effective date of the Final Rules published February 7, 2012 (77 FR 6290) is delayed. The Bureau will publish a document in the Federal Register announcing the new effective date.]

§ 1005.36  Transfers scheduled before the date of transfer.

(a)  Timing. (1) For a one-time transfer scheduled five or more business days before the date of transfer or for the first in a series of preauthorized remittance transfers, the remittance transfer provider must:

(i)  Provide either the pre-payment disclosure described in § 1005.31(b)(1) and the receipt described in § 1005.31(b)(2) or the combined disclosure described in § 1005.31(b)(3), in accordance with the timing requirements set forth in § 1005.31(e); and

(ii)  If any of the disclosures provided pursuant to paragraph (a)(1)(i) of this section contain estimates as permitted by § 1005.32(b)(2), mail or deliver to the sender an additional receipt meeting the requirements described in § 1005.31(b)(2) no later than one business day after the date of the transfer. If the transfer involves the transfer of funds from the sender's account held by the provider, the receipt required by this paragraph may be provided on or with the next periodic statement for that account, or within 30 days after the date of the transfer if a periodic statement is not provided.

(2)  For each subsequent preauthorized remittance transfer:

(i)  If any of the information on the most recent receipt provided pursuant to paragraph (a)(1)(i) of this section, or by this paragraph (a)(2)(i), other than the temporal disclosures required by § 1005.31(b)(2)(ii) and (b)(2)(vii), is no longer accurate with respect to a subsequent preauthorized remittance transfer for reasons other than as permitted by § 1005.32, then the remittance transfer provider must provide an updated receipt meeting the requirements described in § 1005.31(b)(2) to the sender. The provider must mail or deliver this receipt to the sender within a reasonable time prior to the scheduled date of the next subsequent preauthorized remittance transfer. Such receipt must clearly and conspicuously indicate that it contains updated disclosures.

(ii)  Unless a receipt was provided in accordance with paragraph (a)(2)(i) of this section that contained no estimates pursuant to § 1005.32, the remittance transfer provider must mail or deliver to the sender a receipt meeting the requirements described in § 1005.31(b)(2) no later than one business day after the date of the transfer. If the remittance transfer involves the transfer of funds from the sender's account held by the provider, the receipt required by this paragraph may be provided on or with the next periodic statement for that account, or within 30 days after the date of the transfer if a periodic statement is not provided.

(iii)  A remittance transfer provider must provide the disclosures required by paragraph (d) of this section in accordance with the timing requirements of that section.

(b)  Accuracy. (1) For a one-time transfer scheduled five or more business days in advance or for the first in a series of preauthorized remittance transfers, disclosures provided pursuant to paragraph (a)(1)(i) of this section must comply with § 1005.31(f) by being accurate when a sender makes payment except to the extent estimates are permitted by § 1005.32.

(2)  For each subsequent preauthorized remittance transfer, the most recent receipt provided pursuant to paragraph (a)(1)(i) or (a)(2)(i) of this section must be accurate as of when such transfer is made, except:

(i)  The temporal elements required by § 1005.31(b)(2)(ii) and (b)(2)(vii) must be accurate only if the transfer is the first transfer to occur after the disclosure was provided; and

(ii)  To the extent estimates are permitted by § 1005.32.

(3)  Disclosures provided pursuant to paragraph (a)(1)(ii) or (a)(2)(ii) of this section must be accurate as of when the remittance transfer to which it pertains is made, except to the extent estimates are permitted by § 1005.32(a) or (b)(1).

(c)  Cancellation. For any remittance transfer scheduled by the sender at least three business days before the date of the transfer, a remittance transfer provider shall comply with any oral or written request to cancel the remittance transfer from the sender if the request to cancel:

(1)  Enables the provider to identify the sender's name and address or telephone number and the particular transfer to be cancelled; and

(2)  Is received by the provider at least three business days before the scheduled date of the remittance transfer.

(d)  Additional requirements for subsequent preauthorized remittance transfers--(1) Disclosure requirement.

(i)  For any subsequent transfer in a series of preauthorized remittance transfers, the remittance transfer provider must disclose to the sender:

(A)  The date the provider will make the subsequent transfer, using the term "Future Transfer Date," or a substantially similar term;

(B)  A statement about the rights of the sender regarding cancellation as described in § 1005.31(b)(2)(iv); and

(C)  The name, telephone number(s), and Web site of the remittance transfer provider.

(ii)  If the future date or dates of transfer are described as occurring in regular periodic intervals, e.g., the 15th of every month, rather than as a specific calendar date or dates, the remittance transfer provider must disclose any future date or dates of transfer that do not conform to the described interval.

(2)  Notice requirements. (i) Except as described in paragraph (d)(2)(ii) of this section, the disclosures required by paragraph (d)(1) of this section must be received by the sender no more than 12 months, and no less than five business days prior to the date of any subsequent transfer to which it pertains. The disclosures required by paragraph (d)(1) of this section may be provided in a separate disclosure or may be provided on one or more disclosures required by this subpart related to the same series of preauthorized transfers, so long as the consumer receives the required information for each subsequent preauthorized remittance transfer in accordance with the timing requirements of this paragraph (d)(2)(i). (ii) For any subsequent preauthorized remittance transfer for which the date of transfer is four or fewer business days after the date payment is made for that transfer, the information required by paragraph (d)(1) of this section must be provided on or with the receipt described in § 1005.31(b)(2), or disclosed as permitted by § 1005.31(a)(3) or (a)(5), for the initial transfer in that series in accordance with paragraph (a)(1)(i) of this section.

(3)  Specific format requirement. The information required by paragraph (d)(1)(i)(A) of this section generally must be disclosed in close proximity to the other information required by paragraph (d)(1)(i)(B) of this section.

(4)  Accuracy. Any disclosure required by paragraph (d)(1) of this section must be accurate as of the date the preauthorized remittance transfer to which it pertains is made.

[Codified to 12 C.F.R. § 1005.36]

[Section 1005.36 added at 77 Fed. Reg. 6290, February 7, 2012; amended at 77 Fed. Reg. 50284, August 20, 2012, effective February 7, 2013, The effective date of the Final Rules published February 7, 2012 (77 FR 6290) and August 20, 2012 (77 FR 50284) is delayed. The Bureau will publish a document in the Federal Register announcing the new effective date.]


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