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All in Regulation E
In this Compliance Clip (video), Adam discusses whether or not electronic fund transfers (EFTs) that were initiated through fraud or robbery are considered unauthorized EFTs under Regulation E. Adam also cites examples of unauthorized EFTs, based from the CFPB’s FAQs on unauthorized electronic fund transfers. A transcript of this video is now available.
On October 4, 2022, the CFPB took action against Choice Money Transfer (Choice Money) for multiple violations of the Remittance Transfer Rule and the Electronic Fund Transfer Act (EFTA), such as failing to accurately disclose important prepayment information to remittance senders. Choice Money is a nonbank remittance provider incorporated in New York and headquartered in New Jersey. It currently handles approximately 500,000 transfers a month.
In this Compliance Clip (video), Adam discusses what an error is for purposes of Electronic Fund Transfer Act, for Regulation E and for dispute purposes. In just under 8 minutes, this video takes a pretty deep dive into a core element of Regulation E disputes. This would be a great video to pass on to anyone needing to understand an “error” under Regulation E. A transcript of this video is now available.
In this Compliance Clip (video), Adam explains the answer to the questions on whether or not certain situations are in fact an unauthorized electronic fund transfer and whether or not a dispute has to be processed under regulation E. To provide the answer, he dives into the regulation, commentary, and additional guidance from the CFPB. This video is a must watch for anyone in your organization who processes Reg E disputes.
On 12/13/21, the CFPB updated its list of frequently asked questions on Electronic Fund Transfers provisions of Regulation E. Previously, the Reg E FAQs included only 8 questions and answers in a single category. Now, the FAQs include four categories and a total of 24 FAQs.
On 6/4/2021, the Consumer Financial Protection Bureau (CFPB) issued a set of frequently asked questions (FAQs) under the topic of “Unauthorized Electronic Fund Transfers, Subpart A to Regulation E.” This FAQs provide guidance on several areas financial institutions have struggled with over the years, including topics like determining how to handle instances where consumer share account access information with third parties who fraudulently obtain the information, consumer negligence, private network rules, and requiring police reports. These FAQs appear to be the first of several topics, so compliance professionals should stay tuned over the next few years to see if more Reg E FAQs are released by the CFPB.
In this 8+ minute Compliance Clip (video), Adam discusses a Regulation E pitfall identified in a recent enforcement action. Specifically, Adam shows how a financial institutions could think they are complying with the affirmative consent provisions for overdraft protection programs under Regulation E, but miss the mark due to logistics of the account opening process. This topic comes right out of our Fall 2020 Quarterly Compliance Update, which can be found in our store at https://www.compliancecohort.com/fall-2020-quarterly-compliance-update.
The CFPB has recently updated its Small Entity Compliance Guide on Remittance Transfers to correspond with the May 11, 2020 changes to the rule. The main changes to this guide include the following:
On May 11, 2020, the CFPB issued a final rule covering remittances transfers, which imposes requirements on entities that send international money transfers (i.e. remittance transfers) on behalf of consumers. Among its requirements, the Remittance Rule mandates that remittance transfer providers generally must disclose the exact exchange rate, the amount of certain fees, and the amount expected to be delivered to the recipient. The existing Remittance Rule also allows for depository institutions to estimate certain fees and exchange rate information under certain circumstances, but by statute, this provision expires in July 2020.
The new final rule allows certain banks and credit unions to continue to provide estimates of the exchange rate and certain fees under certain conditions. This could preserve consumers’ ability to send remittances from their bank accounts to certain countries or recipient institutions. In addition, the new final rule also increases the threshold that determines whether an entity makes remittance transfers in the normal course of its business and is subject to the Rule. Specifically, entities making 500 or fewer transfers annually in the current and prior calendar years would not be subject to the Rule. In their issuance, the CFPB states that this will reduce the burden on over 400 banks and almost 250 credit unions that send a relatively small number of remittances.
In this Compliance Clip (video), Adam discusses how Reg E liability and the dispute process works for older transactions. You know, when a customer comes to you two years after-the-fact and says they now want to dispute a purchase they don’t remember doing. This video explains the responsibilities under Regulation E as far as what needs done for this type of dispute.
