12 CFR Part 205 — Electronic Fund Transfers (Regulation E)

PART 205—ELECTRONIC FUND TRANSFERS (REGULATION E) Authority: 15 U.S.C. 1693b. Source: Reg. E, 61 FR 19669, May 2, 1996, unless otherwise noted. § 205.1 Authority and purpose. (a) Authority. et seq. et seq. (b) Purpose. § 205.2 Definitions. For purposes of this part, the following definitions apply: (a)(1) Access device (2) An access device becomes an accepted access device (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 (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 § 205.18. (3) The term does not include an account held by a financial institution under a bona fide trust agreement. (c) Act et seq. (d) Business day (e) Consumer (f) Credit (g) Electronic fund transfer (h) Electronic terminal (i) Financial institution (j) Person (k) Preauthorized electronic fund transfer (l) State (m) Unauthorized electronic fund transfer (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. [Reg. E, 61 FR 19669, May 2, 1996, as amended at 71 FR 1481, Jan. 10, 2006; 71 FR 51449, Aug. 30, 2006] § 205.3 Coverage. (a) General. (b) Electronic fund transfer Definition. (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. (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 EFT, 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) The person that initiates an electronic fund transfer using the consumer's check as a source of information for the transfer shall also provide a notice to the consumer at the same time it provides the notice required under paragraph (b)(2)(ii) that when a check is used to initiate an electronic fund transfer, funds may be debited from the consumer's account as soon as the same day payment is received, and, as applicable, that the consumer's check will not be returned by the financial institution holding the consumer's account. For point-of-sale transfers, the person initiating the transfer may post the notice required in this paragraph (b)(2)(iii) in a prominent and conspicuous location and need not include this notice on the copy of the notice given to the consumer under paragraph (b)(2)(ii). The requirements in this paragraph (b)(2)(iii) shall remain in effect until December 31, 2009. (iv) 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 General. (ii) Point-of-sale transactions. (iii) Delayed compliance date for fee disclosure. (c) Exclusions from coverage. (1) Checks. (2) Check guarantee or authorization. (3) Wire or other similar transfers. (4) Securities and commodities transfers. (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. (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 § 205.10(e) regarding compulsory use and sections 915 and 916 of the act regarding civil and criminal liability. (6) Telephone-initiated transfers. (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. [Reg. E, 61 FR 19669, May 2, 1996, as amended at 71 FR 1659, Jan. 10, 2006; 71 FR 51456, Aug. 30, 2006; 75 FR 16613, Apr. 1, 2010] § 205.4 General disclosure requirements; jointly offered services. (a)(1) Form of disclosures. et seq. (2) Foreign language disclosures. (b) Additional information; disclosures required by other laws. et seq. et seq. (c) Multiple accounts and account holders Multiple accounts. (2) Multiple account holders. (d) Services offered jointly. [Reg. E, 61 FR 19669, May 2, 1996, as amended at 63 FR 14532, Mar. 25, 1998; 66 FR 17793, Apr. 4, 2001; 72 FR 63456, Nov. 9, 2007; 75 FR 16613, Apr. 1, 2010] § 205.5 Issuance of access devices. (a) Solicited issuance. (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. (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 § 205.7, 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. § 205.6 Liability of consumer for unauthorized transfers. (a) Conditions for liability. (b) Limitations on amount of liability. (1) Timely notice given. (2) Timely notice not given. (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. (4) Extension of time limits. (5) Notice to financial institution. (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. § 205.7 Initial disclosures. (a) Timing of disclosures. (b) Content of disclosures. (1) Liability of consumer. (2) Telephone number and address. (3) Business days. (4) Types of transfers; limitations. (5) Fees. (6) Documentation. (7) Stop payment. (8) Liability of institution. (9) Confidentiality. (10) Error resolution. (11) ATM fees. (c) Addition of electronic fund transfer services. [Reg. E, 61 FR 19669, May 2, 1996, as amended at 66 FR 13412, Mar. 6, 2001; 71 FR 1659, Jan. 10, 2006] § 205.8 Change in terms notice; error resolution notice. (a) Change in terms notice Prior notice required. (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. (b) Error resolution notice. § 205.9 Receipts at electronic terminals; periodic statements. (a) Receipts at electronic terminals—General. (1) Amount. (2) Date. (3) Type. (4) Identification. (5) Terminal location. (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. (b) Periodic statements. (1) Transaction information. (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. (3) Fees. (4) Account balances. (5) Address and telephone number for inquiries. (6) Telephone number for preauthorized transfers. § 205.10(a)(1)(iii). (c) Exceptions to the periodic statement requirement for certain accounts Preauthorized transfers to accounts. (i) Passbook accounts. (ii) Other accounts. (2) Intra-institutional transfers. (3) Relationship between paragraphs (c)(1) and (c)(2) of this section. (d) Documentation for foreign-initiated transfers. (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 § 205.11. (e) Exception for receipts in small-value transfers. [Reg. E, 61 FR 19669, May 2, 1996, as amended at 72 FR 36593, July 5, 2007] § 205.10 Preauthorized transfers. (a) Preauthorized transfers to consumer's account Notice by financial institution. (i) Positive notice. (ii) Negative notice. (iii) Readily-available telephone line. (2) Notice by payor. (3) Crediting. (b) Written authorization for preauthorized transfers from consumer's account. (c) Consumer's right to stop payment Notice. (2) Written confirmation. (d) Notice of transfers varying in amount Notice. (2) Range. (e) Compulsory use Credit. (2) Employment or government benefit. § 205.11 Procedures for resolving errors. (a) Definition of error Types of transfers or inquiries covered. error (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 §§ 205.9 or 205.10(a); or (vii) The consumer's request for documentation required by §§ 205.9 or 205.10(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. error (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 Timing; contents. (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 § 205.9, 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. (3) Request for documentation or clarifications. (c) Time limits and extent of investigation Ten-day period. (2) Forty-five day period. (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 § 205.6(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 (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. (i) The applicable time is 20 business days in place of 10 business days under paragraphs (c)(1) and (c)(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. (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. (1) Written explanation. (2) Debiting provisional credit. (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. [Reg. E, 61 FR 19669, May 2, 1996, as amended at 63 FR 52118, Sept. 29, 1998] § 205.12 Relation to other laws. (a) Relation to Truth in Lending. (i) The addition to an accepted credit card as defined in Regulation Z (12 CFR 226.12, 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 § 205.17(a); (iii) The addition of an overdraft service, as defined in § 205.17(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 § 205.17(a). (2) The Truth in Lending Act and Regulation Z (12 CFR part 226), 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 Inconsistent requirements. (2) Standards for determination. (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 § 205.11(c)(2)(i); 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 General rule. (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. (i) No exemption shall extend to the civil liability provisions of section 915 of the act; and (ii) When the Board grants an exemption, the state law requirements shall constitute the requirements of the federal law for purposes of section 915 of the act, except for state law requirements not imposed by the federal law. [Reg. E, 61 FR 19669, May 2, 1996, as amended at 74 FR 59052, Nov. 17, 2009; 75 FR 16614, Apr. 1, 2010] § 205.13 Administrative enforcement; record retention. (a) Enforcement by federal agencies. (b) Record retention. (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, 915, or 916(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. § 205.14 Electronic fund transfer service provider not holding consumer's account. (a) Provider of electronic fund transfer service. (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. (1) Disclosures and documentation. (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 § 205.9(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 § 205.9(b)(1), in the format prescribed by the automated clearinghouse 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 § 205.6(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 §§ 205.6(b)(3) and 205.11(b)(1)(i), from 60 days to 90 days following the transmittal of a periodic statement by the account-holding institution. (2) Error resolution. (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 § 205.11(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 § 205.11(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 § 205.11(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. (1) Documentation. (2) Error resolution. § 205.15 Electronic fund transfer of government benefits. (a) Government agency subject to regulation. (2) For purposes of this section, the term account (b) Issuance of access devices. (c) Alternative to periodic statement. (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. (1) Initial disclosures. (i) Account balance. (ii) Written account history. (iii) Error resolution. (2) Annual error resolution notice. (3) Limitations on liability. (4) Error resolution. [Reg. E, 61 FR 19669, May 2, 1996, as amended at 62 FR 43469, Aug. 14, 1997] § 205.16 Disclosures at automated teller machines. (a) Definition. Automated teller machine operator (b) General. (1) Provide notice that a fee will be imposed for providing electronic fund transfer services or a balance inquiry; and (2) Disclose the amount of the fee. (c) Notice requirement. (1) On the machine. (i) A fee will be imposed for providing electronic fund transfer services or for a balance inquiry; or (ii) A fee may be imposed for providing electronic fund transfer services or for a balance inquiry, but the notice in this paragraph (c)(1)(ii) may be substituted for the notice in paragraph (c)(1)(i) only if there are circumstances under which a fee will not be imposed for such services; and (2) Screen or paper notice. (d) Temporary exemption. (e) Imposition of fee. (1) The consumer is provided the notices required under paragraph (c) of this section, and (2) The consumer elects to continue the transaction or inquiry after receiving such notices. [Reg. E, 66 FR 13412, Mar. 6, 2001, as amended at 71 FR 1659, Jan. 10, 2006] § 205.17 Requirements for overdraft services. (a) Definition. (1) A line of credit subject to the Federal Reserve Board's Regulation Z (12 CFR part 226), 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 the Federal Reserve Board's Regulation Z (12 CFR part 226) pursuant to 12 CFR 226.3(d). (b) Opt-in requirement General. (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. (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. (c) Timing Existing account holders. (2) New account holders. (d) Content and format. (1) Overdraft service. (2) Fees imposed. (3) Limits on fees charged. (4) Disclosure of opt-in right. (5) Alternative plans for covering overdrafts. (6) Permitted modifications and additional content. (e) Joint relationships. (f) Continuing right to opt in or to revoke the opt-in. (g) Duration and revocation of opt-in. [Reg. E, 74 FR 59052, Nov. 17, 2009, as amended at 75 FR 31671, June 4, 2010] § 205.18 Requirements for financial institutions offering payroll card accounts. (a) Coverage. (b) Alternative to periodic statements. (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 an Internet 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 § 205.9(b). (c) Modified requirements. (1) Initial disclosures. (i) Account information. (ii) Error resolution. (2) Annual error resolution notice. (3) Limitations on liability. (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 § 205.6(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. (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 § 205.11 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. [Reg. E, 71 FR 51449, Aug. 30, 2006] § 205.20 Requirements for gift cards and gift certificates. (a) Definitions. (1) Gift certificate (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 (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 (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 (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. (6) Service fee. (7) Activity. (b) Exclusions. (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, at the event or venue or at specific locations affiliated with and in geographic proximity to the event or venue. (c) Form of disclosures Clear and conspicuous. (2) Format. (3) Disclosures prior to purchase. (4) Disclosures on the certificate or card. (d) Prohibition on imposition of fees or charges. (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. (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. (1) Fee disclosures. (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. (g) Compliance dates Effective date for gift certificates, store gift cards, and general-use prepaid cards. (2) Effective date for loyalty, award, or promotional gift cards. (h) Temporary exemption Delayed effective date. (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. (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 915 of the Electronic Fund Transfer Act. (3) Expiration of additional disclosure requirements. (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. [Reg. E, 75 FR 16614, Apr. 1, 2010, as amended at 75 FR 50687, Aug. 17, 2010; 75 FR 66648, Oct. 29, 2010] Appendix A to Part 205—Model Disclosure Clauses and Forms Table of Contents A-1—Model Clauses for unsolicited issuance (§ 205.5(b)(2)) A-2—Model clauses for initial disclosures (§ 205.7(b)) A-3—Model forms for error resolution notice (§§ 205.7(b)(10) and 205.8(b)) A-4—Model form for service-providing institutions (§ 205.14(b)(1)(ii)) A-5—Model forms for government agencies (§ 205.15(d)(1) and (2)) A-9 Model Consent Form for Overdraft Services (§ 205.17) A-1—Model Clauses For Unsolicited Issuance (§ 205.5( b (a) Accounts using cards. [Financial institution may add validation instructions here.] (b) Accounts using codes. [Financial institution may add validation instructions here.] A-2—Model Clauses For Initial Disclosures (§ 205.7( b (a) Consumer Liability (§ 205.7(b)(1)). (Tell us AT ONCE if you believe your [card] [code] has been lost or stolen, or if you believe that an electronic fund transfer has been made without your permission using information from your check. Telephoning is the best way of keeping your possible losses down. You could lose all the money in your account (plus your maximum overdraft line of credit). If you tell us within 2 business days after you learn of the loss or theft of your [card] [code], you can lose no more than $50 if someone used your [card][code] without your permission.) If you do NOT tell us within 2 business days after you learn of the loss or theft of your [card] [code], and we can prove we could have stopped someone from using your [card] [code] without your permission if you had told us, you could lose as much as $500. Also, if your statement shows transfers that you did not make, including those made by card, code or other means, tell us at once. If you do not tell us within 60 days after the statement was mailed to you, you may not get back any money you lost after the 60 days if we can prove that we could have stopped someone from taking the money if you had told us in time. If a good reason (such as a long trip or a hospital stay) kept you from telling us, we will extend the time periods. (b) Contact in event of unauthorized transfer (§ 205.7(b)(2)). You should also call the number or write to the address listed above if you believe a transfer has been made using the information from your check without your permission. (c) Business days (§ 205.7(b)(3)). (d) Transfer types and limitations (§ 205.7(b)(4)) Account access. (i) Withdraw cash from your [checking] [or] [savings] account. (ii) Make deposits to your [checking] [or] [savings] account. (iii) Transfer funds between your checking and savings accounts whenever you request. (iv) Pay for purchases at places that have agreed to accept the [card] [code]. (v) Pay bills directly [by telephone] from your [checking] [or] [savings] account in the amounts and on the days you request. Some of these services may not be available at all terminals. (2) Electronic check conversion. (i) Pay for purchases. (ii) Pay bills. (3) Limitations on frequency of transfers. (ii) You can use your telephone bill-payment service to pay [insert number] bills each [insert time period] [telephone call]. (iii) You can use our point-of-sale transfer service for [insert number] transactions each [insert time period]. (iv) For security reasons, there are limits on the number of transfers you can make using our [terminals] [telephone bill-payment service] [point-of-sale transfer service]. (4) Limitations on dollar amounts of transfers. (ii) You may buy up to [insert dollar amount] worth of goods or services each [insert time period] time you use the [card] [code] in our point-of-sale transfer service. (e) Fees (§ 205.7(b)(5)) Per transfer charge. (2) Fixed charge. (3) Average or minimum balance charge. (f) Confidentiality (§ 205.7(b)(9)). (i) Where it is necessary for completing transfers, or (ii) In order to verify the existence and condition of your account for a third party, such as a credit bureau or merchant, or (iii) In order to comply with government agency or court orders, or (iv) If you give us your written permission. (g) Documentation (§ 205.7(b)(6)) Terminal transfers. (2) Preauthorized credits. (3) Periodic statements. (4) Passbook account where the only possible electronic fund transfers are preauthorized credits. (h) Preauthorized payments (§ 205.7(b) (6), (7) and (8); § 205.10(d)) Right to stop payment and procedure for doing so. Call us at [insert telephone number], or write us at [insert address], in time for us to receive your request 3 business days or more before the payment is scheduled to be made. If you call, we may also require you to put your request in writing and get it to us within 14 days after you call. (We will charge you [insert amount] for each stop-payment order you give.) (2) Notice of varying amounts. (3) Liability for failure to stop payment of preauthorized transfer. (i) Financial institution's liability (§ 205.7(b)(8)). (1) If, through no fault of ours, you do not have enough money in your account to make the transfer. (2) If the transfer would go over the credit limit on your overdraft line. (3) If the automated teller machine where you are making the transfer does not have enough cash. (4) If the [terminal] [system] was not working properly and you knew about the breakdown when you started the transfer. (5) If circumstances beyond our control (such as fire or flood) prevent the transfer, despite reasonable precautions that we have taken. (6) There may be other exceptions stated in our agreement with you. (j) ATM fees (§ 205.7(b)(11)). A-3—Model Forms For Error Resolution Notice (§§ 205.7( b b (a) Initial and annual error resolution notice (§§ 205.7(b)(10) and 205.8(b)). In Case of Errors or Questions About Your Electronic Transfers Telephone us at [insert telephone number] Write us at [insert address] [or E-mail us at [insert electronic mail address]] as soon as you can, if you think your statement or receipt is wrong or if you need more information about a transfer listed on the statement or receipt. We must hear from you no later than 60 days after we sent the FIRST statement on which the problem or error appeared. (1) Tell us your name and account number (if any). (2) Describe the error or the transfer you are unsure about, and explain as clearly as you can why you believe it is an error or why you need more information. (3) Tell us the dollar amount of the suspected error. If you tell us orally, we may require that you send us your complaint or question in writing within 10 business days. We will determine whether an error occurred within 10 business days after we hear from you and will correct any error promptly. If we need more time, however, we may take up to 45 days to investigate your complaint or question. If we decide to do this, we will credit your account within 10 business days for the amount you think is in error, so that you will have the use of the money during the time it takes us to complete our investigation. If we ask you to put your complaint or question in writing and we do not receive it within 10 business days, we may not credit your account. For errors involving new accounts, point-of-sale, or foreign-initiated transactions, we may take up to 90 days to investigate your complaint or question. For new accounts, we may take up to 20 business days to credit your account for the amount you think is in error. We will tell you the results within three business days after completing our investigation. If we decide that there was no error, we will send you a written explanation. You may ask for copies of the documents that we used in our investigation. (b) Error resolution notice on periodic statements (§ 205.8(b)). In Case of Errors or Questions About Your Electronic Transfers Telephone us at [insert telephone number] or Write us at [insert address] as soon as you can, if you think your statement or receipt is wrong or if you need more information about a transfer on the statement or receipt. We must hear from you no later than 60 days after we sent you the FIRST statement on which the error or problem appeared. (1) Tell us your name and account number (if any). (2) Describe the error or the transfer you are unsure about, and explain as clearly as you can why you believe it is an error or why you need more information. (3) Tell us the dollar amount of the suspected error. We will investigate your complaint and will correct any error promptly. If we take more than 10 business days to do this, we will credit your account for the amount you think is in error, so that you will have the use of the money during the time it takes us to complete our investigation. A-4—Model Form For Service-providing Institutions (§ 205.14( b ii ALL QUESTIONS ABOUT TRANSACTIONS MADE WITH YOUR (NAME OF CARD) CARD MUST BE DIRECTED TO US (NAME OF SERVICE PROVIDER), AND NOT TO THE BANK OR OTHER FINANCIAL INSTITUTION WHERE YOU HAVE YOUR ACCOUNT. We are responsible for the [name of service] service and for resolving any errors in transactions made with your [name of card] card. We will not send you a periodic statement listing transactions that you make using your [name of card] card. The transactions will appear only on the statement issued by your bank or other financial institution. SAVE THE RECEIPTS YOU ARE GIVEN WHEN YOU USE YOUR [NAME OF CARD] CARD, AND CHECK THEM AGAINST THE ACCOUNT STATEMENT YOU RECEIVE FROM YOUR BANK OR OTHER FINANCIAL INSTITUTION. If you have any questions about one of these transactions, call or write us at [telephone number and address] [the telephone number and address indicated below]. IF YOUR [NAME OF CARD] CARD IS LOST OR STOLEN, NOTIFY US AT ONCE by calling or writing to us at [telephone number and address]. A-5—Model Forms For Government Agencies(§ 205.15( d (a) Disclosure by government agencies of information about obtaining account balances and account histories (§ 205.15(d)(1)(i) and (ii)). You may obtain information about the amount of benefits you have remaining by calling [telephone number]. That information is also available [on the receipt you get when you make a transfer with your card at (an ATM)(a POS terminal)][when you make a balance inquiry at an ATM][when you make a balance inquiry at specified locations]. You also have the right to receive a written summary of transactions for the 60 days preceding your request by calling [telephone number]. [Optional: Or you may request the summary by contacting your caseworker.] (b) Disclosure of error resolution procedures for government agencies that do not provide periodic statements (§ 205.15(d)(1)(iii) and (d)(2)). In Case of Errors or Questions About Your Electronic Transfers Telephone us at [telephone number] Write us at [insert address] [or E-mail us at [insert electronic mail address]] as soon as you can, if you think an error has occurred in your [EBT][agency's name for program] account. We must hear from you no later than 60 days after you learn of the error. You will need to tell us: • Your name and [case] [file] number. • Why you believe there is an error, and the dollar amount involved. • Approximately when the error took place. If you tell us orally, we may require that you send us your complaint or question in writing within 10 business days. We will determine whether an error occurred within 10 business days after we hear from you and will correct any error promptly. If we need more time, however, we may take up to 45 days to investigate your complaint or question. If we decide to do this, we will credit your account within 10 business days for the amount you think is in error, so that you will have the use of the money during the time it takes us to complete our investigation. If we ask you to put your complaint or question in writing and we do not receive it within 10 business days, we may not credit your account. For errors involving new accounts, point-of-sale, or foreign-initiated transactions, we may take up to 90 days to investigate your complaint or question. For new accounts, we may take up to 20 business days to credit your account for the amount you think is in error. We will tell you the results within three business days after completing our investigation. If we decide that there was no error, we will send you a written explanation. You may ask for copies of the documents that we used in our investigation. If you need more information about our error resolution procedures, call us at [telephone number][the telephone number shown above]. A-6 Model Clauses for Authorizing One-Time Electronic Fund Transfers Using Information From a Check (§ 205.3( b (a)—Notice About Electronic Check Conversion When you provide a check as payment, you authorize us either to use information from your check to make a one-time electronic fund transfer from your account or to process the payment as a check transaction. (b)—Alternative Notice About Electronic Check Conversion (Optional) When you provide a check as payment, you authorize us to use information from your check to make a one-time electronic fund transfer from your account. In certain circumstances, such as for technical or processing reasons, we may process your payment as a check transaction. [ Specify other circumstances (at payee's option). (c)—Notice For Providing Additional Information About Electronic Check Conversion When we use information from your check to make an electronic fund transfer, funds may be withdrawn from your account as soon as the same day [you make] [we receive] your payment[, and you will not receive your check back from your financial institution]. A-7—Model Clauses for Financial Institutions Offering Payroll Card Accounts (§ 205.18( c (a)—Disclosure by financial institutions of information about obtaining account information for payroll card accounts. § 205.18(c)(1). You may obtain information about the amount of money you have remaining in your payroll card account by calling [telephone number]. This information, along with a 60-day history of account transactions, is also available on-line at [Internet address]. You also have the right to obtain a 60-day written history of account transactions by calling [telephone number], or by writing us at [address]. (b)—Disclosure of error-resolution procedures for financial institutions that provide alternative means of obtaining payroll card account information (§ 205.18(c)(1)(ii) and (c)(2)). In Case of Errors or Questions About Your Payroll Card Account Telephone us at [telephone number] or Write us at [address] [or E-mail us at [electronic mail address]] as soon as you can, if you think an error has occurred in your payroll card account. We must allow you to report an error until 60 days after the earlier of the date you electronically access your account, if the error could be viewed in your electronic history, or the date we sent the FIRST written history on which the error appeared. You may request a written history of your transactions at any time by calling us at [telephone number] or writing us at [address]. You will need to tell us: Your name and [payroll card account] number. Why you believe there is an error, and the dollar amount involved. Approximately when the error took place. If you tell us orally, we may require that you send us your complaint or question in writing within 10 business days. We will determine whether an error occurred within 10 business days after we hear from you and will correct any error promptly. If we need more time, however, we may take up to 45 days to investigate your complaint or question. If we decide to do this, we will credit your account within 10 business days for the amount you think is in error, so that you will have the money during the time it takes us to complete our investigation. If we ask you to put your complaint or question in writing and we do not receive it within 10 business days, we may not credit your account. For errors involving new accounts, point-of-sale, or foreign-initiated transactions, we may take up to 90 days to investigate your complaint or question. For new accounts, we may take up to 20 business days to credit your account for the amount you think is in error. We will tell you the results within three business days after completing our investigation. If we decide that there was no error, we will send you a written explanation. You may ask for copies of the documents that we used in our investigation. If you need more information about our error-resolution procedures, call us at [telephone number] [the telephone number shown above] [or visit [Internet address]]. A-8 Model Clause for Electronic Collection of Returned Item Fees (§ 205.3( b If your payment is returned unpaid, you authorize [us/ name of person collecting the fee electronically] to make a one-time electronic fund transfer from your account to collect a fee of [$____]. [If your payment is returned unpaid, you authorize [us/ name of person collecting the fee electronically] to make a one-time electronic fund transfer from your account to collect a fee. The fee will be determined [by]/ [as follows]: [________________].] A-9 Model Consent Form for Overdraft Services (§ 205.17) [Reg. E, 61 FR 19669, May 2, 1996, as amended at 63 FR 52118, Sept. 29, 1998; 66 FR 13412, Mar. 6, 2001; 66 FR 17793, Apr. 4, 2001; 71 FR 1659, Jan. 10, 2006; 71 FR 51456, Aug. 30, 2006; 71 FR 69437, Dec. 1, 2006; 72 FR 51450, Aug. 30, 2006; 74 FR 59053, Nov. 17, 2009] Appendix B to Part 205—Federal Enforcement Agencies The following list indicates which Federal agency enforces Regulation E (12 CFR part 205) for particular classes of institutions. Any questions concerning compliance by a particular institution should be directed to the appropriate enforcing agency. Terms that are not defined in the Federal Deposit Insurance Act (12 U.S.C. 1813(s)) shall have the meaning given to them in the International Banking Act of 1978 (12 U.S.C. 3101). National banks, and Federal branches and Federal agencies of foreign banks District office of the Office of the Comptroller of the Currency where the institution is located. State member banks, branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured state branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25(a) of the Federal Reserve Act Federal Reserve Bank serving the District in which the institution is located. Nonmember insured banks and insured state branches of foreign banks Federal Deposit Insurance Corporation regional director for the region in which the institution is located. Savings institutions insured under the Savings Association Insurance Fund of the FDIC and federally-chartered savings banks insured under the Bank Insurance Fund of the FDIC (but not including state-chartered savings banks insured under the Bank Insurance Fund) Office of Thrift Supervision Regional Director for the region in which the institution is located. Federal Credit Unions Division of Consumer Affairs, National Credit Union Administration, 1775 Duke Street, Alexandria, Virginia 22314-3428 Air Carriers Assistant General Counsel for Aviation Enforcement and Proceedings, Department of Transportation, 400 Seventh Street, S.W., Washington, D.C. 20590. Brokers and Dealers Division of Market Regulation, Securities and Exchange Commission, Washington, D.C. 20549. Retailers, Consumer Finance Companies, Certain Other Financial Institutions, and all others not covered above Federal Trade Commission, Electronic Fund Transfers, Washington, D.C. 20580. Appendix C to Part 205—Issuance of Staff Interpretations Official Staff Interpretations Pursuant to section 915(d) of the act, the Board has designated the director and other officials of the Division of Consumer and Community Affairs as officials “duly authorized” to issue, at their discretion, official staff interpretations of this part. Except in unusual circumstances, such interpretations will not be issued separately but will be incorporated in an official commentary to this part, which will be amended periodically. Requests for Issuance of Official Staff Interpretations A request for an official staff interpretation shall be in writing and addressed to the Director, Division of Consumer and Community Affairs, Board of Governors of the Federal Reserve System, Washington, D.C. 20551. The request shall contain a complete statement of all relevant facts concerning the issue, including copies of all pertinent documents. Scope of Interpretations No staff interpretations will be issued approving financial institutions' forms or statements. This restriction does not apply to forms or statements whose use is required or sanctioned by a government agency. Supplement I to Part 205—Official Staff Interpretations Section 205.2—Definitions 2(a) Access Device 1. Examples. 2. Checks used to capture information. 2(b) Account 1. Consumer asset account. i. Club accounts, such as vacation clubs. In many cases, however, these accounts are exempt from the regulation under § 205.3(c)(5) because all electronic transfers to or from the account have been preauthorized by the consumer and involve another account of the consumer at the same institution. ii. A retail repurchase agreement (repo), which is a loan made to a financial institution by a consumer that is collateralized by government or government-insured securities. 2. Certain employment-related cards not covered. 3. Examples of accounts not covered by Regulation E (12 CFR part 205) include: i. Profit-sharing and pension accounts established under a trust agreement, which are exempt under § 205.2(b)(2). ii. Escrow accounts, such as those established to ensure payment of items such as real estate taxes, insurance premiums, or completion of repairs or improvements. iii. Accounts for accumulating funds to purchase U.S. savings bonds. Paragraph 2(b)(2) 1. Bona fide trust agreements. 2. Custodial agreements. 2(d) Business Day 1. Duration. 2. Substantially all business functions. 3. Short hours. 4. Telephone line. 2(h) Electronic Terminal 1. Point-of-sale (POS) payments initiated by telephone. i. A consumer uses a debit card at a public telephone to pay for the call. ii. A consumer initiates a transfer by a means analogous in function to a telephone, such as by home banking equipment or a facsimile machine. 2. POS terminals. 3. Teller-operated terminals. 2(k) Preauthorized Electronic Fund Transfer 1. Advance authorization. 2(m) Unauthorized Electronic Fund Transfer 1. Transfer by institution's employee. 2. Authority. 3. Access device obtained through robbery or fraud. 4. Forced initiation. 5. Reversal of direct deposits. i. A credit made to the wrong consumer's account; ii. A duplicate credit made to a consumer's account; or iii. A credit in the wrong amount (for example, when the amount credited to the consumer's account differs from the amount in the transmittal instructions). Section 205.3—Coverage 3(a) General 1. Accounts covered. i. The consumer and the financial institution (including an account for which an access device has been issued to the consumer, for example); ii. The consumer and a third party (for preauthorized debits or credits, for example), when the account-holding institution has received notice of the agreement and the fund transfers have begun. 2. Automated clearing house (ACH) membership. 3. Foreign applicability. 3(b) Electronic Fund Transfer Paragraph 3(b)(1)—Definition 1. Fund transfers covered. i. A deposit made at an ATM or other electronic terminal (including a deposit in cash or by check) provided a specific agreement exists between the financial institution and the consumer for EFTs to or from the account to which the deposit is made. ii. A transfer sent via ACH. For example, social security benefits under the U.S. Treasury's direct-deposit program are covered, even if the listing of payees and payment amounts reaches the account-holding institution by means of a computer printout from a correspondent bank. iii. A preauthorized transfer credited or debited to an account in accordance with instructions contained on magnetic tape, even if the financial institution holding the account sends or receives a composite check. iv. A transfer from the consumer's account resulting from a debit-card transaction at a merchant location, even if no electronic terminal is involved at the time of the transaction, if the consumer's asset account is subsequently debited for the amount of the transfer. v. A transfer via ACH where a consumer has provided a check to enable the merchant or other payee to capture the routing, account, and serial numbers to initiate the transfer, whether the check is blank, partially completed, or fully completed and signed; whether the check is presented at POS or is mailed to a merchant or other payee or lockbox and later converted to an EFT; or whether the check is retained by the consumer, the merchant or other payee, or the payee's financial institution. vi. A payment made by a bill payer under a bill-payment service available to a consumer via computer or other electronic means, unless the terms of the bill-payment service explicitly state that all payments, or all payments to a particular payee or payees, will be solely by check, draft, or similar paper instrument drawn on the consumer's account, and the payee or payees that will be paid in this manner are identified to the consumer. 2. Fund transfers not covered. i. A payment that does not debit or credit a consumer asset account, such as a payroll allotment to a creditor to repay a credit extension (which is deducted from salary). ii. A payment made in currency by a consumer to another person at an electronic terminal. iii. A preauthorized check drawn by the financial institution on the consumer's account (such as an interest or other recurring payment to the consumer or another party), even if the check is computer-generated. iv. Transactions arising from the electronic collection, presentment, or return of checks through the check collection system, such as through transmission of electronic check images. Paragraph 3(b)(2)—Electronic Fund Transfer Using Information From a Check 1. Notice at POS not furnished due to inadvertent error. 2. Authorization to process a transaction as an EFT or as a check. 3. Notice for each transfer. 4. Multiple payments/multiple consumers. 5. Additional disclosures about ECK transactions at POS. Paragraph 3(b)(3)—Collection of Returned Item Fees via Electronic Fund Transfer 1. Fees imposed by account-holding institution. 2. Accounts receivable transactions. 3. Disclosure of dollar amount of fee for POS transactions. 4. Third party providing notice. 3(c) Exclusions From Coverage Paragraph 3(c)(1)—Checks 1. Re-presented checks. 2. Check used to capture information for a one-time EFT. Paragraph 3(c)(2)—Check Guarantee or Authorization 1. Memo posting. Paragraph 3(c)(3)—Wire or Other Similar Transfers 1. Fedwire and ACH. 2. Article 4A. 3. Similar fund transfer systems. Paragraph 3(c)(4)—Securities and Commodities Transfers 1. Coverage. 2. Example of exempt transfer. 3. Examples of nonexempt transfers. i. A debit card or other access device that accesses a securities or commodities account such as a money market mutual fund and that the consumer uses for purchasing goods or services or for obtaining cash. ii. A payment of interest or dividends into the consumer's account (for example, from a brokerage firm or from a Federal Reserve Bank for government securities). Paragraph 3(c)(5)—Automatic Transfers by Account-Holding Institution 1. Automatic transfers exempted. i. Electronic debits or credits to consumer accounts for check charges, stop-payment charges, NSF charges, overdraft charges, provisional credits, error adjustments, and similar items that are initiated automatically on the occurrence of certain events. ii. Debits to consumer accounts for group insurance available only through the financial institution and payable only by means of an aggregate payment from the institution to the insurer. iii. EFTs between a thrift institution and its paired commercial bank in the state of Rhode Island, which are deemed under state law to be intra-institutional. iv. Automatic transfers between a consumer's accounts within the same financial institution, even if the account holders on the two accounts are not identical. 2. Automatic transfers not exempted. Paragraph 3(c)(6)—Telephone-Initiated Transfers 1. Written plan or agreement. i. A hold-harmless agreement on a signature card that protects the institution if the consumer requests a transfer. ii. A legend on a signature card, periodic statement, or passbook that limits the number of telephone-initiated transfers the consumer can make from a savings account because of reserve requirements under Regulation D (12 CFR part 204). iii. An agreement permitting the consumer to approve by telephone the rollover of funds at the maturity of an instrument. 2. Examples of covered transfers. i. An employee of the financial institution completes the transfer manually (for example, by means of a debit memo or deposit slip). ii. The consumer is required to make a separate request for each transfer. iii. The consumer uses the plan infrequently. iv. The consumer initiates the transfer via a facsimile machine. v. The consumer initiates the transfer using a financial institution's audio-response or voice-response telephone system. Paragraph 3(c)(7)—Small Institutions 1. Coverage. Section 205.4—General Disclosure Requirements; Jointly Offered Services 4(a) Form of Disclosures 1. General. 2. Foreign language disclosures. Section 205.5—Issuance of Access Devices 1. Coverage. 5(a) Solicited Issuance Paragraph 5(a)(1) 1. Joint account. 2. Permissible forms of request. Paragraph 5(a)(2) 1. One-for-one rule. 2. Renewal or substitution by a successor institution. 5(b) Unsolicited Issuance 1. Compliance. 2. PINS. 3. Functions of PIN. 4. Verification of identity. 5. Additional access devices in a renewal or substitution. Section 205.6—Liability of Consumer for Unauthorized Transfers 6(a) Conditions for Liability 1. Means of identification. i. Electronic or mechanical confirmation (such as a PIN). ii. Comparison of the consumer's signature, fingerprint, or photograph. 2. Multiple users. 6(b) Limitations on Amount of Liability 1. Application of liability provisions. 2. Consumer negligence. 3. Limits on liability. Paragraph 6(b)(1)—Timely Notice Given 1. $50 limit applies. 2. Knowledge of loss or theft of access device. 3. Two-business-day rule. Paragraph 6(b)(2)—Timely Notice Not Given 1. $500 limit applies. Paragraph 6(b)(3)—Periodic Statement; Timely Notice Not Given 1. Unlimited liability applies. 2. Transfers not involving access device. Paragraph 6(b)(4)—Extension of Time Limits 1. Extenuating circumstances. Paragraph 6(b)(5)—Notice to Financial Institution 1. Receipt of notice. 2. Notice by third party. 3. Content of notice. Section 205.7—Initial Disclosures 7(a) Timing of Disclosures 1. Early disclosures. 2. Lack of advance notice of a transfer. 3. Addition of new accounts. 4. Addition of service in interchange systems. 5. Disclosures covering all EFT services offered. 7(b) Content of Disclosures Paragraph 7(b)(1)—Liability of Consumer 1. No liability imposed by financial institution. 2. Preauthorized transfers. 3. Additional information. Paragraph 7(b)(2)—Telephone Number and Address 1. Disclosure of telephone numbers. i. Reporting the loss or theft of an access device or possible unauthorized transfers; ii. Inquiring about the receipt of a preauthorized credit; iii. Stopping payment of a preauthorized debit; iv. Giving notice of an error. 2. Location of telephone number. Paragraph 7(b)(4)—Types of Transfers; Limitations 1. Security limitations. 2. Restrictions on certain deposit accounts. 3. Preauthorized transfers. 4. One-time EFTs initiated using information from a check. Paragraph 7(b)(5)—Fees 1. Disclosure of EFT fees. 2. Fees also applicable to non-EFT. 3. Interchange system fees. Paragraph 7(b)(9)—Confidentiality 1. Information provided to third parties. Paragraph 7(b)(10)—Error Resolution 1. Substantially similar. 2. Extended time-period for certain transactions. 7(c) Addition of Electronic Fund Transfer Services 1. Addition of electronic check conversion services. Section 205.8—Change-in-Terms Notice; Error Resolution Notice 8(a) Change-in-Terms Notice 1. Form of notice. 2. Changes not requiring notice. i. Closing some of an institution's ATMs; ii. Cancellation of an access device. 3. Limitations on transfers. 4. Change in telephone number or address. 8(b) Error Resolution Notice 1. Change between annual and periodic notice. 2. Exception for new accounts. Section 205.9—Receipts at Electronic Terminals; Periodic Statements 9(a) Receipts at Electronic Terminals 1. Receipts furnished only on request. 2. Third party providing receipt. 3. Inclusion of promotional material. 4. Transfer not completed. 5. Receipts not furnished due to inadvertent error. 6. Multiple transfers. Paragraph 9(a)(1)—Amount 1. Disclosure of transaction fee. 2. Relationship between § 205.9(a)(1) and § 205.16. i. Section 205.9(a)(1) requires that if the amount of the transfer as shown on the receipt will include the fee, then the fee must be disclosed either on a sign on or at the terminal, or on the terminal screen. Section 205.16 requires disclosure both on a sign on or at the terminal (in a prominent and conspicuous location) and on the terminal screen. Section 205.16 permits disclosure on a paper notice as an alternative to the on-screen disclosure. ii. The disclosure of the fee on the receipt under § 205.9(a)(1) cannot be used to comply with the alternative paper disclosure procedure under § 205.16, if the receipt is provided at the completion of the transaction because, pursuant to the statute, the paper notice must be provided before the consumer is committed to paying the fee. iii. Section 205.9(a)(1) applies to any type of electronic terminal as defined in Regulation E (for example, to POS terminals as well as to ATMs), while § 205.16 applies only to ATMs. Paragraph 9(a)(2)—Date 1. Calendar date. Paragraph 9(a)(3)—Type 1. Identifying transfer and account. 2. Exception. 3. Access to multiple accounts. 4. Generic descriptions. 5. Point-of-sale transactions. Paragraph 9(a)(5)—Terminal Location 1. Options for identifying terminal. i. The city, state or foreign country, and the information in §§ 205.9(a)(5) (i), (ii), or (iii), or ii. A number or a code identifying the terminal. If the institution chooses the second option, the code or terminal number identifying the terminal where the transfer is initiated may be given as part of a transaction code. 2. Omission of city name. 3. Omission of a state. i. All the terminals owned or operated by the financial institution providing the statement (or by the system in which it participates) are located in that state, or ii. All transfers occur at terminals located within 50 miles of the financial institutions's main office. 4. Omission of a city and state. Paragraph 9(a)(5)(i) 1. Street address. Paragraph 9(a)(5)(ii) 1. Generally accepted name. Paragraph 9(a)(5)(iii) 1. Name of owner or operator of terminal. Paragraph 9(a)(6)—Third Party Transfer 1. Omission of third-party name. 2. Receipt as proof of payment. 9(b) Periodic Statements 1. Periodic cycles. 2. Interim statements. 3. Inactive accounts. 4. Statement pickup. 5. Periodic statements limited to EFT activity. 6. Codes and accompanying documents. i. Include copies of terminal receipts to reflect transfers initiated by the consumer at electronic terminals; ii. Enclose posting memos, deposit slips, and other documents that, together with the statement, disclose all the required information; iii. Use codes for names of third parties or terminal locations and explain the information to which the codes relate on an accompanying document. Paragraph 9(b)(1)—Transaction Information 1. Information obtained from others. Paragraph 9(b)(1)(i) 1. Incorrect deposit amount. Paragraph 9(b)(1)(iii) 1. Type of transfer. Paragraph 9(b)(1)(iv) 1. Nonproprietary terminal in network. Paragraph 9(b)(1)(v) 1. Recurring payments by government agency. 2. Consumer as third-party payee. 3. Terminal location/third party. 4. Account-holding institution as third party. 5. Consistency in third-party identity. 6. Third-party identity on deposits at electronic terminal. Paragraph 9(b)(3)—Fees 1. Disclosure of fees. 2. Fees in interchange system. 3. Finance charges. Paragraph 9(b)(4)—Account Balances 1. Opening and closing balances. Paragraph 9(b)(5)—Address and Telephone Number for Inquiries 1. Telephone number. Paragraph 9(b)(6)—Telephone Number for Preauthorized Transfers 1. Telephone number. 9(c) Exceptions to the Periodic Statement Requirements for Certain Accounts 1. Transfers between accounts. Paragraph 9(c)(1)—Preauthorized Transfers to Accounts 1. Accounts that may be accessed only by preauthorized transfers to the account. 2. Reversal of direct deposits. 9(d) Documentation for Foreign-Initiated Transfers 1. Foreign-initiated transfers. Section 205.10—Preauthorized Transfers 10(a) Preauthorized Transfers to Consumer's Account Paragraph 10(a)(1)—Notice by Financial Institution 1. Content. 2. Notice of credit. 3. Positive notice. 4. Negative notice. 5. Telephone notice. 6. Phone number for passbook accounts. 7. Telephone line availability. 10(b) Written Authorization for Preauthorized Transfers From Consumer's Account 1. Preexisting authorizations. 2. Authorization obtained by third party. 3. Written authorization for preauthorized transfers. 4. Use of a confirmation form. 5. Similarly authenticated. et seq., 6. Requirements of an authorization. 7. Bona fide error. 10(c) Consumer's Right To Stop Payment 1. Stop-payment order. 2. Revocation of authorization. 3. Alternative procedure for processing a stop-payment request. 10(d) Notice of Transfers Varying in Amount Paragraph 10(d)(1)—Notice 1. Preexisting authorizations. Paragraph 10(d)(2)—Range 1. Range. 2. Transfers to an account of the consumer held at another institution. 10(e) Compulsory Use Paragraph 10(e)(1)—Credit 1. Loan payments. i. Mortgages with graduated payments in which a pledged savings account is automatically debited during an initial period to supplement the monthly payments made by the borrower. ii. Mortgage plans calling for preauthorized biweekly payments that are debited electronically to the consumer's account and produce a lower total finance charge. 2. Overdraft. Paragraph 10(e)(2)—Employment or Government Benefit 1. Payroll. Section 205.11—Procedures for Resolving Errors 11(a) Definition of Error 1. Terminal location. 2. Verifying an account debit or credit. 3. Loss or theft of access device. 4. Error asserted after account closed. 5. Request for documentation or information. 6. Terminal receipts for transfers of $15 or less. 11(b) Notice of Error From Consumer Paragraph 11(b)(1)—Timing; Contents 1. Content of error notice. 2. Investigation pending receipt of information. 3. Statement held for consumer. 4. Failure to provide statement. 5. Discovery of error by institution. 6. Notice at particular phone number or address. 7. Effect of late notice. Paragraph 11(b)(2)—Written Confirmation 1. Written confirmation-of-error notice. 11(c) Time Limits and Extent of Investigation 1. Notice to consumer. 2. Written confirmation of oral notice. 3. Charges for error resolution. 4. Correction without investigation. 5. Correction notice. 6. Correction of an error. 7. Extent of required investigation. Paragraph 11(c)(2)(i) 1. Compliance with all requirements. Paragraph 11(c)(3)—Extension of Time Periods 1. POS debit card transactions. Paragraph 11(c)(4)—Investigation 1. Third parties. 2. Scope of investigation. 3. POS transfers. 4. Agreement. 5. No EFT agreement. Information that may be reviewed as part of an investigation might include: i. The ACH transaction records for the transfer; ii. The transaction history of the particular account for a reasonable period of time immediately preceding the allegation of error; iii. Whether the check number of the transaction in question is notably out-of-sequence; iv. The location of either the transaction or the payee in question relative to the consumer's place of residence and habitual transaction area; v. Information relative to the account in question within the control of the institution's third-party service providers if the financial institution reasonably believes that it may have records or other information that could be dispositive; or vi. Any other information appropriate to resolve the claim. 11(d) Procedures if Financial Institution Determines No Error or Different Error Occurred 1. Error different from that alleged. Paragraph 11(d)(1)—Written Explanation 1. Request for documentation. Paragraph 11(d)(2)—Debiting Provisional Credit 1. Alternative procedure for debiting of credited funds. 2. Fees for overdrafts. 11(e) Reassertion of Error 1. Withdrawal of error; right to reassert. Section 205.12—Relation to Other Laws 12(a) Relation to Truth in Lending 1. Determining applicable regulation. ii. The following examples illustrate these principles: A. A consumer has a card that can be used either as a credit card or a debit card. When used as a debit card, the card draws on the consumer's checking account. When used as a credit card, the card draws only on a separate line of credit. If the card is stolen and used as a credit card to make purchases or to get cash advances at an ATM from the line of credit, the liability limits and error resolution provisions of Regulation Z apply; Regulation E does not apply. B. In the same situation, if the card is stolen and is used as a debit card to make purchases or to get cash withdrawals at an ATM from the checking account, the liability limits and error resolution provisions of Regulation E apply; Regulation Z does not apply. C. In the same situation, assume the card is stolen and used both as a debit card and as a credit card; for example, the thief makes some purchases using the card as a debit card, and other purchases using the card as a credit card. Here, the liability limits and error resolution provisions of Regulation E apply to the unauthorized transactions in which the card was used as a debit card, and the corresponding provisions of Regulation Z apply to the unauthorized transactions in which the card was used as a credit card. D. Assume a somewhat different type of card, one that draws on the consumer's checking account and can also draw on an overdraft line of credit attached to the checking account. There is no separate line of credit, only the overdraft line, associated with the card. In this situation, if the card is stolen and used, the liability limits and the error resolution provisions of Regulation E apply. In addition, if the use of the card has resulted in accessing the overdraft line of credit, the error resolution provisions of § 226.13(d) and (g) of Regulation Z also apply, but not the other error resolution provisions of Regulation Z. 2. Issuance rules. 3. Overdraft service. 12(b) Preemption of Inconsistent State Laws 1. Specific determinations. 2. Preemption determination. i. Definition of unauthorized use. Section 5(4) is preempted to the extent that it relates to the section of state law governing consumer liability for unauthorized use of an access device. ii. Consumer liability for unauthorized use of an account. Section 14 is inconsistent with § 205.6 and is less protective of the consumer than the federal law. The state law places liability on the consumer for the unauthorized use of an account in cases involving the consumer's negligence. Under the federal law, a consumer's liability for unauthorized use is not related to the consumer's negligence and depends instead on the consumer's promptness in reporting the loss or theft of the access device. iii. Error resolution. Section 15 is preempted because it is inconsistent with § 205.11 and is less protective of the consumer than the federal law. The state law allows financial institutions up to 70 days to resolve errors, whereas the federal law generally requires errors to be resolved within 45 days. iv. Receipts and periodic statements. Sections 17 and 18 are preempted because they are inconsistent with § 205.9. The state provisions require a different disclosure of information than does the federal law. The receipt provision is also preempted because it allows the consumer to be charged for receiving a receipt if a machine cannot furnish one at the time of a transfer. Section 205.13—Administrative Enforcement; Record Retention 13(b) Record Retention 1. Requirements. Section 205.14—Electronic Fund Transfer Service Provider Not Holding Consumer's Account 14(a) Electronic Fund Transfer Service Providers Subject to Regulation 1. Applicability. 2. ACH agreements. 14(b) Compliance by Electronic Fund Transfer Service Provider 1. Liability. Paragraph 14(b)(1)—Disclosures and Documentation 1. Periodic statements from electronic fund transfer service provider. Paragraph 14(b)(2)—Error Resolution 1. Error resolution. 14(c) Compliance by Account-Holding Institution Paragraph 14(c)(1) 1. Periodic statements from account-holding institution. Section 205.16—Disclosures at Automated Teller Machines 16(b) General Paragraph 16(b)(1) 1. Specific notices. Section 205.17—Requirements for Overdraft Services 17(a) Definition 1. Exempt securities- and commodities-related lines of credit. 17(b) Opt-In Requirement 1. Scope. i. Account-holding institutions. ii. Coding of transactions. iii. One-time debit card transactions. iv. Application of fee prohibition. 2. No affirmative consent. 3. Overdraft transactions not required to be authorized or paid. 4. Reasonable opportunity to provide affirmative consent. i. By mail. ii. By telephone. iii. By electronic means. iv. In person. 5. Implementing opt-in at account-opening. 6. Affirmative consent required. 7. Confirmation. See 8. Outstanding Negative Balance. 9. Daily or Sustained Overdraft, Negative Balance, or Similar Fee or Charge i. Daily or sustained overdraft, negative balance, or similar fees or charges. ii. Examples. a. Assume that a consumer has a $50 account balance on March 1. That day, the institution posts a one-time debit card transaction of $60 and a check transaction of $40. The institution charges an overdraft fee of $20 for the check overdraft but cannot assess an overdraft fee for the debit card transaction. At the end of the day, the consumer has an account balance of negative $70. The consumer does not make any deposits to the account, and no other transactions occur between March 2 and March 6. Because the consumer's negative balance is attributable in part to the $40 check (and associated overdraft fee), the institution may charge a sustained overdraft fee on March 6 in connection with the check. b. Same facts as in a., except that on March 3, the consumer deposits $40 in the account. The institution allocates the $40 to the debit card transaction first, consistent with its posting order policy. At the end of the day on March 3, the consumer has an account balance of negative $30, which is attributable to the check transaction (and associated overdraft fee). The consumer does not make any further deposits to the account, and no other transactions occur between March 4 and March 6. Because the remaining negative balance is attributable to the March 1 check transaction, the institution may charge a sustained overdraft fee on March 6 in connection with the check. c. Assume that a consumer has a $50 account balance on March 1. That day, the institution posts a one-time debit card transaction of $60. At the end of that day, the consumer has an account balance of negative $10. The institution may not assess an overdraft fee for the debit card transaction. On March 3, the institution pays a check transaction of $100 and charges an overdraft fee of $20. At the end of that day, the consumer has an account balance of negative $130. The consumer does not make any deposits to the account, and no other transactions occur between March 4 and March 8. Because the consumer's negative balance is attributable in part to the check, the institution may assess a $20 sustained overdraft fee. However, because the check was paid on March 3, the institution must use March 3 as the start date for determining the date on which the sustained overdraft fee may be assessed. Thus, the institution may charge a $20 sustained overdraft fee on March 8. iii. Alternative approach. Paragraph 17(b)(2)—Conditioning Payment of Other Overdrafts on Consumer's Affirmative Consent 1. Application of the same criteria. 2. No requirement to pay overdrafts on checks, ACH transactions, or other types of transactions. Paragraph 17(b)(3)—Same Account Terms, Conditions, and Features 1. Variations in terms, conditions, or features. i. Interest rates paid and fees assessed; ii. The type of ATM or debit card provided to the consumer. For instance, an institution may not provide consumers who do not opt in a PIN-only card while providing a debit card with both PIN and signature-debit functionality to consumers who opt in; iii. Minimum balance requirements; or iv. Account features such as on-line bill payment services. 2. Limited-feature bank accounts. Paragraph 17(b)(4)—Exception to the Notice and Opt-In Requirement 17(c) Timing 1. Early compliance. 2. Permitted fees or charges. See also 17(d) Content and Format 1. Overdraft service. 2. Maximum fee. i. Per item or per transaction fees; ii. Daily overdraft fees; iii. Sustained overdraft fees, where fees are assessed when the consumer has not repaid the amount of the overdraft after some period of time (for example, if an account remains overdrawn for five or more business days); or iv. Negative balance fees. 3. Opt-in methods. 4. Identification of consumer's account. See also 5. Alternative plans for covering overdrafts. overdraft protection plans, 17(f) Continuing Right To Opt-In or To Revoke the Opt-In 1. Fees or charges for overdrafts incurred prior to revocation. 17(g) Duration of Opt-In. 1. Termination of overdraft service. § 205.18 Requirements for Financial Institutions Offering Payroll Card Accounts. 18(a) Coverage 1. Issuance of access device. 2. Application to employers and service providers. 18(b) Alternative to Periodic Statements 1. Posted transactions. 2. Electronic history. 18(c) Modified Requirements 1. Error resolution safe harbor provision. 2. Electronic access. 3. Untimely notice of error. Section 205.20—Requirements for Gift Cards and Gift Certificates 20(a) Definitions 1. Form of card, code, or device. see See, however, see, however, 2. Electronic promise. 3. Cards, codes, or other devices redeemable for specific goods or services. See, e.g., 4. Issued primarily for personal, family, or household purposes. But see 5. Examples of cards, codes, or other devices issued for business purposes. i. Cards, codes, or other devices to reimburse employees for travel or moving expenses. ii. Cards, codes, or other devices for employees to use to purchase office supplies and other business-related items. Paragraph 20(a)(2)—Store Gift Card 1. Relationship between “gift certificate” and “store gift card”. 2. Affiliated group of merchants. see, e.g., 3. Mall gift cards. Paragraph 20(a)(3)—General-Use Prepaid Card 1. Redeemable upon presentation at multiple, unaffiliated merchants. 2. Mall gift cards. Paragraph 20(a)(4)—Loyalty, Award, or Promotional Gift Card 1. Examples of loyalty, award, or promotional programs. i. Consumer retention programs operated or administered by a merchant or other person that provide to consumers cards or coupons redeemable for or towards goods or services or other monetary value as a reward for purchases made or for visits to the participating merchant; ii. Sales promotions operated or administered by a merchant or product manufacturer that provide coupons or discounts redeemable for or towards goods or services or other monetary value. iii. Rebate programs operated or administered by a merchant or product manufacturer that provide cards redeemable for or towards goods or services or other monetary value to consumers in connection with the consumer's purchase of a product or service and the consumer's completion of the rebate submission process. iv. Sweepstakes or contests that distribute cards redeemable for or towards goods or services or other monetary value to consumers as an invitation to enter into the promotion for a chance to win a prize. v. Referral programs that provide cards redeemable for or towards goods or services or other monetary value to consumers in exchange for referring other potential consumers to a merchant. vi. Incentive programs through which an employer provides cards redeemable for or towards goods or services or other monetary value to employees, for example, to recognize job performance, such as increased sales, or to encourage employee wellness and safety. vii. Charitable or community relations programs through which a company provides cards redeemable for or towards goods or services or other monetary value to a charity or community group for their fundraising purposes, for example, as a reward for a donation or as a prize in a charitable event. 2. Issued for loyalty, award, or promotional purposes. 3. Reference to toll-free number and Web site. Paragraph 20(a)(6)—Service Fee 1. Service fees. Paragraph 20(a)(7)—Activity 1. Activity. 20(b) Exclusions 1. Application of exclusion. See, however, 2. Eligibility for multiple exclusions. See, however, Paragraph 20(b)(1)—Usable Solely for Telephone Services 1. Examples of excluded products. Paragraph 20(b)(2)—Reloadable and Not Marketed or Labeled as a Gift Card or Gift Certificate 1. Reloadable. 2. Marketed or labeled as a gift card or gift certificate. See, however, 3. Examples of marketed or labeled as a gift card or gift certificate. i. Examples of marketed or labeled as a gift card or gift certificate include A. Using the word “gift” or “present” on a card, certificate, or accompanying material, including documentation, packaging and promotional displays; B. Representing or suggesting that a certificate or card can be given to another person, for example, as a “token of appreciation” or a “stocking stuffer,” or displaying a congratulatory message on the card, certificate or accompanying material; C. Incorporating gift-giving or celebratory imagery or motifs, such as a bow, ribbon, wrapped present, candle, or congratulatory message, on a card, certificate, accompanying documentation, or promotional material; ii. The term does not include A. Representing that a card or certificate can be used as a substitute for a checking, savings, or deposit account; B. Representing that a card or certificate can be used to pay for a consumer's health-related expenses—for example, a card tied to a health savings account; C. Representing that a card or certificate can be used as a substitute for travelers checks or cash; D. Representing that a card or certificate can be used as a budgetary tool, for example, by teenagers, or to cover emergency expenses. 4. Reasonable policies and procedures to avoid marketing as a gift card. i. An issuer or program manager of prepaid cards agrees to sell general-purpose reloadable cards through a retailer. The contract between the issuer or program manager and the retailer establishes the terms and conditions under which the cards may be sold and marketed at the retailer. The terms and conditions prohibit the general-purpose reloadable cards from being marketed as a gift card or gift certificate, and require policies and procedures to regularly monitor or otherwise verify that the cards are not being marketed as such. The issuer or program manager sets up one promotional display at the retailer for gift cards and another physically separated display for excluded products under § 205.20(b), including general-purpose reloadable cards and wireless telephone cards, such that a reasonable consumer would not believe that the excluded cards are gift cards. The exclusion in § 205.20(b)(2) applies because policies and procedures reasonably designed to avoid the marketing of the general-purpose reloadable cards as gift cards or gift certificates are maintained, even if a retail clerk inadvertently stocks or a consumer inadvertently places a general-purpose reloadable card on the gift card display. ii. Same facts as in i., except that the issuer or program manager sets up a single promotional display at the retailer on which a variety of prepaid cards are sold, including store gift cards and general-purpose reloadable cards. A sign stating “Gift Cards” appears prominently at the top of the display. The exclusion in § 205.20(b)(2) does not apply with respect to the general-purpose reloadable cards because policies and procedures reasonably designed to avoid the marketing of excluded cards as gift cards or gift certificates are not maintained. iii. Same facts as in i., except that the issuer or program manager sets up a single promotional multi-sided display at the retailer on which a variety of prepaid card products, including store gift cards and general-purpose reloadable cards are sold. Gift cards are segregated from excluded cards, with gift cards on one side of the display and excluded cards on a different side of a display. Signs of equal prominence at the top of each side of the display clearly differentiate between gift cards and the other types of prepaid cards that are available for sale. The retailer does not use any more conspicuous signage suggesting the general availability of gift cards, such as a large sign stating “Gift Cards” at the top of the display or located near the display. The exclusion in § 205.20(b)(2) applies because policies and procedures reasonably designed to avoid the marketing of the general-purpose reloadable cards as gift cards or gift certificates are maintained, even if a retail clerk inadvertently stocks or a consumer inadvertently places a general-purpose reloadable card on the gift card display. iv. Same facts as in i., except that the retailer sells a variety of prepaid card products, including store gift cards and general-purpose reloadable cards, arranged side-by-side in the same checkout lane. The retailer does not affirmatively indicate or represent that gift cards are available, such as by displaying any signage or other indicia at the checkout lane suggesting the general availability of gift cards. The exclusion in § 205.20(b)(2) applies because policies and procedures reasonably designed to avoid marketing the general-purpose reloadable cards as gift cards or gift certificates are maintained. 5. On-line sales of prepaid cards. 6. Temporary non-reloadable cards issued in connection with a general-purpose reloadable card. Paragraph 20(b)(4)—Not Marketed to the General Public 1. Marketed to the general public. 2. Examples. i. A merchant sells its gift cards at a discount to a business which may give them to employees or loyal consumers as incentives or rewards. In determining whether the gift card falls within the exclusion in § 205.20(b)(4), the merchant must consider whether the card is of a type that is advertised or made available to consumers generally or can be obtained elsewhere. If the card can also be purchased through retail channels, the exclusion in § 205.20(b)(4) does not apply, even if the consumer obtained the card from the business as an incentive or reward. See, however, ii. A national retail chain decides to market its gift cards only to members of its frequent buyer program. Similarly, a bank may decide to sell gift cards only to its customers. If a member of the general public may become a member of the program or a customer of the bank, the card does not fall within the exclusion in § 205.20(b)(4) because the general public has the ability to obtain the cards. See, however, iii. A card issuer advertises a reloadable card to teenagers and their parents promoting the card for use by teenagers for occasional expenses, schoolbooks and emergencies and by parents to monitor spending. Because the card is marketed to and may be sold to any member of the general public, the exclusion in § 205.20(b)(4) does not apply. See, however, iv. An insurance company settles a policyholder's claim and distributes the insurance proceeds to the consumer by means of a prepaid card. Because the prepaid card is simply the means for providing the insurance proceeds to the consumer and the availability of the card is not advertised to the general public, the exclusion in § 205.20(b)(4) applies. v. A merchant provides store credit to a consumer following a merchandise return by issuing a prepaid card that clearly indicates that the card contains funds for store credit. Because the prepaid card is issued for the stated purpose of providing store credit to the consumer and the ability to receive refunds by a prepaid card is not advertised to the general public, the exclusion in § 205.20(b)(4) applies. vi. A tax preparation company elects to distribute tax refunds to its clients by issuing prepaid cards, but does not advertise or otherwise promote the ability to receive proceeds in this manner. Because the prepaid card is simply the mechanism for providing the tax refund to the consumer, and the tax preparer does not advertise the ability to obtain tax refunds by a prepaid card, the exclusion in § 205.20(b)(4) applies. However, if the tax preparer promotes the ability to receive tax refund proceeds through a prepaid card as a way to obtain “faster” access to the proceeds, the exclusion in § 205.20(b)(4) does not apply. Paragraph 20(b)(5)—Issued in Paper Form Only 1. Exclusion explained. 2. Examples. i. A merchant issues a paper gift certificate that entitles the bearer to a specified dollar amount that can be applied towards a future meal. The merchant fills in the certificate with the name of the certificate holder and the amount of the certificate. The certificate falls within the exclusion in § 205.20(b)(5) because it is issued in paper form only. ii. A merchant allows a consumer to prepay for a good or service, such as a car wash or time at a parking meter, and issues a paper receipt bearing a numerical or bar code that the consumer may redeem to obtain the good or service. The exclusion in § 205.20(b)(5) applies because the code is issued in paper form only. iii. A merchant issues a paper certificate or receipt bearing a bar code or certificate number that can later be scanned or entered into the merchant's system and redeemed by the certificate or receipt holder towards the purchase of goods or services. The bar code or certificate number is not issued by the merchant in any form other than paper. The exclusion in § 205.20(b)(5) applies because the bar code or certificate number is issued in paper form only. iv. An on-line merchant electronically provides a bar code, card or certificate number, or certificate or coupon to a consumer that the consumer may print on a home printer and later redeem towards the purchase of goods or services. The exclusion in § 205.20(b)(5) does not apply because the bar code or card or certificate number was issued to the consumer in electronic form, even though it can be reproduced or otherwise printed on paper by the consumer. Paragraph 20(b)(6)—Redeemable Solely for Admission to Events or Venues 1. Exclusion explained. 2. Examples. i. A consumer purchases a prepaid card that entitles the holder to a ticket for entry to an amusement park. The prepaid card may only be used for entry to the park. The card qualifies for the exclusion in § 205.20(b)(6) because it is redeemable for admission or entry and for goods or services in conjunction with that admission. In addition, if the prepaid card does not have a monetary value, and therefore is not “issued in a specified amount,” the card does not meet the definitions of “gift certificate,” “store gift card,” or “general-use prepaid card” in § 205.20(a). See ii. Same facts as in i., except that the gift card also entitles the holder of the gift card to a dollar amount that can be applied towards the purchase of food and beverages or goods or services at the park or at nearby affiliated locations. The card qualifies for the exclusion in § 205.20(b)(6) because it is redeemable for admission or entry and for goods or services in conjunction with that admission. iii. A consumer purchases a $25 gift card that the holder of the gift card can use to make purchases at a merchant, or, alternatively, can apply towards the cost of admission to the merchant's affiliated amusement park. The card is not eligible for the exclusion in § 205.20(b)(6) because it is not redeemable solely for the admission or ticket itself (or for goods and services purchased in conjunction with such admission). The card meets the definition of “store gift card” and is therefore subject to § 205.20, unless a different exclusion applies. 20(c) Form of Disclosures Paragraph 20(c)(1)—Clear and Conspicuous 1. Clear and conspicuous standard. 2. Abbreviations and symbols. Paragraph 20(c)(2)—Format 1. Electronic disclosures. et seq. Paragraph 20(c)(3)—Disclosure Prior to Purchase 1. Method of purchase. 2. Electronic disclosures. 3. Non-physical certificates and cards. See also Paragraph 20(c)(4)—Disclosures on the Certificate or Card 1. Non-physical certificates and cards. 2. No disclosures on a certificate or card. See also 20(d) Prohibition on Imposition of Fees or Charges 1. One-year period. i. A certificate or card is purchased on January 15 of year one. If there has been no activity on the certificate or card since the certificate or card was purchased, a dormancy, inactivity, or service fee may be imposed on the certificate or card on January 15 of year two. ii. Same facts as i., and a fee was imposed on January 15 of year two. Because no more than one dormancy, inactivity, or service fee may be imposed in any given calendar month, the earliest date that another dormancy, inactivity, or service fee may be imposed, assuming there continues to be no activity on the certificate or card, is February 1 of year two. A dormancy, inactivity, or service fee is permitted to be imposed on February 1 of year two because there has been no activity on the certificate or card for the preceding year (February 1 of year one through January 31 of year two), and February is a new calendar month. The imposition of a fee on January 15 of year two is not activity for purposes of § 205.20(d). See iii. Same facts as i., and a fee was imposed on January 15 of year two. On January 31 of year two, the consumer uses the card to make a purchase. Another dormancy, inactivity, or service fee could not be imposed until January 31 of year three, assuming there has been no activity on the certificate or card since January 31 of year two. 2. Relationship between §§ 205.20(d)(2) and (c)(3). 3. Relationship between §§ 205.20(d)(2), (e)(3), and (f)(2). 4. One fee per month. 5. Accumulation of fees. 20(e) Prohibition on Sale of Gift Certificates or Cards With Expiration Dates 1. Reasonable opportunity. i. There are policies and procedures established to prevent the sale of a certificate or card unless the certificate or card expiration date is at least five years after the date the certificate or card was sold or initially issued to a consumer; or ii. A certificate or card is available to consumers to purchase five years and six months before the certificate or card expiration date. 2. Applicability to replacement certificates or cards. purchase 3. Disclosure of funds expiration—date not required. 4. Disclosure not required if no expiration date. 5. Reference to toll-free telephone number and Web site. See, however, 6. Relationship to § 226.20(f)(2). 7. Distinguishing between certificate or card expiration and funds expiration. 8. Expiration date safe harbor. 9. Relationship between §§ 205.20(d)(2), (e)(3), and (f)(2). 10. Replacement or remaining balance of an expired certificate or card. 11. Replacement of a lost or stolen certificate or card not required. 12. Date of issuance or loading. 13. Application of expiration date provisions after redemption of certificate or card. 20(f) Additional Disclosure Requirements for Gift Certificates or Cards 1. Reference to toll-free telephone number and Web site. See, however, 2. Relationship to § 226.20(e)(3)(ii). 3. Relationship between §§ 205.20(d)(2), (e)(3), and (f)(2). 20(g) Compliance Dates 1. Period of eligibility for loyalty, award, or promotional programs. 20(h) Temporary Exemption 20(h)(1)—Delayed Effective Date 1. Application to certificates or cards produced prior to April 1, 2010. 2. Expiration of temporary exemption. 20(h)(2)—Additional Disclosures 1. Disclosures through third parties. 2. General advertising disclosures. Appendix A—Model Disclosure Clauses and Forms 1. Review of forms. 2. Use of forms. 3. Altering the clauses. [Reg. E, 61 FR 19686, May 2, 1996, as amended at 66 FR 13412, Mar. 6, 2001; 66 FR 15192, Mar. 16, 2001; 66 FR 17794, Apr. 4, 2001; 71 FR 1661, Jan. 10, 2006; 71 FR 69437, Dec. 1, 2006; 71 FR 1482, Jan. 10, 2006, 71 FR 51450, Aug. 30, 2006; 72 FR 36593, July 5, 2007; 72 FR 63456, Nov. 9, 2007; 74 FR 59055, Nov. 17, 2009; 75 FR 31671, June 4, 2010; 75 FR 16615, Apr. 1, 2010; 75 FR 50688, Aug. 17, 2010; 75 FR 66649, Oct. 29, 2010]

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