12 CFR Part 1005 — Electronic Fund Transfers (Regulation E)

PART 1005—ELECTRONIC FUND TRANSFERS (REGULATION E) Authority: 12 U.S.C. 5512, 5581; 15 U.S.C. 1693b. Subpart B is also issued under 12 U.S.C. 5601 and 15 U.S.C. 1693o-1. Source: 76 FR 81023, Dec. 27, 2011, unless otherwise noted. Subpart A—General § 1005.1 Authority and purpose. (a) Authority. et seq. et seq. (b) Purpose. [76 FR 81023, Dec. 27, 2011, as amended at 77 FR 6285, Feb. 7, 2012] § 1005.2 Definitions. Except as otherwise provided in subpart B, for purposes of this part, the following definitions apply: (a)(1) “Access device” means a card, code, or other means of access to a consumer's account, or any combination thereof, that may be used by the consumer to initiate electronic fund transfers. (2) An access device becomes an “accepted access device” when the consumer: (i) Requests and receives, or signs, or uses (or authorizes another to use) the access device to transfer money between accounts or to obtain money, property, or services; (ii) Requests validation of an access device issued on an unsolicited basis; or (iii) Receives an access device in renewal of, or in substitution for, an accepted access device from either the financial institution that initially issued the device or a successor. (b)(1) “Account” means a demand deposit (checking), savings, or other consumer asset account (other than an occasional or incidental credit balance in a credit plan) held directly or indirectly by a financial institution and established primarily for personal, family, or household purposes. (2) The term does not include an account held by a financial institution under a bona fide trust agreement. (3) The term includes a prepaid account. (i) “Prepaid account” means: (A) 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; or (B) A “government benefit account,” as defined in § 1005.15(a)(2); or (C) An account that is marketed or labeled as “prepaid” and that is redeemable upon presentation at multiple, unaffiliated merchants for goods or services or usable at automated teller machines; or (D) An account: ( 1 ( 2 ( 3 (ii) For purposes of paragraphs (b)(3)(i)(C) and (D) of this section, the term “prepaid account” does not include: (A) An account that is loaded only with funds from a health savings account, flexible spending arrangement, medical savings account, health reimbursement arrangement, dependent care assistance program, or transit or parking reimbursement arrangement; (B) An account that is directly or indirectly established through a third party and loaded only with qualified disaster relief payments; (C) The person-to-person functionality of an account established by or through the United States government whose primary function is to conduct closed-loop transactions on U.S. military installations or vessels, or similar government facilities; (D)( 1 ( 2 ( 3 ( 4 (E) An account established for distributing needs-tested benefits in a program established under state or local law or administered by a state or local agency, as set forth in § 1005.15(a)(2). (c) “Act” means the Electronic Fund Transfer Act (Title IX of the Consumer Credit Protection Act, 15 U.S.C. 1693 et seq. (d) “Business day” means any day on which the offices of the consumer's financial institution are open to the public for carrying on substantially all business functions. (e) “Consumer” means a natural person. (f) “Credit” means the right granted by a financial institution to a consumer to defer payment of debt, incur debt and defer its payment, or purchase property or services and defer payment therefor. (g) “Electronic fund transfer” is defined in § 1005.3. (h) “Electronic terminal” means an electronic device, other than a telephone operated by a consumer, through which a consumer may initiate an electronic fund transfer. The term includes, but is not limited to, point-of-sale terminals, automated teller machines (ATMs), and cash dispensing machines. (i) “Financial institution” means a bank, savings association, credit union, or any other person that directly or indirectly holds an account belonging to a consumer, or that issues an access device and agrees with a consumer to provide electronic fund transfer services, other than a person excluded from coverage of this part by section 1029 of the Consumer Financial Protection Act of 2010, title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act, Public Law 111-203, 124 Stat. 1376. (j) “Person” means a natural person or an organization, including a corporation, government agency, estate, trust, partnership, proprietorship, cooperative, or association. (k) “Preauthorized electronic fund transfer” means an electronic fund transfer authorized in advance to recur at substantially regular intervals. (l) “State” means any state, territory, or possession of the United States; the District of Columbia; the Commonwealth of Puerto Rico; or any political subdivision of the thereof in this paragraph (l). (m) “Unauthorized electronic fund transfer” means an electronic fund transfer from a consumer's account initiated by a person other than the consumer without actual authority to initiate the transfer and from which the consumer receives no benefit. The term does not include an electronic fund transfer initiated: (1) By a person who was furnished the access device to the consumer's account by the consumer, unless the consumer has notified the financial institution that transfers by that person are no longer authorized; (2) With fraudulent intent by the consumer or any person acting in concert with the consumer; or (3) By the financial institution or its employee. [76 FR 81023, Dec. 27, 2011, as amended at 77 FR 6285, Feb. 7, 2012; 81 FR 84325, Nov. 22, 2016; 83 FR 6417, Feb. 13, 2018] § 1005.3 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 electronic fund transfer, and obtain a consumer's authorization for each transfer. A consumer authorizes a one-time electronic fund transfer (in providing a check to a merchant or other payee for the MICR encoding, that is, the routing number of the financial institution, the consumer's account number and the serial number) when the consumer receives notice and goes forward with the underlying transaction. For point-of-sale transfers, the notice must be posted in a prominent and conspicuous location, and a copy thereof, or a substantially similar notice, must be provided to the consumer at the time of the transaction. (iii) A person may provide notices that are substantially similar to those set forth in appendix A-6 to comply with the requirements of this paragraph (b)(2). (3) Collection of returned item fees via electronic fund transfer General. (ii) Point-of-sale transactions. (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 § 1005.10(e) regarding compulsory use and sections 916 and 917 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. [76 FR 81023, Dec. 27, 2011, as amended at 77 FR 6285, Feb. 7, 2012] § 1005.4 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. § 1005.5 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 § 1005.7, of the consumer's rights and liabilities that will apply if the access device is validated; and (4) Validated only in response to the consumer's oral or written request for validation, after the institution has verified the consumer's identity by a reasonable means. § 1005.6 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. § 1005.7 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. [76 FR 81023, Dec. 27, 2011, as amended at 81 FR 70320, Oct. 12, 2016] § 1005.8 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. § 1005.9 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. (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 (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 § 1005.11. (e) Exception for receipts in small-value transfers. § 1005.10 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. [76 FR 81023, Dec. 27, 2011, as amended at 81 FR 84326, Nov. 22, 2016; 89 FR 106836, Dec. 30, 2024] § 1005.11 Procedures for resolving errors. (a) Definition of error Types of transfers or inquiries covered. (i) An unauthorized electronic fund transfer; (ii) An incorrect electronic fund transfer to or from the consumer's account; (iii) The omission of an electronic fund transfer from a periodic statement; (iv) A computational or bookkeeping error made by the financial institution relating to an electronic fund transfer; (v) The consumer's receipt of an incorrect amount of money from an electronic terminal; (vi) An electronic fund transfer not identified in accordance with § 1005.9 or § 1005.10(a); or (vii) The consumer's request for documentation required by § 1005.9 or § 1005.10(a) or for additional information or clarification concerning an electronic fund transfer, including a request the consumer makes to determine whether an error exists under paragraphs (a)(1)(i) through (vi) of this section. (2) Types of inquiries not covered. (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 § 1005.9, on which the alleged error is first reflected; (ii) Enables the institution to identify the consumer's name and account number; and (iii) Indicates why the consumer believes an error exists and includes to the extent possible the type, date, and amount of the error, except for requests described in paragraph (a)(1)(vii) of this section. (2) Written confirmation. (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 § 1005.6(a), the institution may withhold a maximum of $50 from the amount credited. An institution need not provisionally credit the consumer's account if: (A) The institution requires but does not receive written confirmation within 10 business days of an oral notice of error; or (B) The alleged error involves an account that is subject to Regulation T of the Board of Governors of the Federal Reserve System (Securities Credit by Brokers and Dealers, 12 CFR part 220). (ii) Informs the consumer, within two business days after the provisional crediting, of the amount and date of the provisional crediting and gives the consumer full use of the funds during the investigation; (iii) Corrects the error, if any, within one business day after determining that an error occurred; and (iv) Reports the results to the consumer within three business days after completing its investigation (including, if applicable, notice that a provisional credit has been made final). (3) Extension of time periods. (i) The applicable time is 20 business days in place of 10 business days under paragraphs (c)(1) and (2) of this section if the notice of error involves an electronic fund transfer to or from the account within 30 days after the first deposit to the account was made. (ii) The applicable time is 90 days in place of 45 days under paragraph (c)(2) of this section, for completing an investigation, if a notice of error involves an electronic fund transfer that: (A) Was not initiated within a state; (B) Resulted from a point-of-sale debit card transaction; or (C) Occurred within 30 days after the first deposit to the account was made. (4) Investigation. (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. [76 FR 81023, Dec. 27, 2011, as amended at 81 FR 84326, Nov. 22, 2016; 83 FR 6417, Feb. 13, 2018] § 1005.12 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 1026.12, comment 12-2), of the capability to initiate electronic fund transfers; (ii) The issuance of an access device (other than an access device for a prepaid account) that permits credit extensions (under a preexisting agreement between a consumer and a financial institution) only when the consumer's account is overdrawn or to maintain a specified minimum balance in the consumer's account, or under an overdraft service, as defined in § 1005.17(a) of this part; (iii) The addition of an overdraft service, as defined in § 1005.17(a), to an accepted access device; and (iv) A consumer's liability for an unauthorized electronic fund transfer and the investigation of errors involving: (A) Except with respect to a prepaid account, an extension of credit that is incident to an electronic fund transfer that occurs under an agreement between the consumer and a financial institution to extend credit when the consumer's account is overdrawn or to maintain a specified minimum balance in the consumer's account, or under an overdraft service, as defined in § 1005.17(a); (B) With respect to transactions that involve a covered separate credit feature and an asset feature on a prepaid account that are both accessible by a hybrid prepaid-credit card as those terms are defined in Regulation Z, 12 CFR 1026.61, an extension of credit that is incident to an electronic fund transfer that occurs when the hybrid prepaid-credit card accesses both funds in the asset feature of the prepaid account and a credit extension from the credit feature with respect to a particular transaction; (C) Transactions that involves credit extended through a negative balance to the asset feature of a prepaid account that meets the conditions set forth in Regulation Z, 12 CFR 1026.61(a)(4); and (D) With respect to transactions involving a prepaid account and a non-covered separate credit feature as defined in Regulation Z, 12 CFR 1026.61, transactions that access the prepaid account, as applicable. (2) The Truth in Lending Act and Regulation Z (12 CFR part 1026), which prohibit the unsolicited issuance of credit cards, govern: (i) The addition of a credit feature or plan to an accepted access device, including an access device for a prepaid account, that would make the access device into a credit card under Regulation Z (12 CFR part 1026); (ii) Except as provided in paragraph (a)(1)(ii) of this section, the issuance of a credit card that is also an access device; and (iii) With respect to transactions involving a prepaid account and a non-covered separate credit feature as defined in Regulation Z, 12 CFR 1026.61, a consumer's liability for unauthorized use and the investigation of errors involving transactions that access the non-covered separate credit feature, as applicable. (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 § 1005.11(c)(2)(i) of this part; or (iv) Requires initial disclosures, periodic statements, or receipts that are different in content from those required by the Federal law except to the extent that the disclosures relate to consumer rights granted by the state law and not by the Federal law. (c) State exemptions 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 916 of the Act; and (ii) When the Bureau grants an exemption, the state law requirements shall constitute the requirements of the Federal law for purposes of section 916 of the Act, except for state law requirements not imposed by the Federal law. [76 FR 81023, Dec. 27, 2011, as amended at 81 FR 84326, Nov. 22, 2016] § 1005.13 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, 916, or 917(a) of the Act, shall retain the records that pertain to the investigation, action, or proceeding until final disposition of the matter unless an earlier time is allowed by court or agency order. § 1005.14 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 § 1005.9(a), the address and telephone number to be used for an inquiry, to give notice of an error, or to report the loss or theft of the debit card; (iv) The service provider transmits to the account-holding institution the information specified in § 1005.9(b)(1), in the format prescribed by the automated clearinghouse (ACH) system used to clear the fund transfers; (v) The service provider extends the time period for notice of loss or theft of a debit card, set forth in § 1005.6(b)(1) and (2), from two business days to four business days after the consumer learns of the loss or theft; and extends the time periods for reporting unauthorized transfers or errors, set forth in §§ 1005.6(b)(3) and 1005.11(b)(1)(i), from 60 days to 90 days following the transmittal of a periodic statement by the account-holding institution. (2) Error resolution. (ii) The service provider shall disclose to the consumer the date on which it initiates a transfer to effect a provisional credit in accordance with § 1005.11(c)(2)(ii). (iii) If the service provider determines an error occurred, it shall transfer funds to or from the consumer's account, in the appropriate amount and within the applicable time period, in accordance with § 1005.11(c)(2)(i). (iv) If funds were provisionally credited and the service provider determines no error occurred, it may reverse the credit. The service provider shall notify the account-holding institution of the period during which the account-holding institution must honor debits to the account in accordance with § 1005.11(d)(2)(ii). If an overdraft results, the service provider shall promptly reimburse the account-holding institution in the amount of the overdraft. (c) Compliance by account-holding institution. (1) Documentation. (2) Error resolution. § 1005.15 Electronic fund transfer of government benefits. (a) Government agency subject to regulation. (2) For purposes of this section, the term “account” or “government benefit account” means an account established by a government agency for distributing government benefits to a consumer electronically, such as through automated teller machines or point-of-sale terminals, but does not include an account for distributing needs-tested benefits in a program established under state or local law or administered by a state or local agency. (b) Issuance of access devices. (c) Pre-acquisition disclosure requirements. (2) Additional content for government benefit accounts Statement regarding consumer's payment options. (ii) Statement regarding state-required information or other fee discounts and waivers. (3) Form of disclosures. (d) Access to account information Periodic statement alternative. (i) 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); (ii) An electronic history of the consumer's account transactions, such as through a Web site, that covers at least 12 months 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 24 months preceding the date the agency receives the consumer's request. (2) Additional access to account information requirements. (e) Modified disclosure, limitations on liability, and error resolution requirements. (1) Initial disclosures. (i) Access to account information. (ii) Error resolution. (2) Annual error resolution notice. (3) Modified limitations on liability requirements. (A) The date the consumer electronically accesses the consumer's account under paragraph (d)(1)(ii) of this section, provided that the electronic history made available to the consumer reflects the unauthorized transfer; or (B) The date the agency sends a written history of the consumer's account transactions requested by the consumer under paragraph (d)(1)(iii) of this section in which the unauthorized transfer is first reflected. (ii) An agency may comply with paragraph (e)(3)(i) of this section by limiting the consumer's liability for an unauthorized transfer as provided under § 1005.6(b)(3) for any transfer reported by the consumer within 120 days after the transfer was credited or debited to the consumer's account. (4) Modified error resolution requirements. (A) Sixty days after the date the consumer electronically accesses the consumer's account under paragraph (d)(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 agency sends a written history of the consumer's account transactions requested by the consumer under paragraph (d)(1)(iii) of this section in which the alleged error is first reflected. (ii) In lieu of following the procedures in paragraph (e)(4)(i) of this section, an agency complies with the requirements for resolving errors in § 1005.11 if it investigates any oral or written notice of an error from the consumer that is received by the agency within 120 days after the transfer allegedly in error was credited or debited to the consumer's account. (f) Disclosure of fees and other information. (g) Government benefit accounts accessible by hybrid prepaid-credit cards. [81 FR 84326, Nov. 22, 2016] § 1005.16 Disclosures at automated teller machines. (a) Definition. (b) General. (c) Notice requirement. (d) Imposition of fee. (1) The consumer is provided the notice required under paragraph (c) of this section, and (2) The consumer elects to continue the transaction or inquiry after receiving such notice. [76 FR 81023, Dec. 27, 2011, as amended at 78 FR 18224, Mar. 26, 2013] § 1005.17 Requirements for overdraft services. (a) Definition. (1) A line of credit subject to Regulation Z (12 CFR part 1026), including transfers from a credit card account, home equity line of credit, or overdraft line of credit; (2) A service that transfers funds from another account held individually or jointly by a consumer, such as a savings account; (3) A line of credit or other transaction exempt from Regulation Z (12 CFR part 1026) pursuant to 12 CFR 1026.3(d); or (4) A covered separate credit feature accessible by a hybrid prepaid-credit card as defined in Regulation Z, 12 CFR 1026.61; or credit extended through a negative balance on the asset feature of the prepaid account that meets the conditions of 12 CFR 1026.61(a)(4). (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. [76 FR 81023, Dec. 27, 2011, as amended at 81 FR 84328, Nov. 22, 2016] § 1005.18 Requirements for financial institutions offering prepaid accounts. (a) Coverage. (b) Pre-acquisition disclosure requirements Timing of disclosures General. (ii) Disclosures for prepaid accounts acquired in retail locations. (A) The prepaid account access device is contained inside the packaging material. (B) The disclosure required by paragraph (b)(2) of this section is provided on or are visible through an outward-facing, external surface of a prepaid account access device's packaging material. (C) The disclosure required by paragraph (b)(2) of this section includes the information set forth in paragraph (b)(2)(xiii) of this section that allows a consumer to access the information required to be disclosed by paragraph (b)(4) of this section by telephone and via a website. (D) The long form disclosure required by paragraph (b)(4) of this section is provided after the consumer acquires the prepaid account. If a financial institution does not provide the long form disclosure inside the prepaid account packaging material, and it is not otherwise already mailing or delivering to the consumer written account-related communications within 30 days of obtaining the consumer's contact information, it may provide the long form disclosure pursuant to this paragraph in electronic form without regard to the consumer notice and consent requirements of section 101(c) of the Electronic Signatures in Global and National Commerce Act (E-Sign Act) (15 U.S.C. 7001 et seq. (iii) Disclosures for prepaid accounts acquired orally by telephone. (A) The financial institution communicates to the consumer orally, before the consumer acquires the prepaid account, that the information required to be disclosed by paragraph (b)(4) of this section is available both by telephone and on a Web site. (B) The financial institution makes the information required to be disclosed by paragraph (b)(4) of this section available both by telephone and on a Web site. (C) The long form disclosure required by paragraph (b)(4) of this section is provided after the consumer acquires the prepaid account. (2) Short form disclosure content. (i) Periodic fee. (ii) Per purchase fee. (iii) ATM withdrawal fees. (iv) Cash reload fee. (v) ATM balance inquiry fees. (vi) Customer service fees. 2 (vii) Inactivity fee. (viii) Statements regarding additional fee types Statement regarding number of additional fee types charged. ( 1 ( 2 (B) Statement directing consumers to disclosure of additional fee types. (ix) Disclosure of additional fee types Determination of which additional fee types to disclose. ( 1 ( 2 ( 3 (B) Disclosure of fewer than two additional fee types. (C) Fee variations in additional fee types. 2 1 2 1 (D) Timing of initial assessment of additional fee types disclosure 1 Existing prepaid account programs as of April 1, 2019. ( 2 Existing prepaid account programs as of April 1, 2019 with unavailable data. ( 3 New prepaid account programs created on or after April 1, 2019. (E) Timing of periodic reassessment and update of additional fee types disclosure 1 General. 2 3 ( 2 Periodic reassessment. 4 ( 3 Fee schedule change. 4 4 ( 4 Update printing exception. 2 3 (x) Statement regarding overdraft credit features. (xi) Statement regarding registration and FDIC or NCUA insurance. (A) Account is insurance eligible and does not have pre-acquisition consumer identification/verification. (B) Account is not insurance eligible and does not have pre-acquisition consumer identification/verification. (C) Account is insurance eligible and has pre-acquisition consumer identification/verification. (D) Account is not insurance eligible and has pre-acquisition consumer identification/verification. (E) No consumer identification/verification. (xii) Statement regarding CFPB Web site. cfpb.gov/prepaid cfpb.gov/prepaid (xiii) Statement regarding information on all fees and services. (xiv) Additional content for payroll card accounts Statement regarding wage or salary payment options. (B) Statement regarding state-required information or other fee discounts and waivers. (3) Short form disclosure of variable fees and third-party fees and prohibition on disclosure of finance charges General disclosure of variable fees. (ii) Disclosure of variable periodic fee. (iii) Single disclosure for like fees. (iv) Third-party fees in general. (v) Third-party cash reload fees. (vi) Prohibition on disclosure of finance charges. (4) Long form disclosure content. (i) Title for long form disclosure. (ii) Fees. (iii) Statement regarding registration and FDIC or NCUA insurance. (iv) Statement regarding overdraft credit features. (v) Statement regarding financial institution contact information. (vi) Statement regarding CFPB Web site and telephone number. cfpb.gov/prepaid cfpb.gov/complaint cfpb.gov/prepaid cfpb.gov/complaint (vii) Regulation Z disclosures for overdraft credit features. (5) Disclosure requirements outside the short form disclosure. (6) Form of pre-acquisition disclosures General Written disclosures. (B) Electronic disclosures. et seq. (C) Oral disclosures. (ii) Retainable form. (iii) Tabular format General. (B) Multiple service plans 1 Short form disclosure for default service plan. ( 2 Short form disclosure for multiple service plans. 1 ( 3 Long form disclosure. (7) Specific formatting requirements for pre-acquisition disclosures Grouping Short form disclosure. (B) Long form disclosure. (C) Multiple service plan disclosure. 2 (ii) Prominence and size General. (B) Short form disclosure 1 Fees and other information. ( 2 Variable fees. ( 3 Payroll card account additional content. (C) Long form disclosure. (D) Multiple service plan short form disclosure. 2 (iii) Segregation. (8) Terminology of pre-acquisition disclosures. (9) Prepaid accounts acquired in foreign languages General. (A) The financial institution principally uses a foreign language on the prepaid account packaging material; (B) The financial institution principally uses a foreign language to advertise, solicit, or market a prepaid account and provides a means in the advertisement, solicitation, or marketing material that the consumer uses to acquire the prepaid account by telephone or electronically; or (C) The financial institution provides a means for the consumer to acquire a prepaid account by telephone or electronically principally in a foreign language. However, foreign language pre-acquisition disclosures are not required for payroll card accounts and government benefit accounts where the foreign language is offered by telephone via a real-time language interpretation service provided by a third party or by the employer or government agency on an informal or ad hoc basis as an accommodation to prospective payroll card account or government benefit account holders. (ii) Long form disclosures in English upon request. (c) Access to prepaid account information Periodic statement alternative. (i) The consumer's account balance, through a readily available telephone line; (ii) An electronic history of the consumer's account transactions, such as through a Web site, that covers at least 12 months 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 24 months preceding the date the financial institution receives the consumer's request. (2) Periodic statement alternative for unverified prepaid accounts. (3) Information included on electronic or written histories. (4) Inclusion of all fees charged. (5) Summary totals of fees. (d) Modified disclosure requirements. (1) Initial disclosures. (i) Access to account information. (ii) Error resolution. (2) Annual error resolution notice. (e) Modified limitations on liability and error resolution requirements Modified limitations on liability requirements. (i) For purposes of § 1005.6(b)(3), the 60-day period for reporting any unauthorized transfer shall begin on the earlier of: (A) The date the consumer electronically accesses the consumer's account under paragraph (c)(1)(ii) of this section, provided that the electronic account transaction history made available to the consumer reflects the unauthorized transfer; or (B) The date the financial institution sends a written history of the consumer's account transactions requested by the consumer under paragraph (c)(1)(iii) of this section in which the unauthorized transfer is first reflected. (ii) A financial institution may comply with paragraph (e)(1)(i) of this section by limiting the consumer's liability for an unauthorized transfer as provided under § 1005.6(b)(3) for any transfer reported by the consumer within 120 days after the transfer was credited or debited to the consumer's account. (2) Modified error resolution requirements. (i) The financial institution shall comply with the requirements of § 1005.11 in response to an oral or written notice of an error from the consumer that is received by the earlier of: (A) Sixty days after the date the consumer electronically accesses the consumer's account under paragraph (c)(1)(ii) of this section, provided that the electronic account transaction 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 (c)(1)(iii) of this section in which the alleged error is first reflected. (ii) In lieu of following the procedures in paragraph (e)(2)(i) of this section, a financial institution complies with the requirements for resolving errors in § 1005.11 if it investigates any oral or written notice of an error from the consumer that is received by the institution within 120 days after the transfer allegedly in error was credited or debited to the consumer's account. (3) Limitations on liability and error resolution for unverified accounts. (ii) For purposes of paragraph (e)(3)(i) of this section, a financial institution has not successfully completed its consumer identification and verification process where: (A) The financial institution has not concluded its consumer identification and verification process with respect to a particular prepaid account, provided that it has disclosed to the consumer the risks of not registering and verifying the account using a notice that is substantially similar to the model notice contained in paragraph (c) of appendix A-7 of this part. (B) The financial institution has concluded its consumer identification and verification process with respect to a particular prepaid account, but could not verify the identity of the consumer, provided that it has disclosed to the consumer the risks of not registering and verifying the account using a notice that is substantially similar to the model notice contained in paragraph (c) of appendix A-7 of this part; or (C) The financial institution does not have a consumer identification and verification process for the prepaid account program, provided that it has made the alternative disclosure described in paragraph (d)(1)(ii) of this section and complies with the process it has disclosed. (iii) Resolution of errors following successful verification. (f) Disclosure of fees and other information Initial disclosure of fees and other information. (2) Change-in-terms notice. (3) Disclosures on prepaid account access devices. (g) Prepaid accounts accessible by hybrid prepaid-credit cards In general. (2) Exception for higher fees or charges. (h) Effective date and special transition rules for disclosure provisions Effective date generally. (2) Early disclosures Exception for disclosures on existing prepaid account access devices and prepaid account packaging materials. (ii) Disclosures for prepaid accounts acquired on or after April 1, 2019. (A) Notices of certain changes. (B) Initial disclosures. (iii) Disclosures for prepaid accounts acquired before April 1, 2019. (iv) Method of providing notice to consumers. et seq. (3) Account information not available on April 1, 2019 Electronic and written account transaction history. (ii) Summary totals of fees. [81 FR 84328, Nov. 22, 2016, as amended at 82 FR 18980, Apr. 25, 2017; 83 FR 6417, Feb. 13, 2018] § 1005.19 Internet posting of prepaid account agreements. (a) Definitions Agreement. (2) Amends. (3) Fee information. (4) Issuer. (5) Offers. (6) Offers to the general public. (7) Open account. (8) Prepaid account. (b) Submission of agreements to the Bureau Submissions on a rolling basis. (i) Identifying information about the issuer and the agreements submitted, including the issuer's name, address, and identifying number (such as an RSSD ID number or tax identification number), the effective date of the prepaid account agreement, the name of the program manager, if any, and the list of names of other relevant parties, if applicable (such as the employer for a payroll card program or the agency for a government benefit program); (ii) Any prepaid account agreement offered by the issuer that has not been previously submitted to the Bureau; (iii) Any prepaid account agreement previously submitted to the Bureau that has been amended, as described in paragraph (b)(2)(i) of this section; and (iv) Notification regarding any prepaid account agreement previously submitted to the Bureau that the issuer is withdrawing, as described in paragraphs (b)(3), (b)(4)(ii), and (b)(5)(ii) of this section. (2) Amended agreements Submission of amended agreements generally. (ii) Submission of updated list of names of other relevant parties. (A) Such time as the issuer is otherwise submitting an amended agreement or changes to other identifying information about the issuer and its submitted agreements pursuant to paragraph (b)(1)(i) of this section; or (B) May 1 of each year, for any updates to the list of names of other relevant parties for that agreement that occurred between the issuer's last submission of relevant party information and April 1 of that year. (3) Withdrawal of agreements no longer offered. (4) De minimis exception. (ii) If an issuer that did not previously qualify for the de minimis exception newly qualifies for the de minimis exception, the issuer must continue to make submissions to the Bureau on a rolling basis until the issuer notifies the Bureau that the issuer is withdrawing all agreements it previously submitted to the Bureau. (5) Product testing exception. (A) Is offered as part of a product test offered to only a limited group of consumers for a limited period of time; (B) Is used for fewer than 3,000 open prepaid accounts; and (C) Is not offered other than in connection with such a product test. (ii) If an agreement that did not previously qualify for the product testing exception newly qualifies for the exception, the issuer must continue to make submissions to the Bureau on a rolling basis with respect to that agreement until the issuer notifies the Bureau that the issuer is withdrawing the agreement. (6) Form and content of agreements submitted to the Bureau Form and content generally. (B) Agreements must not include any personally identifiable information relating to any consumer, such as name, address, telephone number, or account number. (C) The following are not deemed to be part of the agreement for purposes of this section, and therefore are not required to be included in submissions to the Bureau: ( 1 ( 2 ( 3 ( 4 (D) Agreements must be presented in a clear and legible font. (ii) Fee information. (iii) Integrated agreement. (c) Posting of agreements offered to the general public. (2) Agreements posted pursuant to this paragraph (c) must conform to the form and content requirements for agreements submitted to the Bureau set forth in paragraph (b)(6) of this section. (3) The issuer must post and update the agreements posted on its Web site pursuant to this paragraph (c) as frequently as the issuer is required to submit new or amended agreements to the Bureau pursuant to paragraph (b)(2)(i) of this section. (4) Agreements posted pursuant to this paragraph (c) may be posted in any electronic format that is readily usable by the general public. Agreements must be placed in a location that is prominent and readily accessible to the public and must be accessible without submission of personally identifiable information. (d) Agreements for all open accounts Availability of an individual consumer's prepaid account agreement. (i) Post and maintain the consumer's agreement on its Web site; or (ii) Promptly provide a copy of the consumer's agreement to the consumer upon the consumer's request. If the issuer makes an agreement available upon request, the issuer must provide the consumer with the ability to request a copy of the agreement by telephone. The issuer must send to the consumer a copy of the consumer's prepaid account agreement no later than five business days after the issuer receives the consumer's request. (2) Form and content of agreements. (ii) If the issuer posts an agreement on its Web site under paragraph (d)(1)(i) of this section, the agreement may be posted in any electronic format that is readily usable by the general public and must be placed in a location that is prominent and readily accessible to the consumer. (iii) Agreements posted or otherwise provided pursuant to this paragraph (d) may contain personally identifiable information relating to the consumer, such as name, address, telephone number, or account number, provided that the issuer takes appropriate measures to make the agreement accessible only to the consumer or other authorized persons. (iv) Agreements posted or otherwise provided pursuant to this paragraph (d) must set forth the specific provisions and fee information applicable to the particular consumer. (v) Agreements posted pursuant to paragraph (d)(1)(i) of this section must be updated as frequently as the issuer is required to submit amended agreements to the Bureau pursuant to paragraph (b)(2)(i) of this section. Agreements provided upon consumer request pursuant to paragraph (d)(1)(ii) of this section must be accurate as of the date the agreement is sent to the consumer. (vi) Agreements provided upon consumer request pursuant to paragraph (d)(1)(ii) of this section must be provided by the issuer in paper form, unless the consumer agrees to receive the agreement electronically. (e) E-Sign Act requirements. et seq. (f) Initial submission date. [81 FR 84336, Nov. 22, 2016, as amended at 83 FR 6419, Feb. 13, 2018] § 1005.20 Requirements for gift cards and gift certificates. (a) Definitions. (1) “Gift certificate” means a card, code, or other device that is: (i) Issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in a specified amount that may not be increased or reloaded in exchange for payment; and (ii) Redeemable upon presentation at a single merchant or an affiliated group of merchants for goods or services. (2) “Store gift card” means a card, code, or other device that is: (i) Issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in a specified amount, whether or not that amount may be increased or reloaded, in exchange for payment; and (ii) Redeemable upon presentation at a single merchant or an affiliated group of merchants for goods or services. (3) “General-use prepaid card” means a card, code, or other device that is: (i) Issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in a specified amount, whether or not that amount may be increased or reloaded, in exchange for payment; and (ii) Redeemable upon presentation at multiple, unaffiliated merchants for goods or services, or usable at automated teller machines. (4) “Loyalty, award, or promotional gift card” means a card, code, or other device that: (i) Is issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in connection with a loyalty, award, or promotional program; (ii) Is redeemable upon presentation at one or more merchants for goods or services, or usable at automated teller machines; and (iii) Sets forth the following disclosures, as applicable: (A) A statement indicating that the card, code, or other device is issued for loyalty, award, or promotional purposes, which must be included on the front of the card, code, or other device; (B) The expiration date for the underlying funds, which must be included on the front of the card, code, or other device; (C) The amount of any fees that may be imposed in connection with the card, code, or other device, and the conditions under which they may be imposed, which must be provided on or with the card, code, or other device; and (D) A toll-free telephone number and, if one is maintained, a Web site, that a consumer may use to obtain fee information, which must be included on the card, code, or other device. (5) Dormancy or inactivity fee. (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, either at the event or venue or at specific locations affiliated with and in geographic proximity to the event or venue. (c) Form of disclosures 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 mandatory compliance 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 916 of the 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. Subpart B—Requirements for Remittance Transfers Source: 77 FR 6285, Feb. 7, 2012, unless otherwise noted. § 1005.30 Remittance transfer definitions. Except as otherwise provided, for purposes of this subpart, the following definitions apply: (a) “Agent” means an agent, authorized delegate, or person affiliated with a remittance transfer provider, as defined under State or other applicable law, when such agent, authorized delegate, or affiliate acts for that remittance transfer provider. (b) “Business day” means any day on which the offices of a remittance transfer provider are open to the public for carrying on substantially all business functions. (c) “Designated recipient” means any person specified by the sender as the authorized recipient of a remittance transfer to be received at a location in a foreign country. (d) “Preauthorized remittance transfer” means a remittance transfer authorized in advance to recur at substantially regular intervals. (e) Remittance transfer General definition. (2) Exclusions from coverage. (i) Small value transactions. (ii) Securities and commodities transfers. (f) Remittance transfer provider General definition. (2) Normal course of business Safe harbor. (A) Provided 500 or fewer remittance transfers in the previous calendar year; and (B) Provides 500 or fewer remittance transfers in the current calendar year. (ii) Transition period—coming into compliance. (iii) Transition period—qualifying for the safe harbor. (g) “Sender” means a consumer in a State who primarily for personal, family, or household purposes requests a remittance transfer provider to send a remittance transfer to a designated recipient. (h) Third-party fees. (2) “Non-covered third-party fees.” The term “non-covered third-party fees” means any fees imposed by the designated recipient's institution for receiving a remittance transfer into an account except if the institution acts as an agent of the remittance transfer provider. [77 FR 6285, Feb. 7, 2012, as amended at 77 FR 50282, Aug. 20, 2012; 78 FR 30703, May 22, 2013; 85 FR 34904, June 5, 2020] § 1005.31 Disclosures. (a) General form of disclosures Clear and conspicuous. (2) Written and electronic disclosures. (3) Disclosures for oral telephone transactions. (i) The transaction is conducted orally and entirely by telephone; (ii) The remittance transfer provider complies with the requirements of paragraph (g)(2) of this section; (iii) The provider discloses orally a statement about the rights of the sender regarding cancellation required by paragraph (b)(2)(iv) of this section pursuant to the timing requirements in paragraph (e)(1) of this section; and (iv) The provider discloses orally, as each is applicable, the information required by paragraph (b)(2)(vii) of this section and the information required by § 1005.36(d)(1)(i)(A), with respect to transfers subject to § 1005.36(d)(2)(ii), pursuant to the timing requirements in paragraph (e)(1) of this section. (4) Oral disclosures for certain error resolution notices. (i) The remittance transfer provider determines that an error occurred as described by the sender; and (ii) The remittance transfer provider complies with the requirements of paragraph (g)(2) of this section. (5) Disclosures for mobile application or text message transactions. (i) The transaction is conducted entirely by telephone via mobile application or text message; (ii) The remittance transfer provider complies with the requirements of paragraph (g)(2) of this section; (iii) The provider discloses orally or via mobile application or text message a statement about the rights of the sender regarding cancellation required by paragraph (b)(2)(iv) of this section pursuant to the timing requirements in paragraph (e)(1) of this section; and (iv) The provider discloses orally or via mobile application or text message, as each is applicable, the information required by paragraph (b)(2)(vii) of this section and the information required by § 1005.36(d)(1)(i)(A), with respect to transfers subject to § 1005.36(d)(2)(ii), pursuant to the timing requirements in paragraph (e)(1) of this section. (b) Disclosure requirements Pre-payment disclosure. (i) The amount that will be transferred to the designated recipient, in the currency in which the remittance transfer is funded, using the term “Transfer Amount” or a substantially similar term; (ii) Any fees imposed and any taxes collected on the remittance transfer by the provider, in the currency in which the remittance transfer is funded, using the terms “Transfer Fees” for fees and “Transfer Taxes” for taxes, or substantially similar terms; (iii) The total amount of the transaction, which is the sum of paragraphs (b)(1)(i) and (ii) of this section, in the currency in which the remittance transfer is funded, using the term “Total” or a substantially similar term; (iv) The exchange rate used by the provider for the remittance transfer, rounded consistently for each currency to no fewer than two decimal places and no more than four decimal places, using the term “Exchange Rate” or a substantially similar term; (v) The amount in paragraph (b)(1)(i) of this section, in the currency in which the funds will be received by the designated recipient, but only if covered third-party fees are imposed under paragraph (b)(1)(vi) of this section, using the term “Transfer Amount” or a substantially similar term. The exchange rate used to calculate this amount is the exchange rate in paragraph (b)(1)(iv) of this section, including an estimated exchange rate to the extent permitted by § 1005.32, prior to any rounding of the exchange rate; (vi) Any covered third-party fees, in the currency in which the funds will be received by the designated recipient, using the term “Other Fees,” or a substantially similar term. The exchange rate used to calculate any covered third-party fees is the exchange rate in paragraph (b)(1)(iv) of this section, including an estimated exchange rate to the extent permitted by § 1005.32, prior to any rounding of the exchange rate; (vii) The amount that will be received by the designated recipient, in the currency in which the funds will be received, using the term “Total to Recipient” or a substantially similar term except that this amount shall not include non-covered third party fees or taxes collected on the remittance transfer by a person other than the provider regardless of whether such fees or taxes are disclosed pursuant to paragraph (b)(1)(viii) of this section. The exchange rate used to calculate this amount is the exchange rate in paragraph (b)(1)(iv) of this section, including an estimated exchange rate to the extent permitted by § 1005.32, prior to any rounding of the exchange rate. (viii) A statement indicating that non-covered third-party fees or taxes collected on the remittance transfer by a person other than the provider may apply to the remittance transfer and result in the designated recipient receiving less than the amount disclosed pursuant to paragraph (b)(1)(vii) of this section. A provider may only include this statement to the extent that such fees or taxes do or may apply to the transfer, using the language set forth in Model Forms A-30(a) through (c) of Appendix A to this part, as appropriate, or substantially similar language. In this statement, a provider also may, but is not required, to disclose any applicable non-covered third-party fees or taxes collected by a person other than the provider. Any such figure must be disclosed in the currency in which the funds will be received, using the language set forth in Model Forms A-30(b) through (d) of Appendix A to this part, as appropriate, or substantially similar language. The exchange rate used to calculate any disclosed non-covered third-party fees or taxes collected on the remittance transfer by a person other than the provider is the exchange rate in paragraph (b)(1)(iv) of this section, including an estimated exchange rate to the extent permitted by § 1005.32, prior to any rounding of the exchange rate; (2) Receipt. (i) The disclosures described in paragraphs (b)(1)(i) through (viii) of this section; (ii) The date in the foreign country on which funds will be available to the designated recipient, using the term “Date Available” or a substantially similar term. A provider may provide a statement that funds may be available to the designated recipient earlier than the date disclosed, using the term “may be available sooner” or a substantially similar term; (iii) The name and, if provided by the sender, the telephone number and/or address of the designated recipient, using the term “Recipient” or a substantially similar term; (iv) A statement about the rights of the sender regarding the resolution of errors and cancellation, using language set forth in Model Form A-37 of Appendix A to this part or substantially similar language. For any remittance transfer scheduled by the sender at least three business days before the date of the transfer, the statement about the rights of the sender regarding cancellation must instead reflect the requirements of § 1005.36(c); (v) The name, telephone number(s), and Web site of the remittance transfer provider; (vi) A statement that the sender can contact the State agency that licenses or charters the remittance transfer provider with respect to the remittance transfer and the Consumer Financial Protection Bureau for questions or complaints about the remittance transfer provider, using language set forth in Model Form A-37 of Appendix A to this part or substantially similar language. The disclosure must provide the name, telephone number(s), and Web site of the State agency that licenses or charters the remittance transfer provider with respect to the remittance transfer and the name, toll-free telephone number(s), and Web site of the Consumer Financial Protection Bureau; and (vii) For any remittance transfer scheduled by the sender at least three business days before the date of the transfer, or the first transfer in a series of preauthorized remittance transfers, the date the remittance transfer provider will make or made the remittance transfer, using the term “Transfer Date,” or a substantially similar term. (3) Combined disclosure In general. (ii) Transfers scheduled before the date of transfer. (4) Long form error resolution and cancellation notice. (c) Specific format requirements Grouping. (2) Proximity. (3) Prominence and size. (4) Segregation. (d) Estimates. (e) Timing. (2) Except as provided in § 1005.36(a), a receipt required by paragraph (b)(2) of this section generally must be provided to the sender when payment is made for the remittance transfer. If a transaction is conducted entirely by telephone, a receipt required by paragraph (b)(2) of this section may be mailed or delivered to the sender no later than one business day after the date on which payment is made for the remittance transfer. If a transaction is conducted entirely by telephone and involves the transfer of funds from the sender's account held by the provider, the receipt required by paragraph (b)(2) of this section may be provided on or with the next regularly scheduled periodic statement for that account or within 30 days after payment is made for the remittance transfer if a periodic statement is not provided. The statement about the rights of the sender regarding cancellation required by paragraph (b)(2)(iv) of this section may, but need not, be disclosed pursuant to the timing requirements of this paragraph if a provider discloses this information pursuant to paragraphs (a)(3)(iii) or (a)(5)(iii) of this section. (f) Accurate when payment is made. (g) Foreign language disclosures General. (i) Each of the foreign languages principally used by the remittance transfer provider to advertise, solicit, or market remittance transfer services, either orally, in writing, or electronically, at the office in which a sender conducts a transaction or asserts an error; or (ii) The foreign language primarily used by the sender with the remittance transfer provider to conduct the transaction (or for written or electronic disclosures made pursuant to § 1005.33, in the foreign language primarily used by the sender with the remittance transfer provider to assert the error), provided that such foreign language is principally used by the remittance transfer provider to advertise, solicit, or market remittance transfer services, either orally, in writing, or electronically, at the office in which a sender conducts a transaction or asserts an error, respectively. (2) Oral, mobile application, or text message disclosures. [77 FR 6285, Feb. 7, 2012, as amended at 77 FR 50282, Aug. 20, 2012; 77 FR 30703, May 22, 2013] § 1005.32 Estimates. (a) Temporary exception for insured institutions General. (i) A remittance transfer provider cannot determine the exact amounts for reasons beyond its control; (ii) A remittance transfer provider is an insured institution; and (iii) The remittance transfer is sent from the sender's account with the institution; provided however, for the purposes of this paragraph, a sender's account does not include a prepaid account, unless the prepaid account is a payroll card account or a government benefit account. (2) Sunset date. (3) Insured institution. (b) Permanent exceptions Permanent exception for transfers to certain countries General. (A) The laws of the recipient country do not permit such a determination, or (B) The method by which transactions are made in the recipient country does not permit such determination. (ii) Safe harbor. (2) Permanent exception for transfers scheduled before the date of transfer. (ii) Covered third-party fees described in § 1005.31(b)(1)(vi) may be estimated under paragraph (b)(2)(i) of this section only if the exchange rate is also estimated under paragraph (b)(2)(i) of this section and the estimated exchange rate affects the amount of such fees. (iii) Fees and taxes described in § 1005.31(b)(1)(ii) may be estimated under paragraph (b)(2)(i) of this section only if the amount that will be transferred in the currency in which it is funded is also estimated under paragraph (b)(2)(i) of this section, and the estimated amount affects the amount of such fees and taxes. (3) Permanent exception for optional disclosure of non-covered third-party fees and taxes collected by a person other than the provider. (4) Permanent exception for estimation of the exchange rate by an insured institution. (A) The remittance transfer provider is an insured institution as defined in paragraph (a)(3) of this section; (B) At the time the insured institution must provide, as applicable, the disclosure required by § 1005.31(b)(1) through (3) or § 1005.36(a)(1) or (2), the insured institution cannot determine the exact exchange rate required to be disclosed under § 1005.31(b)(1)(iv) for that remittance transfer; (C) The insured institution made 1,000 or fewer remittance transfers in the prior calendar year to the particular country for which the designated recipients of those transfers received funds in the country's local currency; and (D) The remittance transfer is sent from the sender's account with the insured institution; provided however, for the purposes of this paragraph, a sender's account does not include a prepaid account, unless the prepaid account is a payroll card account or a government benefit account. (ii) The disclosures in § 1005.31(b)(1)(v) through (vii) may be estimated under paragraph (b)(4)(i) of this section only if the exchange rate is permitted to be estimated under paragraph (b)(4)(i) of this section and the estimated exchange rate affects the amount of such disclosures. (5) Permanent exception for estimation of covered third-party fees by an insured institution. (A) The remittance transfer provider is an insured institution as defined in paragraph (a)(3) of this section; (B) At the time the insured institution must provide, as applicable, the disclosure required by § 1005.31(b)(1) through (3) or § 1005.36(a)(1) or (2), the insured institution cannot determine the exact covered third-party fees required to be disclosed under § 1005.31(b)(1)(vi) for that remittance transfer; (C) The insured institution made 500 or fewer remittance transfers in the prior calendar year to that designated recipient's institution, or a United States Federal statute or regulation prohibits the insured institution from being able to determine the exact covered third-party fees required to be disclosed under § 1005.31(b)(1)(vi) for that remittance transfer; and (D) The remittance transfer is sent from the sender's account with the insured institution; provided however, for the purposes of this paragraph, a sender's account does not include a prepaid account, unless the prepaid account is a payroll card account or a government benefit account. (ii) The disclosure in § 1005.31(b)(1)(vii) may be estimated under paragraph (b)(5)(i) of this section only if covered third-party fees are permitted to be estimated under paragraph (b)(5)(i) of this section and the estimated covered third-party fees affect the amount of such disclosure. (c) Bases for estimates generally. (1) Exchange rate. (i) For remittance transfers sent via international ACH that qualify for the exception in paragraph (b)(1)(ii) of this section, the most recent exchange rate set by the recipient country's central bank or other governmental authority and reported by a Federal Reserve Bank; (ii) The most recent publicly available wholesale exchange rate and, if applicable, any spread that the remittance transfer provider or its correspondent typically applies to such a wholesale rate for remittance transfers for that currency; or (iii) The most recent exchange rate offered or used by the person making funds available directly to the designated recipient or by the person setting the exchange rate. (2) Transfer amount in the currency in which the funds will be received by the designated recipient. (3) Covered third-party fees Imposed as percentage of amount transferred. (ii) Imposed by the intermediary or final institution. (A) The remittance transfer provider's most recent remittance transfer to the designated recipient's institution, or (B) A representative transmittal route identified by the remittance transfer provider. (4) Amount of currency that will be received by the designated recipient. (d) Bases for estimates for transfers scheduled before the date of transfer. [77 FR 6285, Feb. 7, 2012, as amended at 77 FR 50283, Aug. 20, 2012; 78 FR 30704, May 22, 2013; 79 FR 55991, Sept. 18, 2014; 81 FR 84338, Nov. 22, 2016; 85 FR 34904, June 5, 2020] § 1005.33 Procedures for resolving errors. (a) Definition of error Types of transfers or inquiries covered. error (i) An incorrect amount paid by a sender in connection with a remittance transfer unless the disclosure stated an estimate of the amount paid by a sender in accordance with § 1005.32(b)(2) and the difference results from application of the actual exchange rate, fees, and taxes, rather than any estimated amount; (ii) A computational or bookkeeping error made by the remittance transfer provider relating to a remittance transfer; (iii) The failure to make available to a designated recipient the amount of currency disclosed pursuant to § 1005.31(b)(1)(vii) and stated in the disclosure provided to the sender under § 1005.31(b)(2) or (3) for the remittance transfer, unless: (A) The disclosure stated an estimate of the amount to be received in accordance with § 1005.32(a) or (b)(1), (2), (4), or (5) and the difference results from application of the actual exchange rate, fees, and taxes, rather than any estimated amounts; or (B) The failure resulted from extraordinary circumstances outside the remittance transfer provider's control that could not have been reasonably anticipated; or (C) The difference results from the application of non-covered third-party fees or taxes collected on the remittance transfer by a person other than the provider and the provider provided the disclosure required by § 1005.31(b)(1)(viii). (iv) The failure to make funds available to a designated recipient by the date of availability stated in the disclosure provided to the sender under § 1005.31(b)(2) or (3) for the remittance transfer, unless the failure to make the funds available resulted from: (A) Extraordinary circumstances outside the remittance transfer provider's control that could not have been reasonably anticipated; (B) Delays related to a necessary investigation or other special action by the remittance transfer provider or a third party as required by the provider's fraud screening procedures or in accordance with the Bank Secrecy Act, 31 U.S.C. 5311 et seq., (C) The remittance transfer being made with fraudulent intent by the sender or any person acting in concert with the sender; or (D) The sender having provided the remittance transfer provider an incorrect account number or recipient institution identifier for the designated recipient's account or institution, provided that the remittance transfer provider meets the conditions set forth in paragraph (h) of this section; (v) The sender's request for documentation required by § 1005.31 or for additional information or clarification concerning a remittance transfer, including a request a sender makes to determine whether an error exists under paragraphs (a)(1)(i) through (iv) of this section. (2) Types of transfers or inquiries not covered. error (i) An inquiry about the status of a remittance transfer, except where the funds from the transfer were not made available to a designated recipient by the disclosed date of availability as described in paragraph (a)(1)(iv) of this section; (ii) A request for information for tax or other recordkeeping purposes; (iii) A change requested by the designated recipient; or (iv) A change in the amount or type of currency received by the designated recipient from the amount or type of currency stated in the disclosure provided to the sender under § 1005.31(b)(2) or (3) if the remittance transfer provider relied on information provided by the sender as permitted under § 1005.31 in making such disclosure. (b) Notice of error from sender Timing; contents. (i) Is received by the remittance transfer provider no later than 180 days after the disclosed date of availability of the remittance transfer; (ii) Enables the provider to identify: (A) The sender's name and telephone number or address; (B) The recipient's name, and if known, the telephone number or address of the recipient; and (C) The remittance transfer to which the notice of error applies; and (iii) Indicates why the sender believes an error exists and includes to the extent possible the type, date, and amount of the error, except for requests for documentation, additional information, or clarification described in paragraph (a)(1)(v) of this section. (2) Request for documentation or clarification. (c) Time limits and extent of investigation Time limits for investigation and report to consumer of error. (2) Remedies. (i) In the case of any error under paragraphs (a)(1)(i) through (iii) of this section, as applicable, either: (A) Refunding to the sender the amount of funds provided by the sender in connection with a remittance transfer which was not properly transmitted, or the amount appropriate to resolve the error; or (B) Making available to the designated recipient, without additional cost to the sender or to the designated recipient, the amount appropriate to resolve the error; (ii) Except as provided in paragraph (c)(2)(iii) of this section, in the case of an error under paragraph (a)(1)(iv) of this section (A) As applicable, either: ( 1 ( 2 (B) Refunding to the sender any fees imposed and, to the extent not prohibited by law, taxes collected on the remittance transfer; (iii) In the case of an error under paragraph (a)(1)(iv) of this section that occurred because the sender provided incorrect or insufficient information in connection with the remittance transfer, the remittance transfer provider shall provide the remedies required by paragraphs (c)(2)(ii)(A)( 1 (iv) In the case of a request under paragraph (a)(1)(v) of this section, providing the requested documentation, information, or clarification. (d) Procedures if remittance transfer provider determines no error or different error occurred. (1) Explanation of results of investigation. (2) Copies of documentation. (e) Reassertion of error. (f) Relation to other laws Relation to Regulation E § 1005.11 for incorrect EFTs from a sender's account. (2) Relation to Truth in Lending Act and Regulation Z. (3) Unauthorized remittance transfers. (g) Error resolution standards and recordkeeping requirements Compliance program. (2) Retention of error-related documentation. (h) Incorrect account number or recipient institution identifier provided by the sender. (1) The remittance transfer provider can demonstrate that the sender provided an incorrect account number or recipient institution identifier to the provider in connection with the remittance transfer; (2) For any instance in which the sender provided the incorrect recipient institution identifier, prior to or when sending the transfer, the provider used reasonably available means to verify that the recipient institution identifier provided by the sender corresponded to the recipient institution name provided by the sender; (3) The provider provided notice to the sender before the sender made payment for the remittance transfer that, in the event the sender provided an incorrect account number or recipient institution identifier, the sender could lose the transfer amount. For purposes of providing this disclosure, § 1005.31(a)(2) applies to this notice unless the notice is given at the same time as other disclosures required by this subpart for which information is permitted to be disclosed orally or via mobile application or text message, in which case this disclosure may be given in the same medium as those other disclosures; (4) The incorrect account number or recipient institution identifier resulted in the deposit of the remittance transfer into a customer's account that is not the designated recipient's account; and (5) The provider promptly used reasonable efforts to recover the amount that was to be received by the designated recipient. [77 FR 6285, Feb. 7, 2012, as amended at 77 FR 50284, Aug. 20, 2012; 78 FR 30704, May 22, 2013; 78 FR 49366, Aug. 14, 2013; 79 FR 55991, Sept. 18, 2014; 85 FR 34904, June 5, 2020] § 1005.34 Procedures for cancellation and refund of remittance transfers. (a) Sender right of cancellation and refund. (1) The request to cancel enables the provider to identify the sender's name and address or telephone number and the particular transfer to be cancelled; and (2) The transferred funds have not been picked up by the designated recipient or deposited into an account of the designated recipient. (b) Time limits and refund requirements. § 1005.35 Acts of agents. A remittance transfer provider is liable for any violation of this subpart by an agent when such agent acts for the provider. § 1005.36 Transfers scheduled before the date of transfer. (a) Timing. (i) Provide either the pre-payment disclosure described in § 1005.31(b)(1) and the receipt described in § 1005.31(b)(2) or the combined disclosure described in § 1005.31(b)(3), in accordance with the timing requirements set forth in § 1005.31(e); and (ii) If any of the disclosures provided pursuant to paragraph (a)(1)(i) of this section contain estimates as permitted by § 1005.32(b)(2), mail or deliver to the sender an additional receipt meeting the requirements described in § 1005.31(b)(2) no later than one business day after the date of the transfer. If the transfer involves the transfer of funds from the sender's account held by the provider, the receipt required by this paragraph may be provided on or with the next periodic statement for that account, or within 30 days after the date of the transfer if a periodic statement is not provided. (2) For each subsequent preauthorized remittance transfer: (i) If any of the information on the most recent receipt provided pursuant to paragraph (a)(1)(i) of this section, or by this paragraph (a)(2)(i), other than the temporal disclosures required by § 1005.31(b)(2)(ii) and (b)(2)(vii), is no longer accurate with respect to a subsequent preauthorized remittance transfer for reasons other than as permitted by § 1005.32, then the remittance transfer provider must provide an updated receipt meeting the requirements described in § 1005.31(b)(2) to the sender. The provider must mail or deliver this receipt to the sender within a reasonable time prior to the scheduled date of the next subsequent preauthorized remittance transfer. Such receipt must clearly and conspicuously indicate that it contains updated disclosures. (ii) Unless a receipt was provided in accordance with paragraph (a)(2)(i) of this section that contained no estimates pursuant to § 1005.32, the remittance transfer provider must mail or deliver to the sender a receipt meeting the requirements described in § 1005.31(b)(2) no later than one business day after the date of the transfer. If the remittance transfer involves the transfer of funds from the sender's account held by the provider, the receipt required by this paragraph may be provided on or with the next periodic statement for that account, or within 30 days after the date of the transfer if a periodic statement is not provided. (iii) A remittance transfer provider must provide the disclosures required by paragraph (d) of this section in accordance with the timing requirements of that section. (b) Accuracy. (2) For each subsequent preauthorized remittance transfer, the most recent receipt provided pursuant to paragraph (a)(1)(i) or (a)(2)(i) of this section must be accurate as of when such transfer is made, except: (i) The temporal elements required by § 1005.31(b)(2)(ii) and (b)(2)(vii) must be accurate only if the transfer is the first transfer to occur after the disclosure was provided; and (ii) To the extent estimates are permitted by § 1005.32. (3) Disclosures provided pursuant to paragraph (a)(1)(ii) or (a)(2)(ii) of this section must be accurate as of when the remittance transfer to which it pertains is made, except to the extent estimates are permitted by § 1005.32(a) or (b)(1), (4), or (5). (c) Cancellation. (1) Enables the provider to identify the sender's name and address or telephone number and the particular transfer to be cancelled; and (2) Is received by the provider at least three business days before the scheduled date of the remittance transfer. (d) Additional requirements for subsequent preauthorized remittance transfers Disclosure requirement. (A) The date the provider will make the subsequent transfer, using the term “Future Transfer Date,” or a substantially similar term; (B) A statement about the rights of the sender regarding cancellation as described in § 1005.31(b)(2)(iv); and (C) The name, telephone number(s), and Web site of the remittance transfer provider. (ii) If the future date or dates of transfer are described as occurring in regular periodic intervals, e.g., (2) Notice requirements. (ii) For any subsequent preauthorized remittance transfer for which the date of transfer is four or fewer business days after the date payment is made for that transfer, the information required by paragraph (d)(1) of this section must be provided on or with the receipt described in § 1005.31(b)(2), or disclosed as permitted by § 1005.31(a)(3) or (a)(5), for the initial transfer in that series in accordance with paragraph (a)(1)(i) of this section. (3) Specific format requirement. (4) Accuracy. [76 FR 81023, Dec. 27, 2011, as amended at 77 FR 50284, Aug. 20, 2012; 85 FR 34904, June 5, 2020] Appendix A to Part 1005—Model Disclosure Clauses and Forms A-1—Model Clauses for Unsolicited Issuance (§ 1005.5(b)(2)) A-2—Model Clauses for Initial Disclosures (§ 1005.7(b)) A-3—Model Forms for Error Resolution Notice (§§ 1005.7(b)(10) and 1005.8(b)) A-4—Model Form for Service-Providing Institutions (§ 1005.14(b)(1)(ii)) A-5—Model Clauses for Government Agencies (§ 1005.15(e)(1) and (2)) A-6—Model Clauses for Authorizing One-Time Electronic Fund Transfers Using Information From a Check (§ 1005.3(b)(2)) A-7—Model Clauses for Financial Institutions Offering Prepaid Accounts (§ 1005.18(d) and (e)(3)) A-8—Model Clause for Electronic Collection of Returned Item Fees (§ 1005.3(b)(3)) A-9—Model Consent Form for Overdraft Services (§ 1005.17) A-10(a)—Model Form for Short Form Disclosures for Government Benefit Accounts (§§ 1005.15(c) and 1005.18(b)(2), (3), (6), and (7)) A-10(b)—Model Form for Short Form Disclosures for Payroll Card Accounts (§ 1005.18(b)(2), (3), (6), and (7)) A-10(c)—Model Form for Short Form Disclosures for Prepaid Accounts, Example 1 (§ 1005.18(b)(2), (3), (6), and (7)) A-10(d)—Model Form for Short Form Disclosures for Prepaid Accounts, Example 2 (§ 1005.18(b)(2), (3), (6), and (7)) A-10(e)—Model Form for Short Form Disclosures for Prepaid Accounts with Multiple Service Plans (§ 1005.18(b)(2), (3), (6), and (7)) A-10(f)—Sample Form for Long Form Disclosures for Prepaid Accounts (§ 1005.18(b)(4), (6), and (7)) A-11 through A-30 [Reserved] A-30(a)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency including a disclaimer where non-covered third-party fees and foreign taxes may apply (§ 1005.31(b)(1)) A-30(b) —Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency including a disclaimer with estimate for non-covered third-party fees (§ 1005.31(b)(1) and § 1005.32(b)(3)) A-30(c)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency including a disclaimer with estimate for foreign taxes (§ 1005.31(b)(1) and § 1005.32(b)(3)) A-30(d)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency, including a disclaimer with estimates for non-covered third-party fees and foreign taxes (§ 1005.31(b)(1) and § 1005.32(b)(3)) A-31—Model Form for Receipts for Remittance Transfers Exchanged into Local Currency (§ 1005.31(b)(2)) A-32—Model Form for Combined Disclosures for Remittance Transfers Exchanged into Local Currency (§ 1005.31(b)(3)) A-34—Model Form for Receipts for Dollar-to-Dollar Remittance Transfers (§ 1005.31(b)(2)) A-35—Model Form for Combined Disclosures for Dollar-to-Dollar Remittance Transfers (§ 1005.31(b)(3)) A-36—Model Form for Error Resolution and Cancellation Disclosures (Long) (§ 1005.31(b)(4)) A-37—Model Form for Error Resolution and Cancellation Disclosures (Short) (§ 1005.31(b)(2)(iv) and (b)(2)(vi)) A-39—Model Form for Receipts for Remittance Transfers Exchanged into Local Currency—Spanish (§ 1005.31(b)(2)) A-40—Model Form for Combined Disclosures for Remittance Transfers Exchanged into Local Currency—Spanish (§ 1005.31(b)(3)) A-41—Model Form for Error Resolution and Cancellation Disclosures (Long)—Spanish (§ 1005.31(b)(4)) A-1—Model Clauses for Unsolicited Issuance (§ 1005.5( 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 (§ 1005.7( b (a) Consumer Liability (§ 1005.7(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 (§ 1005.7(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 (§ 1005.7(b)(3)). (d) Transfer types and limitations (§ 1005.7(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. e.g., e.g., (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 (§ 1005.7(b)(5)) Per transfer charge. (2) Fixed charge. (3) Average or minimum balance charge. (f) Confidentiality (§ 1005.7(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 (§ 1005.7(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 (§ 1005.7(b) (6), (7) and (8); § 1005.10(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 (§ 1005.7(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 (§ 1005.7(b)(11)). A-3—Model Forms for Error Resolution Notice (§§ 1005.7( b b (a) Initial and annual error resolution notice (§§ 1005.7(b)(10) and 1005.8(b)). In Case of Errors or Questions About Your Electronic Transfers Telephone us at [insert telephone number] Write us at [insert address] [or email us at [insert email 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 (§ 1005.8(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 (§ 1005.14( 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 Clauses for Government Agencies (§ 1005.15(e)(1) and (2)) (a) Disclosure by government agencies of information about obtaining account information for government benefit accounts (§ 1005.15(e)(1)(i)). 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]. This information, along with a 12-month history of account transactions, is also available online at [Internet address]. You also have the right to obtain at least 24 months of written history of account transactions by calling [telephone number], or by writing to us at [address]. You will not be charged a fee for this information unless you request it more than once per month. [Optional: Or you may request a written history of account transactions by contacting your caseworker.] (b) Disclosure of error resolution procedures for government agencies that do not provide periodic statements (§ 1005.15(e)(1)(ii) and (e)(2)). In Case of Errors or Questions About Your Electronic Transfers Telephone us at [telephone number] Write us at [address] [or email us at [email address]] as soon as you can, if you think an error has occurred in your [agency's name for program] 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] [optional: or by contacting your caseworker]. 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 (§ 1005.3( 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 Prepaid Accounts (§ 1005.18(d) and (e)(3)) (a) Disclosure by financial institutions of information about obtaining account information for prepaid accounts (§ 1005.18(d)(1)(i)). You may obtain information about the amount of money you have remaining in your prepaid account by calling [telephone number]. This information, along with a 12-month history of account transactions, is also available online at [internet address]. [For accounts that are or can be registered:] [If your account is registered with us,] You also have the right to obtain at least 24 months of written history of account transactions by calling [telephone number], or by writing us at [address]. You will not be charged a fee for this information unless you request it more than once per month. (b) Disclosure of error-resolution procedures for financial institutions that do not provide periodic statements (§ 1005.18(d)(1)(ii) and (d)(2)). In Case of Errors or Questions About Your Prepaid Account Telephone us at [telephone number] or Write us at [address] [or email us at [email address]] as soon as you can, if you think an error has occurred in your prepaid 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 [prepaid 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, [and your account is registered with us,] 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. [Keep reading to learn more about how to register your card.] 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]]. (c) Warning regarding unverified prepaid accounts (§ 1005.18(e)(3)). It is important to register your prepaid account as soon as possible. Until you register your account and we verify your identity, we are not required to research or resolve any errors regarding your account. To register your account, go to [internet address] or call us at [telephone number]. We will ask you for identifying information about yourself (including your full name, address, date of birth, and [Social Security Number] [government-issued identification number]), so that we can verify your identity. A-8—Model Clause for Electronic Collection of Returned Item Fees (§ 1005.3( 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-11 through A-29 [Reserved] A-30(a)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency (§ 1005.31(b)(1)) A-30(b)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency (§ 1005.31(b)(1)) A-30(c)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency (§ 1005.31(b)(1)) A-30(d)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency (§ 1005.31(b)(1)) A-31—Model Form for Receipts for Remittance Transfers Exchanged into Local Currency (§ 1005.31(b)(2)) A-32—Model Form for Combined Disclosures for Remittance Transfers Exchanged into Local Currency (§ 1005.31(b)(3)) A-33—Model Form for Pre-Payment Disclosures for Dollar-to-Dollar Remittance Transfers (§ 1005.31(b)(1)) A-34—Model Form for Receipts for Dollar-to-Dollar Remittance Transfers (§ 1005.31(b)(2)) A-35—Model Form for Combined Disclosures for Dollar-to-Dollar Remittance Transfers (§ 1005.31(b)(3)) A-36—Model Form for Error Resolution and Cancellation Disclosures (Long) (§ 1005.31(b)(4)) A-37—Model Form for Error Resolution and Cancellation Disclosures (Short) (§ 1005.31(b)(2)(iv) and (b)(2)(vi)) You have a right to dispute errors in your transaction. If you think there is an error, contact us within 180 days at [insert telephone number] or [insert website]. You can also contact us for a written explanation of your rights. You can cancel for a full refund within 30 minutes of payment, unless the funds have been picked up or deposited. For questions or complaints about [insert name of remittance transfer provider], contact: State Regulatory Agency, 800-111-2222, www.stateregulatoryagency.gov Consumer Financial Protection Bureau, 855-411-2372, 855-729-2372 (TTY/TDD), www.consumerfinance.gov A-38—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency—Spanish (§ 1005.31(b)(1)) A-39—Model Form for Receipts for Remittance Transfers Exchanged into Local Currency—Spanish (§ 1005.31(b)(2)) A-40—Model Form for Combined Disclosures for Remittance Transfers Exchanged into Local Currency—Spanish (§ 1005.31(b)(3)) A-41—Model Form for Error Resolution and Cancellation Disclosures (Long)—Spanish (§ 1005.31(b)(4)) [76 FR 81023, Dec. 27, 2011, as amended at 77 FR 6290, Feb. 7, 2012; 77 FR 40459, July 10, 2012; 78 FR 30705, May 22, 2013; 79 FR 55991, Sept. 18, 2014; 81 FR 70320, Oct. 12, 2016; 81 FR 84338, Nov. 22, 2016; 83 FR 6419, Feb. 13, 2018] Appendix B to Part 1005 [Reserved] Appendix C to Part 1005—Issuance of Official Interpretations Official Interpretations Interpretations of this part issued by duly authorized officials of the Bureau provide the protection afforded under section 916(d) of the Act. 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 Interpretations A request for an official interpretation shall be in writing and addressed to the Bureau of Consumer Financial Protection, 1700 G Street NW, Washington, DC 20552. The request shall contain a complete statement of all relevant facts concerning the issue, including copies of all pertinent documents. Scope of Interpretations No 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. [88 FR 16538, Mar. 20, 2023] Supplement I to Part 1005—Official Interpretations Section 1005.2 Definitions 2(a) Access Device 1. Examples. 2. Checks used to capture information. See 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 § 1005.3(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. Examples of accounts not covered by Regulation E (12 CFR part 1005) include: i. Profit-sharing and pension accounts established under a trust agreement, which are exempt under § 1005.2(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. Paragraph 2(b)(3) Paragraph 2(b)(3)(i) 1. Debit card includes prepaid card. 2. Certain employment-related cards not covered as payroll card accounts. 3. Marketed or labeled as prepaid.” 4. Issued on a prepaid basis. 5. Capable of being loaded with funds. 6. Product acting as a pass-through vehicle for funds. 7. Not required to be reloadable. 8. Primary function. i. An account's primary function is to enable a consumer to conduct transactions with multiple, unaffiliated merchants for goods or services, at automated teller machines, or to conduct person-to-person transfers, even if the account also enables a third party to disburse funds to a consumer. For example, a prepaid account that conveys tax refunds or insurance proceeds to a consumer meets the primary function test if the account can be used, e.g., ii. Whether an account satisfies § 1005.2(b)(3)(i)(D) is determined by reference to the account, not the access device associated with the account. An account satisfies § 1005.2(b)(3)(i)(D) even if the account's access device can be used for other purposes, for example, as a form of identification. Such accounts may include, for example, a prepaid account used to disburse student loan proceeds via a card device that can be used at unaffiliated merchants or to withdraw cash from an automated teller machine, even if that access device also acts as a student identification card. iii. Where multiple accounts are associated with the same access device, the primary function of each account is determined separately. One or more accounts can satisfy § 1005.2(b)(3)(i)(D) even if other accounts associated with the same access device do not. For example, a student identification card may act as an access device associated with two separate accounts: An account used to conduct transactions with multiple, unaffiliated merchants for goods or services, and an account used to conduct closed-loop transactions on campus. The account used to conduct transactions with multiple, unaffiliated merchants for goods or services satisfies § 1005.2(b)(3)(i)(D), even though the account used to conduct closed-loop transactions does not (and as such the latter is not a prepaid account as defined by § 1005.2(b)(3)). iv. An account satisfies § 1005.2(b)(3)(i)(D) if its primary function is to provide general transaction capability, even if an individual consumer does not in fact use it to conduct multiple transactions. For example, the fact that a consumer may choose to withdraw the entire account balance at an automated teller machine or transfer it to another account held by the consumer does not change the fact that the account's primary function is to provide general transaction capability. v. An account whose primary function is other than to conduct transactions with multiple, unaffiliated merchants for goods or services, or at automated teller machines, or to conduct person-to-person transfers, does not satisfy § 1005.2(b)(3)(i)(D). Such accounts may include, for example, a product whose only function is to make a one-time transfer of funds into a separate prepaid account. 9. Redeemable upon presentation at multiple, unaffiliated merchants. 10. Person-to-person transfers. Paragraph 2(b)(3)(ii) 1. Excluded health care and employee benefit related prepaid products. 2. Excluded disaster relief funds. 3. Marketed and labeled as a gift card or gift certificate. 4. Loyalty, award, or promotional gift cards. 3 3 3 2(d) Business Day 1. Duration. 2. Substantially all business functions. etc. 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. See 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 1005.3 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 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. 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. See 3. Notice for each transfer. 4. Multiple payments/multiple consumers. 5. Additional disclosures about ECK transactions at POS. 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 3(c)(1) Checks 1. Re-presented checks. 2. Check used to capture information for a one-time EFT. See 3(c)(2) Check Guarantee or Authorization 1. Memo posting. 3(c)(3) Wire or Other Similar Transfers 1. Fedwire and ACH. 2. Article 4A. 3. Similar fund transfer systems. 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). 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, non-sufficient funds (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. 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 of the Board of Governors of the Federal Reserve System (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. 3(c)(7) Small Institutions 1. Coverage. Section 1005.4 General Disclosure Requirements; Jointly Offered Services 4(a) Form of Disclosures 1. General. 2. Foreign language disclosures. Section 1005.5 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. See 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 1005.6 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. 6(b)(1) Timely Notice Given 1. $50 limit applies. 2. Knowledge of loss or theft of access device. 3. Two business day rule. 6(b)(2) Timely Notice Not Given 1. $500 limit applies. 6(b)(3) Periodic Statement; Timely Notice Not Given 1. Unlimited liability applies. 2. Transfers not involving access device. 6(b)(4) Extension of Time Limits 1. Extenuating circumstances. 6(b)(5) Notice to Financial Institution 1. Receipt of notice. 2. Notice by third party. 3. Content of notice. Section 1005.7 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 7(b)(1) Liability of Consumer 1. No liability imposed by financial institution. 2. Preauthorized transfers. 3. Additional information. 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. 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. See 7(b)(5) Fees 1. Disclosure of EFT fees. But see 2. Fees also applicable to non-EFT. 3. Interchange system fees. See 7(b)(9) Confidentiality 1. Information provided to third parties. 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. See Section 1005.8 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. See also 4. Change in telephone number or address. See also 8(b) Error Resolution Notice 1. Change between annual and periodic notice. 2. Exception for new accounts. Section 1005.9 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. 9(a)(1) Amount 1. Disclosure of transaction fee. See 2. Relationship between § 1005.9(a)(1) and § 1005.16. i. Section 1005.9(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 1005.16 requires disclosure both on a sign on or at the terminal (in a prominent and conspicuous location) and on the terminal screen. Section 1005.16 permits disclosure on a paper notice as an alternative to the on-screen disclosure. ii. The disclosure of the fee on the receipt under § 1005.9(a)(1) cannot be used to comply with the alternative paper disclosure procedure under § 1005.16, 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 1005.9(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 § 1005.16 applies only to ATMs. 9(a)(2) Date 1. Calendar date. 9(a)(3) Type 1. Identifying transfer and account. 2. Exception. 3. Access to multiple accounts. 4. Generic descriptions. 5. Point-of-sale transactions. 9(a)(5) Terminal Location 1. Options for identifying terminal. i. The city, state or foreign country, and the information in § 1005.9(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 institution'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. 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. See 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. 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. 9(b)(3) Fees 1. Disclosure of fees. 2. Fees in interchange system. 3. Finance charges. 9(b)(4) Account Balances 1. Opening and closing balances. 9(b)(5) Address and Telephone Number for Inquiries 1. Telephone number. 9(b)(6) Telephone Number for Preauthorized Transfers 1. Telephone number. See 9(c) Exceptions to the Periodic Statement Requirements for Certain Accounts 1. Transfers between accounts. 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. See also 9(d) Documentation for Foreign-Initiated Transfers 1. Foreign-initiated transfers. Section 1005.10 Preauthorized Transfers 10(a) Preauthorized Transfers to Consumer's Account 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. But see 3. Alternative procedure for processing a stop-payment request. 10(d) Notice of Transfers Varying in Amount 10(d)(1) Notice 1. Preexisting authorizations. 10(d)(2) Range 1. Range. 2. Transfers to an account of the consumer held at another institution. 10(e) Compulsory Use 10(e)(1) Credit 1. General rule for loan payments. 2. Overdraft credit plans not accessible by hybrid prepaid-credit cards and covered overdraft credit extended by very large financial institutions. ii. Credit extended through a negative balance on the asset feature of a prepaid account that meets the conditions of Regulation Z, 12 CFR 1026.61(a)(4), is considered credit extended pursuant to an overdraft credit plan for purposes of § 1005.10(e)(1). Thus, the exception for overdraft credit plans in § 1005.10(e)(1) applies to this credit. 3. Applicability to covered separate credit features accessible by hybrid prepaid-credit cards. ii. Under Regulation Z, 12 CFR 1026.12(d)(1), a card issuer may not take any action, either before or after termination of credit card privileges, to offset a cardholder's indebtedness arising from a consumer credit transaction under the relevant credit card plan against funds of the cardholder held on deposit with the card issuer. Under Regulation Z, 12 CFR 1026.12(d)(3), with respect to covered separate credit features accessible by hybrid prepaid-credit cards as defined in 12 CFR 1026.61, a card issuer generally is not prohibited from periodically deducting all or part of the cardholder's credit card debt from a deposit account (such as a prepaid account) held with the card issuer under a plan that is authorized in writing by the cardholder, so long as the card issuer does not make such deductions to the plan more frequently than once per calendar month. A card issuer is prohibited under Regulation Z, 12 CFR 1026.12(d), from automatically deducting all or part of the cardholder's credit card debt under a covered separate credit feature from a deposit account (such as a prepaid account) held with the card issuer on a daily or weekly basis, or whenever deposits are made to the deposit account. Section 1005.10(e)(1) further restricts the card issuer from requiring payment from a deposit account (such as a prepaid account) of credit card balances of a covered separate credit feature accessible by a hybrid prepaid-credit card by electronic means on a preauthorized, recurring basis. 4. Incentives. 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. 10(e)(2) Employment or Government Benefit 1. Payroll. 2. Government benefit. Section 1005.11 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 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. 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. 11(c)(3) Extension of Time Periods 1. POS debit card transactions. 11(c)(4) Investigation 1. Third parties. 2. Scope of investigation. 3. POS transfers. 4. Agreement. 5. No EFT agreement. 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. 11(d)(1) Written Explanation 1. Request for documentation. 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 1005.12 Relation to Other Laws 12(a) Relation to Truth in Lending 1. Issuance rules for access devices other than access devices for prepaid accounts. 2. Overdraft services. 3. Issuance of prepaid access devices that can access a covered separate credit feature subject to Regulation Z. 4. Addition of a covered separate credit feature to an existing access device for a prepaid account. 5. Determining applicable regulation related to liability and error resolution. ii. Under § 1005.12(a)(1)(iv)(A), with respect to an account (other than a prepaid account) where credit is extended incident to an electronic fund transfer under an agreement to extend overdraft credit between the consumer and the financial institution, Regulation E's liability limitations and error resolution provisions apply to the transaction, in addition to Regulation Z, 12 CFR 1026.13(d) and (g) (which apply because of the extension of credit associated with the overdraft feature on the asset account). iii. For transactions involving access devices that also function as credit cards under Regulation Z (12 CFR part 1026), whether Regulation E or Regulation Z applies depends on the nature of the transaction. For example, if the transaction solely involves an extension of credit, and does not access funds in a consumer asset account, such as a checking account or prepaid account, the liability limitations and error resolution requirements of Regulation Z apply. If the transaction accesses funds in an asset account only (with no credit extended), the provisions of Regulation E apply. If the transaction access funds in an asset account but also involves an extension of credit under the overdraft credit feature subject to Regulation Z attached to the account, Regulation E's liability limitations and error resolution provisions apply, in addition to Regulation Z, 12 CFR 1026.13(d) and (g) (which apply because of the extension of credit associated with the overdraft feature on the asset account). If a consumer's access device is also a credit card and the device is used to make unauthorized withdrawals from an asset account, but also is used to obtain unauthorized cash advances directly from a credit feature that is subject to Regulation Z that is separate from the asset account, both Regulation E and Regulation Z apply. iv. The following examples illustrate these principles: A. A consumer has a card that can be used either as a credit card or an access device that draws on the consumer's checking account. When used as a credit card, the card does not first access any funds in the checking account but draws only on a separate credit feature subject to Regulation Z. 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 an access device 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 an access device for the checking account and as a credit card; for example, the thief makes some purchases using the card to access funds in the checking account 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 an access device for the checking account, 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 credit feature subject to Regulation Z attached to the checking account. The overdraft credit feature associated with the card is accessed only when the consumer uses the card to make a purchase (or other transaction) for which there are insufficient or unavailable funds in the checking account. In this situation, if the card is stolen and used to make purchases funded entirely by available funds in the checking account, the liability limits and the error resolution provisions of Regulation E apply. If the use of the card results in an extension of credit that is incident to an electronic fund transfer where the transaction is funded partially by funds in the consumer's asset account and partially by credit extended under the overdraft credit feature, the error resolution provisions of Regulation Z, 12 CFR 1026.13(d) and (g), apply in addition to the Regulation E provisions, but the other liability limit and error resolution provisions of Regulation Z do not. Relatedly, if the use of the card is funded entirely by credit extended under the overdraft credit feature, the transaction is governed solely by the liability limitations and error resolution requirements of Regulation Z. See E. The same principles in comment 12(a)-5.iv.A, B, C, and D apply to an access device for a prepaid account that also is a hybrid prepaid-credit card with respect to a covered separate credit feature under Regulation Z, 12 CFR 1026.61. See also 12(b) Preemption of Inconsistent State Laws 1. Specific determinations. 2. Preemption determinations generally. 3. Preemption determination—Michigan. i. Definition of unauthorized use. ii. Consumer liability for unauthorized use of an account. iii. Error resolution. iv. Receipts and periodic statements. 4. Preemption determination—Tennessee. i. Gift certificates, store gift cards, and general-use prepaid cards. Section 1005.13 Administrative Enforcement; Record Retention 13(b) Record Retention 1. Requirements. Section 1005.14 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. 14(b)(1) Disclosures and Documentation 1. Periodic statements from electronic fund transfer service provider. 14(b)(2) Error Resolution 1. Error resolution. 14(c) Compliance by Account-Holding Institution 14(c)(1) Documentation 1. Periodic statements from account-holding institution. Section 1005.15—Electronic Fund Transfer of Government Benefits 15(c) Pre-Acquisition Disclosure Requirements 1. Disclosing the short and long form before acquisition. i. A government agency informs a consumer that she can receive distribution of benefits via a government benefit account in the form of a prepaid card. The consumer receives the prepaid card and the disclosures required by § 1005.18(b) to review at the time the consumer receives benefits eligibility information from the agency. After receiving the disclosures, the consumer chooses to receive benefits via the government benefit account. These disclosures were provided to the consumer pre-acquisition, and the agency has complied with § 1005.15(c). By contrast, if the consumer does not receive the disclosures required by § 1005.18(b) to review until the time at which the consumer received the first benefit payment deposited into the government benefit account, these disclosures were provided to the consumer post-acquisition, and were not provided in compliance with § 1005.15(c). 2. Acquisition and disclosures given during the same appointment. 3. Form and formatting requirements for government benefit account disclosures. 4. Disclosure requirements outside the short form disclosure. 15(d) Access to Account Information 1. Access to account information. 15(e) Modified Disclosure, Limitations on Liability, and Error Resolution Requirements 1. Modified limitations on liability and error resolution requirements. 15(f) Disclosure of Fees and Other Information 1. Disclosures on prepaid account access devices. Section 1005.17 Requirements for Overdraft Services 17(a) Definition 1. Exempt securities- and commodities-related lines of credit. 2. Covered overdraft credit. 17(b) Opt-In Requirement 1. Scope. 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 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. 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. 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 online bill payment services. 2. Limited-feature bank accounts. 17(c) Timing 1. 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. Section 1005.18—Requirements for Financial Institutions Offering Prepaid Accounts 18(a) Coverage 1. Issuance of access device. 2. Application to employers and service providers. 18(b) Pre-Acquisition Disclosure Requirements 1. Written and electronic pre-acquisition disclosures. et seq. 2. Currency. 18(b)(1)(i) General 1. Disclosing the short form and long form before acquisition. i. For purposes of § 1005.18(b)(1)(i), a consumer acquires a prepaid account by purchasing, opening or choosing to be paid via a prepaid account, as illustrated by the following examples: A. A consumer inquires about obtaining a prepaid account at a branch location of a bank. A consumer then receives the disclosures required by § 1005.18(b). After receiving the disclosures, a consumer then opens a prepaid account with the bank. This consumer received the short form and long form pre-acquisition in accordance with § 1005.18(b)(1)(i). B. A consumer learns that he or she can receive wages via a payroll card account, at which time the consumer is provided with a payroll card and the disclosures required by § 1005.18(b) to review. The consumer then chooses to receive wages via a payroll card account. These disclosures were provided pre-acquisition in compliance with § 1005.18(b)(1)(i). By contrast, if a consumer receives the disclosures required by § 1005.18(b) to review at the end of the first pay period, after the consumer received the first payroll payment on the payroll card, these disclosures were provided to a consumer post-acquisition, and thus not provided in compliance with § 1005.18(b)(1)(i). ii. Section 1005.18(b)(1)(i) permits delivery of the disclosures required by § 1005.18(b) at the time the consumer receives the prepaid account, rather than prior to acquisition, for prepaid accounts that are used for disbursing funds to consumers when the financial institution or third party making the disbursement does not offer any alternative means for the consumer to receive those funds in lieu of accepting the prepaid account. For example, a utility company refunds consumers' initial deposits for its utility services via prepaid accounts delivered to consumers by mail. Neither the utility company nor the financial institution that issues the prepaid accounts offer another means for a consumer to receive that refund other than by accepting the prepaid account. In this case, the financial institution may provide the disclosures required by § 1005.18(b) together with the prepaid account ( e.g., 2. Disclosures provided electronically. i. A financial institution presents the short form disclosure required by § 1005.18(b)(2), together with the information required by § 1005.18(b)(5), and the long form disclosure required by § 1005.18(b)(4) on the same web page. A consumer must view the web page before choosing to accept the prepaid account. ii. A financial institution presents the short form disclosure required by § 1005.18(b)(2), together with the information required by § 1005.18(b)(5), on a web page. The financial institution includes, after the short form disclosure or as part of the statement required by § 1005.18(b)(2)(xiii), a link that directs the consumer to a separate web page containing the long form disclosure required by § 1005.18(b)(4). The consumer must view the web page containing the long form disclosure before choosing to accept the prepaid account. iii. A financial institution presents on a web page the short form disclosure required by § 1005.18(b)(2), together with the information required by § 1005.18(b)(5), followed by the initial disclosures required by § 1005.7(b), which contains the long form disclosure required by § 1005.18(b)(4), in accordance with § 1005.18(f)(1). The financial institution includes, after the short form disclosure or as part of the statement required by § 1005.18(b)(2)(xiii), a link that directs the consumer to the section of the initial disclosures containing the long form disclosure pursuant to § 1005.18(b)(4). A consumer must view this web page before choosing to accept the prepaid account. 18(b)(1)(ii) Disclosures for Prepaid Accounts Acquired in Retail Locations 1. Retail locations. 2. Disclosures provided inside prepaid account access device packaging material. 3. Consumers working in retail locations. 4. Providing the long form disclosure by telephone and website pursuant to the retail location exception. 18(b)(1)(iii) Disclosures for Prepaid Accounts Acquired Orally by Telephone 1. Prepaid accounts acquired by telephone. 18(b)(2) Short Form Disclosure Content 1. Disclosures that are not applicable or are free. 2. Prohibition on disclosure of finance charges. See also 18(b)(2)(i) Periodic Fee 1. Periodic fee variation. See 18(b)(2)(iii) ATM Withdrawal Fees 1. International ATM withdrawal fees. 18(b)(2)(iv) Cash Reload Fee 1. Total of all charges. 2. Cash deposit fee. 18(b)(2)(v) ATM Balance Inquiry Fees 1. International ATM balance inquiry fees. 18(b)(2)(vii) Inactivity Fee 1. Inactivity fee conditions. 18(b)(2)(viii) Statements Regarding Additional Fee Types 18(b)(2)(viii)(A) Statement Regarding Number of Additional Fee Types Charged 1. Fee types counted in total number of additional fee types. i. Fee types excluded from the number of additional fee types. ii. Fee types counted in the number of additional fee types. 2. Examples of fee types and fee variations. i. Fee types related to reloads of funds. A. Electronic reload. B. Check reload. ii. Fee types related to withdrawals of funds. A. Electronic withdrawal. B. Teller withdrawal. C. Cash back at POS. D. Account closure. iii. Fee types related to international transactions. A. International ATM withdrawal. B. International ATM balance inquiry. C. International transaction (excluding ATM withdrawal and balance inquiry). iv. Bill payment. v. Person-to-person or card-to-card transfer of funds. vi. Paper checks. vii. Stop payment. viii. Fee types related to card services. A. Card replacement. B. Secondary card. C. Personalized card. ix. Legal. 3. Multiple service plans. 2 4. Consistency in additional fee type categorization. 18(b)(2)(viii)(B) Statement Directing Consumers to Disclosure of Additional Fee Types 1. Statement clauses. i. A financial institution that has one additional fee type and discloses that additional fee type pursuant to § 1005.18(b)(2)(ix) might provide the statements required by § 1005.18(b)(2)(viii)(A) and (B) together as: “We charge 1 other type of fee. It is:”. ii. A financial institution that has five additional fee types and discloses one of those additional fee types pursuant to § 1005.18(b)(2)(ix) might provide the statements required by § 1005.18(b)(2)(viii)(A) and (B) together as: “We charge 5 other types of fees. Here is 1 of them:”. iii. A financial institution that has two additional fee types and discloses both of those fee types pursuant to § 1005.18(b)(2)(ix) might provide the statement required by § 1005.18(b)(2)(viii)(A) and (B) together as: “We charge 2 other types of fees. They are:”. 18(b)(2)(ix) Disclosure of Additional Fee Types 18(b)(2)(ix)(A) Determination of Which Additional Fee Types To Disclose 1. Number of fee types to disclose. 1 3 2. Abbreviations. 3. Revenue from consumers. 4. Assessing revenue within and across prepaid account programs to determine disclosure of additional fee types. i. Prepaid account programs with different fee schedules. ii. Prepaid account programs with identical fee schedules. iii. Prepaid account programs with both different fee schedules and identical fee schedules. iv. Multiple service plan prepaid account programs. 2 1 2 2 5. Exclusions. 1 3 i. Exclusion for fee types required to be disclosed elsewhere. 1 1 1 1 ii. De minimis exclusion. 2 See iii. Exclusion for credit-related fees. 3 2 18(b)(2)(ix)(B) Disclosure of Fewer Than Two Additional Fee Types 1. Disclosure of one or no additional fee types. i. A financial institution has a prepaid account program with only one fee type that satisfies the criteria in § 1005.18(b)(2)(ix)(A) and thus, pursuant to § 1005.18(b)(2)(ix)(A), the financial institution must disclose that one fee type. The prepaid account program has three other fee types that generate revenue from consumers, but they do not exceed the de minimis threshold or otherwise satisfy the criteria in § 1005.18(b)(2)(ix)(B). Pursuant to § 1005.18(b)(2)(ix)(B), the financial institution is not required to make any additional disclosure, but it may choose to disclose one of the three fee types that do not meet the criteria in § 1005.18(b)(2)(ix)(A). ii. A financial institution has a prepaid account program with four fee types that generate revenue from consumers, but none exceeds the de minimis threshold or otherwise satisfy the criteria in § 1005.18(b)(2)(ix)(A). Pursuant to § 1005.18(b)(2)(ix)(B), the financial institution is not required to make any disclosure, but it may choose to disclose one or two of the fee types that do not meet the criteria in § 1005.18(b)(2)(ix)(A). 2. No disclosure of finance charges as an additional fee type. 18(b)(2)(ix)(C) Fee Variations in Additional Fee Types 1. Two or more fee variations. 2 i. Two fee variations with different fee amounts. ii. More than two fee variations. iii. Two fee variations with like fee amounts. iv. Multiple service plans. 2 2. One fee variation under a particular fee type. i.e., 18(b)(2)(ix)(D) Timing of Initial Assessment of Additional Fee Types Disclosure 18(b)(2)(ix)(D)(1) Existing Prepaid Account Programs as of April 1, 2019 1. 24 month period with available data. 1 18(b)(2)(ix)(D)(2) Existing Prepaid Account Programs as of April 1, 2019 With Unavailable Data 1. 24 month period without available data. 2 2 18(b)(2)(ix)(E) Timing of Periodic Reassessment and Update of Additional Fee Types Disclosure 18(b)(2)(ix)(E)(2) Periodic Reassessment 1. Periodic reassessment and, if applicable, update of additional fee types disclosure. 2 4 2 i. Reassessment with no change in the additional fee types disclosed. ii. Reassessment with a change in the additional fee types disclosed. 4 iii. Reassessment with the addition of an additional fee type already voluntarily disclosed. 2. Reassessment more frequently than every 24 months. 2 2 18(b)(2)(ix)(E)(3) Fee Schedule Change 1. Revised prepaid account programs. 3 2 4 4 18(b)(2)(ix)(E)(4) Update Printing Exception 1. Application of the update printing exception to prepaid accounts sold in retail locations. 4 2 3 4 4 4 18(b)(2)(x) Statement Regarding Overdraft Credit Features 1. Short form disclosure when overdraft credit feature may be offered. 18(b)(2)(xi) Statement Regarding Registration and FDIC or NCUA Insurance 1. Disclosure of FDIC or NCUA insurance. 2. Consumer identification and verification processes. 18(b)(2)(xiii) Statement Regarding Information on All Fees and Services 1. Financial institution's telephone number. 2. Financial institution's website. 18(b)(2)(xiv) Additional Content for Payroll Card Accounts 18(b)(2)(xiv)(A) Statement Regarding Wage or Salary Payment Options 1. Statement options for payroll card accounts. 2. Statement options for government benefit accounts. 3. Statement permitted for other prepaid accounts. 18(b)(2)(xiv)(B) Statement Regarding State-Required Information or Other Fee Discounts and Waivers 1. Statement options for state-required information or other fee discounts or waivers. 18(b)(3) Short Form Disclosure of Variable Fees and Third-Party Fees and Prohibition on Disclosure of Finance Charges 18(b)(3)(i) General Disclosure of Variable Fees 1. Short form disclosure of variable fees. 18(b)(3)(ii) Disclosure of Variable Periodic Fee 1. Periodic fee variation alternative. 18(b)(3)(iii) Single Disclosure for Like Fees 1. Alternative for two-tier fees in the short form disclosure. i. A financial institution charges $1 for both in-network and out-of-network automated teller machine withdrawals in the United States. The financial institution may list the $1 fee once under the general heading “ATM withdrawal” required by § 1005.18(b)(2)(iii); in that case, it need not disclose the terms “in-network” or “out-of-network.” ii. A financial institution using the multiple service plan short form disclosure pursuant to § 1005.18(b)(6)(iii)(B)( 2 18(b)(3)(iv) Third-Party Fees in General 1. General prohibition on disclosure of third-party fees in the short form. 18(b)(3)(v) Third-Party Cash Reload Fees 1. Updating third-party fees. 18(b)(3)(vi) Prohibition on Disclosure of Finance Charges 1. No disclosure of finance charges in the short form. See, e.g., 18(b)(4) Long Form Disclosure Content 18(b)(4)(ii) Fees 1. Disclosure of all fees. 2. Disclosure of conditions. 3. Disclosure of a service or feature without a charge. 4. Third-party fees. 18(b)(4)(iii) Statement Regarding Registration and FDIC or NCUA Insurance 1. Statement regarding registration and FDIC or NCUA insurance, including implications thereof. i. Bank disclosure of FDIC insurance. fdic.gov/deposit/deposits/prepaid.html ii. Credit union disclosure of NCUA insurance. 18(b)(4)(vii) Regulation Z Disclosures for Overdraft Credit Features 1. Long form Regulation Z disclosure of overdraft credit features. 2. Updates to the long form for changes to the Regulation Z disclosures. See 18(b)(5) Disclosure Requirements Outside the Short Form Disclosure 1. Content of disclosure. 2. Location of disclosure. 18(b)(6) Form of Pre-Acquisition Disclosures 18(b)(6)(i) General 1. Written pre-acquisition disclosures. 18(b)(6)(i)(B) Electronic Disclosures 1. Providing pre-acquisition disclosures electronically. 2. Disclosures responsive to smaller screens. 3. Machine-readable text. 18(b)(6)(i)(C) Oral Disclosures 1. Disclosures for prepaid accounts acquired by telephone. 18(b)(6)(ii) Retainable Form 1. Retainable disclosures. 18(b)(6)(iii) Tabular Format 18(b)(6)(iii)(B) Multiple Service Plans 18(b)(6)(iii)(B)(1) Short Form Disclosure for Default Service Plan 1. Disclosure of default service plan excludes short-term or promotional service plans. 1 18(b)(6)(iii)(B)(2) Short Form Disclosure for Multiple Service Plans 1. Disclosure of multiple service plans. 2 1 See 2 e.g., 2 18(b)(7) Specific Formatting Requirements for Pre-Acquisition Disclosures 18(b)(7)(i) Grouping 18(b)(7)(i)(B) Long Form Disclosure 1. Conditions must be in close proximity to fee amount. 2. Category of function for finance charges. 18(b)(7)(ii) Prominence and Size 1. Minimum type size. 2. “ Point” refers to printed disclosures and pixel” refers to electronic disclosures. 18(b)(7)(ii)(A) General 1. Contrast required between type color and background of disclosures. 18(b)(7)(iii) Segregation 1. Permitted information outside the short form and long form disclosures. See also 18(b)(8) Terminology of Pre-Acquisition Disclosures 1. Consistent terminology. 18(b)(9) Prepaid Accounts Acquired in Foreign Languages 1. Prepaid accounts acquired in foreign languages. i. Examples of situations in which foreign language disclosures are required. A. The financial institution principally uses a foreign language on the packaging material of a prepaid account sold in a retail location or distributed at a bank or credit union branch, even though a few words appear in English on the packaging. B. The financial institution principally uses a foreign language in a television advertisement for a prepaid account. That advertisement includes a telephone number a consumer can call to acquire the prepaid account, whether by speaking to a customer service representative or interacting with an interactive voice response (IVR) system. C. The financial institution principally uses a foreign language in an online advertisement for a prepaid account. That advertisement includes a website URL through which a consumer can acquire the prepaid account. D. The financial institution principally uses a foreign language on a printed advertisement for a prepaid account. That advertisement includes a telephone number or a website URL a consumer can call or visit to acquire the prepaid account. The pre-acquisition disclosures must be provided to the consumer in that same foreign language prior to the consumer acquiring the prepaid account. E. The financial institution does not principally use a foreign language on prepaid account packaging material nor does it principally use a foreign language to advertise, solicit, or market a prepaid account. A consumer calls the financial institution and has the option to proceed with the prepaid account acquisition process in a foreign language, whether by speaking to a customer service representative or interacting with an IVR system. (But see § 1005.18(b)(9)(i)(C), which limits the obligation to provide foreign language disclosures for payroll card accounts and government benefit accounts acquired orally by telephone in certain circumstances.) F. The financial institution does not principally use a foreign language on prepaid account packaging material nor does it principally use a foreign language to advertise, solicit, or market a prepaid account. A consumer visits the financial institution's website. On that website, the consumer has the option to proceed with the prepaid account acquisition process in a foreign language. ii. Examples of situations in which foreign language disclosures are not required. A. A consumer visits the financial institution's branch location in person and speaks to an employee in a foreign language about acquiring a prepaid account. The consumer proceeds with the acquisition process in that foreign language. B. The financial institution does not principally use a foreign language on prepaid account packaging material nor does it principally use a foreign language to advertise, solicit, or market a prepaid account. A consumer calls the financial institution's customer service line and speaks to a customer service representative in a foreign language. However, if the customer service representative proceeds with the prepaid account acquisition process over the telephone, the financial institution would be required to provide the pre-acquisition disclosures in that foreign language. (But see § 1005.18(b)(9)(i)(C), which limits the obligation to provide foreign language disclosures for payroll card accounts and government benefit accounts acquired orally by telephone in certain circumstances.) C. The financial institution principally uses a foreign language in an advertisement for a prepaid account. That advertisement includes a telephone number a consumer can call to acquire the prepaid account. The consumer calls the telephone number provided on the advertisement and has the option to proceed with the prepaid account acquisition process in English or in a foreign language. The consumer chooses to proceed with the acquisition process in English. D. A consumer calls a government agency to enroll in a government benefits program. The government agency does not offer through its telephone system an option for consumers to proceed in a foreign language. An employee of the government agency assists the consumer with the enrollment process, including helping the consumer acquire a government benefits account. The employee also happens to speak the foreign language in which the consumer is most comfortable communicating, and chooses to communicate with the consumer in that language to facilitate the enrollment process. In this case, the employee offered language interpretation assistance on an informal or ad hoc basis to accommodate the prospective government benefits account holder. 2. Principally used. 3. Advertise, solicit, or market a prepaid account. i. Messages in a leaflet, promotional flyer, newspaper, or magazine. ii. Electronic messages, such as on a website or mobile application. iii. Telephone solicitations. iv. Solicitations sent to the consumer by mail or email. v. Television or radio commercials. 4. Information in the long form disclosure in English. 18(c) Access to Prepaid Account Information 1. Posted transactions. 2. Electronic history. 3. Written history. i. A financial institution may assess a fee or charge to a consumer for responding to subsequent requests for written account transaction history made in a single calendar month. For example, if a consumer requests written account transaction history on June 1 and makes another request on August 5, the financial institution may not assess a fee or charge to the consumer for responding to either request. However, if the consumer requests written account transaction history on June 1 and then makes another request on June 15, the financial institution may assess a fee or charge to the consumer for responding to the request made on June 15, as this is the second response in the same month. ii. If a financial institution maintains more than 24 months of written account transaction history, it may assess a fee or charge to the consumer for providing a written history for transactions occurring more than 24 months preceding the date the financial institution receives the consumer's request, provided the consumer specifically requests the written account transaction history for that time period. iii. If a financial institution offers a consumer the ability to request automatic mailings of written account transaction history on a monthly or other periodic basis, it may assess a fee or charge for such automatic mailings but not for the written account transaction history requested pursuant to § 1005.18(c)(1)(iii). See 4. 12 months of electronic account transaction history. See 5. 24 months of written account transaction history. 6. Periodic statement alternative for unverified prepaid accounts. 7. Inclusion of all fees charged. 8. Summary totals of fees. i. Generally. ii. Third-party fees. 9. Display of summary totals of fees. e.g., 18(e) Modified Limitations on Liability and Error Resolution Requirements 1. Error resolution safe harbor provision. 2. Electronic access. 3. Untimely notice of error. 4. Verification of accounts. 5. Financial institution has not successfully completed verification. 6. Account verification prior to acquisition. 18(f) Disclosure of Fees and Other Information 1. Initial disclosure of fees and other information. e.g., 2. Changes to the Regulation Z disclosures for overdraft credit features. See 3. Web site and telephone number on a prepaid account access device. 18(g) Prepaid Accounts Accessible by Hybrid Prepaid-Credit Cards 1. Covered separate credit feature accessible by a hybrid prepaid-credit card. 2. Asset feature. ii. Section 1005.18(g) applies to account terms, conditions, and features that apply to the asset feature of the prepaid account. Section 1005.18(g) does not apply to the account terms, conditions, or features that apply to the covered separate credit feature, regardless of whether it is structured as a separate credit account or as a credit subaccount of the prepaid account that is separate from the asset feature of the prepaid account. 3. Scope of § 1005.18(g). 4. Variation in account terms, conditions, or features. A. Interest paid on funds deposited into the asset feature of the prepaid account, if any; B. Fees or charges imposed on the asset feature of the prepaid account. See comment 18(g)-5 for additional guidance on how § 1005.18(g) applies to fees or charges imposed on the asset feature of the prepaid account. C. The type of access device provided to the consumer. For instance, an institution may not provide a PIN-only card on prepaid accounts without a covered separate credit feature that is accessible by a hybrid prepaid-credit card, while providing a prepaid card with both PIN and signature-debit functionality for prepaid accounts in the same prepaid account program with such a credit feature; D. Minimum balance requirements on the asset feature of the prepaid account; or E. Account features offered in connection with the asset feature of the prepaid account, such as online bill payment services. 5. Fees. See ii. The following examples illustrate how § 1005.18(g) applies to per transaction fees for each transaction to access funds available in the asset feature of the prepaid account. A. Assume that a consumer has selected a prepaid account program where a covered separate credit feature accessible by a hybrid prepaid-credit card may be offered. For prepaid accounts without such a credit feature, the financial institution charges $0.50 for each transaction conducted that accesses funds available in the prepaid account. For prepaid accounts with a credit feature, the financial institution also charges $0.50 on the asset feature for each transaction conducted that accesses funds available in the asset feature of the prepaid account. In this case, for purposes of § 1005.18(g), the financial institution is imposing the same fee for each transaction that accesses funds in the asset feature of the prepaid account, regardless of whether the prepaid account has a covered separate credit feature accessible by a hybrid prepaid-credit card. Also, with regard to a covered separate credit feature and an asset feature of a prepaid account that are both accessible by a hybrid prepaid-credit card as those terms are defined in Regulation Z, 12 CFR 1026.61, the $0.50 per transaction fee imposed on the asset feature for each transaction that accesses funds available in the asset feature of the prepaid account is not a finance charge under 12 CFR 1026.4(b)(11)(ii). See Regulation Z, 12 CFR 1026.4(b)(11)(ii) and comment 4(b)(11)(ii)-1, for a discussion of the definition of finance charge with respect to fees or charges imposed on the asset feature of a prepaid account with regard to a covered separate credit feature and an asset feature of a prepaid account that are both accessible by a hybrid prepaid-credit card as defined in 12 CFR 1026.61. B. Same facts as in paragraph A, except that for prepaid accounts with a covered separate credit feature, the financial institution imposes a $1.25 fee for each transaction conducted that accesses funds available in the asset feature of the prepaid account. In this case, the financial institution is permitted to charge a higher fee under § 1005.18(g)(2) on prepaid accounts with a covered separate credit feature than it charges on prepaid accounts without such a credit feature. The $0.75 excess is a finance charge under Regulation Z, 12 CFR 1026.4(b)(11)(ii). C. Same facts as in paragraph A, except that for prepaid accounts with a covered separate credit feature, the financial institution imposes a $0.25 fee for each transaction conducted that accesses funds available in the asset feature of the prepaid account. In this case, the financial institution is in violation of § 1005.18(g) because it is imposing a lower fee on the asset feature of a prepaid account with a covered separate credit feature than it imposes on prepaid accounts in the same program without such a credit feature. iii. Where the hybrid prepaid-credit card accesses credit from a covered separate credit feature in the course of authorizing, settling, or otherwise completing a transaction conducted with the card to obtain goods or services, obtain cash, or conduct person-to-person transfers, any per transaction fees imposed on the asset feature of prepaid accounts, including load and transfer fees, with such a credit feature are comparable only to per transaction fees for each transaction to access funds in the asset feature of a prepaid account that are imposed on prepaid accounts in the same prepaid account program that does not have such a credit feature. Per transaction fees for a transaction that is conducted to load or draw funds into a prepaid account from a source other than the funds in the asset feature are not comparable for purposes of § 1005.18(g). To illustrate: A. Assume a financial institution charges $0.50 on prepaid accounts for each transaction that accesses funds in the asset feature of the prepaid accounts without a covered separate credit feature. Also, assume that the financial institution charges $0.50 per transaction on the asset feature of prepaid accounts in the same prepaid program where the hybrid prepaid-credit card accesses credit from a covered separate credit feature in the course of a transaction. In this case, for purposes of § 1005.18(g), the financial institution is imposing the same fee for each transaction it pays, regardless of whether the transaction accesses funds available in the asset feature of the prepaid accounts without a covered separate credit feature, or is paid from credit from a covered separate credit feature in the course of authorizing, settling, or otherwise completing a transaction conducted with the card to obtain goods or services, obtain cash, or conduct person-to-person transfers. Also, for purposes of Regulation Z, 12 CFR 1026.4(b)(11)(ii), the $0.50 per transaction fee imposed on the asset feature of the prepaid account with a covered separate credit feature is not a finance charge. B. Assume same facts as in paragraph A above, except that assume the financial institution charges $1.25 on the asset feature of a prepaid account for each transaction where the hybrid prepaid-credit card accesses credit from the covered separate credit feature in the course of the transaction. The financial institution is permitted to charge the higher fee under § 1005.18(g) for transactions that access the covered separate credit feature in the course of the transaction than the amount of the comparable fee it charges for each transaction that accesses funds available in the asset feature of the prepaid accounts without such a credit feature. The $0.75 excess is a finance charge under Regulation Z, 12 CFR 1026.4(b)(11)(ii). C. Same facts as in paragraph A, except that the financial institution imposes $0.25 on the asset feature of the prepaid account for each transaction conducted where the hybrid prepaid-credit card accesses credit from the covered separate credit feature in the course of the transaction. In this case, the financial institution is in violation of § 1005.18(g) because it is imposing a lower fee on the asset feature of a prepaid account with a covered separate credit feature than the amount of the comparable fee it imposes on prepaid accounts in the same program without such a credit feature. D. Assume a financial institution charges $0.50 on prepaid accounts for each transaction that accesses funds in the asset feature of the prepaid accounts without a covered separate credit feature. Assume also that the financial institution charges both a $0.50 per transaction fee and a $1.25 transfer fee on the asset feature of prepaid accounts in the same prepaid program where the hybrid prepaid-credit card accesses credit from a covered separate credit feature in the course of a transaction. In this case, both fees charged on a per-transaction basis for the credit transaction ( i.e., E. Assume same facts as in paragraph D above, except that assume the financial institution also charges a load fee of $1.25 whenever funds are transferred or loaded from a separate asset account, such as from a deposit account via a debit card, in the course of a transaction on prepaid accounts without a covered separate credit feature, in addition to charging a $0.50 per transaction fee. In this case, both fees charged on a per-transaction basis for the credit transaction ( i.e., i.e., i.e., iv. A consumer may choose in a particular circumstance to draw or transfer credit from the covered separate credit feature outside the course of a transaction conducted with the card to obtain goods or service, obtain cash, or conduct person-to-person transfers. For example, a consumer may use the prepaid card at the financial institution's Web site to load funds from the covered separate credit feature outside the course of a transaction conducted with the card to obtain goods or services, obtain cash, or conduct person-to-person transfers. See A. Assume a financial institution charges a $1.25 load fee to transfer funds from a non-covered separate credit feature, such as a non-covered separate credit card account, into prepaid accounts that do not have a covered separate credit feature and does not charge a fee for a direct deposit of salary from an employer or a direct deposit of government benefits on those prepaid accounts. Assume the financial institution charges $1.25 on the asset feature of a prepaid account with a covered separate credit feature to load funds from the covered separate credit feature outside the course of a transaction. In this case, the load or transfer fees imposed for draws or transfers of credit from the covered separate credit feature outside the course of a transaction ( i.e., i.e., i.e., B. Assume that a financial institution charges a $1.25 load fee for a one-time transfer of funds from a separate asset account, such as from a deposit account via a debit card, to a prepaid account without a covered separate credit feature and does not charge a fee for a direct deposit of salary from an employer or a direct deposit of government benefits on those prepaid accounts. Assume the financial institution charges $1.25 on the asset feature of a prepaid account with a covered separate credit feature to load funds from the covered separate credit feature outside the course of a transaction. In this case, the load or transfer fees imposed for draws or transfers of credit from the covered separate credit feature outside the course of a transaction ( i.e., i.e., i.e., 18(h) Effective Date and Special Transition Rules for Disclosure Provisions 1. Disclosures not on prepaid account access devices and prepaid account packaging materials. 2. Disclosures on prepaid account access devices and prepaid account packaging materials. 3. Form of notice to consumers. 4. Ability to contact the consumer. 5. Closed and inactive prepaid accounts. 6. Account information not available on April 1, 2019. Electronic and written account transaction history. ii. Summary totals of fees. Section 1005.19 Internet Posting of Prepaid Account Agreements 19(a) Definitions 19(a)(1) Agreement 1. Provisions contained in separate documents included. 19(a)(2) Amends 1. Substantive changes. i. Addition or deletion of a provision giving the issuer or consumer a right under the agreement, such as a clause that allows an issuer to unilaterally change the terms of an agreement. ii. Addition or deletion of a provision giving the issuer or consumer an obligation under the agreement, such as a clause requiring the consumer to pay an additional fee. iii. Changes that may affect the cost of the prepaid account to the consumer, such as changes in a provision describing how the prepaid account's monthly fee will be calculated. iv. Changes that may affect how the terms of the agreement are construed or applied, such as changes to a choice of law provision. v. Changes that may affect the parties to whom the agreement may apply, such as changes to provisions regarding authorized users or assignment of the agreement. vi. Changes to the corporate name of the issuer or program manager, or to the issuer's address or identifying number, such as its RSSD ID number or tax identification number. vii. Changes to the list of names of other relevant parties, such as the employer for a payroll card program or the agency for a government benefit program. But see § 1005.19(b)(2)(ii) regarding the timing of submitting such changes to the Bureau. viii. Changes to the name of the prepaid account program to which the agreement applies. 2. Non-substantive changes. i. Correction of typographical errors that do not affect the meaning of any terms of the agreement. ii. Changes to the issuer's corporate logo or tagline. iii. Changes to the format of the agreement, such as conversion to a booklet from a full-sheet format, changes in font, or changes in margins. iv. Reordering sections of the agreement without affecting the meaning of any terms of the agreement. v. Adding, removing, or modifying a table of contents or index. vi. Changes to titles, headings, section numbers, or captions. 19(a)(4) Issuer 1. Issuer. 2. Use of third-party service providers. 3. Third-party websites. 19(a)(6) Offers to the General Public 1. Prepaid accounts offered to limited groups. 2. Prepaid account agreements not offered to the general public. 19(a)(7) Open Account 1. Open account. 19(a)(8) Prepaid Account 1. Prepaid account. 19(b) Submission of Agreements to the Bureau 19(b)(1) Submissions on a Rolling Basis 1. Rolling submission requirement. 2. Prepaid accounts offered in conjunction with multiple issuers. 19(b)(2) Amended Agreements 1. Change-in-terms notices not permissible. 2. Updates to the list of names of other relevant parties to an agreement. i. An issuer first submits to the Bureau a payroll card agreement, along with a list of names of the other relevant parties ( i.e., ii. On January 1, 2020, a change to the payroll card agreement becomes effective reflecting a new feature and accompanying fee that the issuer has added to the program. The issuer is required, by January 31, 2020, to submit to the Bureau its entire revised agreement and an updated list of the names of other relevant parties to that agreement. iii. If the issuer has not added any other employers to the agreement by April 1, 2020, the issuer is not required to submit to the Bureau an updated list of names of other relevant parties to that agreement, because the list it previously submitted to the Bureau remains current. iv. If, however, on March 1, 2020, the issuer adds two new employers under the agreement but makes no other changes to the agreement, then as of April 1 there are new relevant parties to the agreement that the issuer has not submitted to the Bureau. The issuer is required, by May 1, 2020, to submit to the Bureau an updated list of names of other relevant parties to that agreement reflecting the two employers it added in March. Because the issuer has not made any other changes to the agreement since it was submitted in January, the issuer is not required to re-submit the agreement itself by May 1, 2020. 19(b)(3) Withdrawal of Agreements No Longer Offered 1. No longer offers agreement. 19(b)(4) De Minimis Exception 1. Relationship to other exceptions. 2. De minimis exception. 3. Date for determining whether issuer qualifies. 4. Date for determining whether issuer ceases to qualify. 5. Option to withdraw agreements. 19(b)(6) Form and Content of Agreements Submitted to the Bureau 1. Agreements currently in effect. 2. Fee information variations do not constitute separate agreements. 3. Integrated agreement requirement. 19(c) Posting of Agreements Offered to the General Public 1. Requirement applies only to agreements offered to the general public. 2. Issuers that do not otherwise maintain Web sites. 19(d) Agreements for All Open Accounts 1. Requirement applies to all open accounts. 2. Agreements sent to consumers. Section 1005.20 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. 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. See 20(a)(3) General-Use Prepaid Card 1. Redeemable upon presentation at multiple, unaffiliated merchants. 2. Mall gift cards. 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. 20(a)(6) Service Fee 1. Service fees. 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) 1. Examples of excluded products. Paragraph 20(b)(2) 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. 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 traveler's 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 § 1005.20(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 § 1005.20(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 § 1005.20(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 § 1005.20(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 § 1005.20(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. Online sales of prepaid cards. 6. Temporary non-reloadable cards issued in connection with a general-purpose reloadable card. Paragraph 20(b)(4) 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 § 1005.20(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 § 1005.20(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 § 1005.20(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 § 1005.20(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 § 1005.20(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 § 1005.20(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 § 1005.20(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 § 1005.20(b)(4) does not apply. Paragraph 20(b)(5) 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 § 1005.20(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 § 1005.20(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 § 1005.20(b)(5) applies because the bar code or certificate number is issued in paper form only. iv. An online 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 § 1005.20(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) 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 § 1005.20(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 § 1005.20(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 § 1005.20(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 § 1005.20(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 § 1005.20, unless a different exclusion applies. 20(c) Form of Disclosures 20(c)(1) Clear and Conspicuous 1. Clear and conspicuous standard. 2. Abbreviations and symbols. 20(c)(2) Format 1. Electronic disclosures. et seq.). 20(c)(3) Disclosure Prior to Purchase 1. Method of purchase. 2. Electronic disclosures. 3. Non-physical certificates and cards. See also 20(c)(4) Disclosures on the Certificate or Card 1. Non-physical certificates and cards. 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 § 1005.20(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 §§ 1005.20(d)(2) and (c)(3). 3. Relationship between §§ 1005.20(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 §§ 1005.20(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 §§ 1005.20(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. Section 1005.30—Remittance Transfer Definitions 1. Applicability of definitions in subpart A. 30(b) Business Day 1. General. 2. Substantially all business functions. 3. Short hours. 4. Telephone line. 30(c) Designated Recipient 1. Person. See 2. Location in a foreign country. ii. For transfers to a prepaid account (other than a prepaid account that is a payroll card account or a government benefit account), where the funds are to be received in a location physically outside of any State depends on whether the provider at the time the transfer is requested has information indicating that funds are to be received in a foreign country. See comments 30(c)-2.iii and 30(e)-3.i.C for illustrations of when a remittance transfer provider would have such information and when the provider would not. For transfers to all other accounts, whether funds are to be received at a location physically outside of any State depends on where the account is located. If the account is located in a State, the funds will not be received at a location in a foreign country. Further, for these accounts, if they are located on a U.S. military installation that is physically located in a foreign country, then these accounts are located in a State. iii. Where the sender does not specify information about a designated recipient's account, but instead provides information about the recipient, a remittance transfer provider may make the determination of whether the funds will be received at a location in a foreign country on information that is provided by the sender, and other information the provider may have, at the time the transfer is requested. For example, if a consumer in a State gives a provider the recipient's email address, and the provider has no other information about whether the funds will be received by the recipient at a location in a foreign country, then the provider may determine that funds are not to be received at a location in a foreign country. However, if the provider at the time the transfer is requested has additional information indicating that funds are to be received in a foreign country, such as if the recipient's email address is already registered with the provider and associated with a foreign account, then the provider has sufficient information to conclude that the remittance transfer will be received at a location in a foreign country. Similarly, if a consumer in a State purchases a prepaid card, and the provider mails or delivers the card directly to the consumer, the provider may conclude that funds are not to be received in a foreign country, because the provider does not know whether the consumer will subsequently send the prepaid card to a recipient in a foreign country. In contrast, the provider has sufficient information to conclude that the funds are to be received in a foreign country if the remittance transfer provider sends a prepaid card to a specified recipient in a foreign country, even if a person located in a State, including the sender, retains the ability to access funds on the prepaid card. 3. Sender as designated recipient. 30(d) Preauthorized Remittance Transfer 1. Advance authorization. 30(e) Remittance Transfer 1. Electronic transfer of funds. 2. Sent by a remittance transfer provider. ii. A payment card network or other third party payment service that is functionally similar to a payment card network does not send a remittance transfer when a consumer provides a debit, credit or prepaid card directly to a foreign merchant as payment for goods or services. In such a case, the payment card network or third party payment service is not directly engaged with the sender to send a transfer of funds to a person in a foreign country; rather, the network or third party payment service is merely providing contemporaneous third-party payment processing and settlement services on behalf of the merchant or the card issuer, rather than on behalf of the sender. In such a case, the card issuer also is not directly engaged with the sender to send an electronic transfer of funds to the foreign merchant when the card issuer provides payment to the merchant. Similarly, where a consumer provides a checking or other account number, or a debit, credit or prepaid card, directly to a foreign merchant as payment for goods or services, the merchant is not acting as an intermediary that sends a transfer of funds on behalf of the sender when it submits the payment information for processing. iii. However, a card issuer or a payment network may offer a service to a sender where the card issuer or a payment network is an intermediary that is directly engaged with the sender to obtain funds using the sender's debit, prepaid or credit card and to send those funds to a recipient's checking account located in a foreign country. In this case, the card issuer or the payment network is an intermediary that is directly engaged with the sender to send an electronic transfer of funds on behalf of the sender, and this transfer of funds is a remittance transfer because it is made to a designated recipient. See 3. Examples of remittance transfers. i. Examples of remittance transfers include: A. Transfers where the sender provides cash or another method of payment to a money transmitter or financial institution and requests that funds be sent to a specified location or account in a foreign country. B. Consumer wire transfers, where a financial institution executes a payment order upon a sender's request to wire money from the sender's account to a designated recipient. C. An addition of funds to a prepaid card by a participant in a prepaid card program, such as a prepaid card issuer or its agent, that is directly engaged with the sender to add these funds, where the prepaid card is sent or was previously sent by a participant in the prepaid card program to a person in a foreign country, even if a person located in a State (including a sender) retains the ability to withdraw such funds. D. International ACH transactions sent by the sender's financial institution at the sender's request. E. Online bill payments and other electronic transfers that a sender schedules in advance, including preauthorized remittance transfers, made by the sender's financial institution at the sender's request to a designated recipient. ii. The term remittance transfer does not include, for example: A. A consumer's provision of a debit, credit or prepaid card, directly to a foreign merchant as payment for goods or services because the issuer is not directly engaged with the sender to send an electronic transfer of funds to the foreign merchant when the issuer provides payment to the merchant. See B. A consumer's deposit of funds to a checking or savings account located in a State, because there has not been a transfer of funds to a designated recipient. See C. Online bill payments and other electronic transfers that senders can schedule in advance, including preauthorized transfers, made through the Web site of a merchant located in a foreign country and via direct provision of a checking account, credit card, debit card or prepaid card number to the merchant, because the financial institution is not directly engaged with the sender to send an electronic transfer of funds to the foreign merchant when the institution provides payment to the merchant. See 30(f) Remittance Transfer Provider 1. Agents. 2. Normal course of business. General. ii. Safe harbor. iii. Transition period. iv. Examples. Example of safe harbor and transition period for 100-transfer safe harbor threshold effective prior to July 21, 2020. i.e., B. Example of safe harbor for a person that provided 500 or fewer transfers in 2019 and provides 500 or fewer transfers in 2020. See C. Example of safe harbor and transition period for the 500-transfer safe harbor threshold beginning on July 21, 2020. i.e., v. Continued compliance for transfers for which payment was made before a person qualifies for the safe harbor. 3. Multiple remittance transfer providers. 30(g) Sender 1. Determining whether a consumer is located in a State. 2. Personal, family, or household purposes. 3. Non-consumer accounts. bona fide 30(h) Third-Party Fees 1. Fees imposed on the remittance transfer. 2. Covered third-party fees. ii. Examples of covered third-party fees include: A. Fees imposed on a remittance transfer by intermediary institutions in connection with a wire transfer (sometimes referred to as “lifting fees”). B. Fees imposed on a remittance transfer by an agent of the provider at pick-up for receiving the transfer. 3. Non-covered third-party fees. See also Section 1005.31—Disclosures 31(a) General Form of Disclosures 31(a)(1) Clear and Conspicuous 1. Clear and conspicuous standard. 2. Abbreviations and symbols. 31(a)(2) Written and Electronic Disclosures 1. E-Sign Act requirements. et seq. See 2. Paper size. 3. Retainable electronic disclosures. 4. Pre-payment disclosures to a mobile telephone. 5. Disclosures provided by fax. i.e., 31(a)(3) Disclosures for Oral Telephone Transactions 1. Transactions conducted partially by telephone. 2. Oral telephone transactions. 31(a)(5) Disclosures for Mobile Application or Text Message Transactions 1. Mobile application and text message transactions. 31(b) Disclosure Requirements 1. Disclosures provided as applicable. 2. Substantially similar terms, language, and notices. 31(b)(1) Pre-Payment Disclosures 1. Fees and taxes. See ii. The fees and taxes required to be disclosed by § 1005.31(b)(1)(ii) include all fees imposed and all taxes collected on the remittance transfer by the provider. For example, a provider must disclose any service fee, any fees imposed by an agent of the provider at the time of the transfer, and any State taxes collected on the remittance transfer at the time of the transfer. Fees imposed on the remittance transfer by the provider required to be disclosed under § 1005.31(b)(1)(ii) include only those fees that are charged to the sender and are specifically related to the remittance transfer. See also iii. The term used to describe the fees imposed on the remittance transfer by the provider in § 1005.31(b)(1)(ii) and the term used to describe covered third-party fees under § 1005.31(b)(1)(vi) must differentiate between such fees. For example the terms used to describe fees disclosed under § 1005.31(b)(1)(ii) and (vi) may not both be described solely as “Fees.” 2. Transfer amount. 3. Exchange rate for calculation. 31(b)(1)(iv) Exchange Rate 1. Applicable exchange rate. 2. Rounding. 3. Exchange rate used. 31(b)(1)(vi) Disclosure of Covered Third-Party Fees 1. Fees disclosed in the currency in which the funds will be received. 31(b)(1)(vii) Amount Received 1. Amount received. 31(b)(1)(viii) Statement When Additional Fees and Taxes May Apply 1. Required disclaimer when non-covered third-party fees and taxes collected by a person other than the provider may apply. See 2. Optional disclosure of non-covered third-party fees and taxes collected by a person other than the provider. See See 31(b)(2) Receipt 1. Date funds will be available. 2. Agencies required to be disclosed. 3. State agency that licenses or charters a provider. 4. Web site of the Consumer Financial Protection Bureau. www.consumerfinance.gov, consumerfinance.gov/sending-money consumerfinance.gov/envios. 5. Date of transfer on receipt. 6. Transfer date disclosures. i.e., 7. Cancellation disclosure. 31(b)(3) Combined Disclosure 1. Proof of payment. 2. Confirmation of scheduling. 31(c) Specific Format Requirements 31(c)(1) Grouping 1. Grouping. 31(c)(4) Segregation 1. Segregation. 2. Directly related. i. The date and time of the transaction; ii. The sender's name and contact information; iii. The location at which the designated recipient may pick up the funds; iv. The confirmation or other identification code; v. A company name and logo; vi. An indication that a disclosure is or is not a receipt or other indicia of proof of payment; vii. A designated area for signatures or initials; viii. A statement that funds may be available sooner, as permitted by § 1005.31(b)(2)(ii); ix. Instructions regarding the retrieval of funds, such as the number of days the funds will be available to the recipient before they are returned to the sender; and x. A statement that the provider makes money from foreign currency exchange. xi. Disclosure of any non-covered third-party fees and any taxes collected by a person other than the provider pursuant to § 1005.31(b)(1)(viii). 31(d) Estimates 1. Terms. 31(e) Timing 1. Request to send a remittance transfer. See 2. When payment is made. 3. Telephone transfer from an account. 4. Mobile application and text message transactions. 5. Statement about cancellation rights. 31(f) Accurate When Payment Is Made 1. No guarantee of disclosures provided before payment. 31(g) Foreign Language Disclosures 1. Number of foreign languages used in written disclosure. i. A remittance transfer provider principally uses only Spanish and Vietnamese to advertise, solicit, or market remittance transfer services at a particular office. The remittance transfer provider may provide all senders with disclosures in English, Spanish, and Vietnamese, regardless of the language the sender uses with the remittance transfer provider to conduct the transaction or assert an error. ii. Same facts as i. If a sender primarily uses Spanish with the remittance transfer provider to conduct a transaction or assert an error, the remittance transfer provider may provide a written or electronic disclosure in English and Spanish, whether in a single document or two separate documents. If the sender primarily uses English with the remittance transfer provider to conduct the transaction or assert an error, the remittance transfer provider may provide a written or electronic disclosure solely in English. If the sender primarily uses a foreign language with the remittance transfer provider to conduct the transaction or assert an error that the remittance transfer provider does not use to advertise, solicit, or market either orally, in writing, or electronically, at the office in which the sender conducts the transaction or asserts the error, respectively, the remittance transfer provider may provide a written or electronic disclosure solely in English. 2. Primarily used. i. A sender initiates a conversation with a remittance transfer provider with a greeting in English and expresses interest in sending a remittance transfer to Mexico in English. If the remittance transfer provider thereafter communicates with the sender in Spanish and the sender conveys the other information needed to complete the transaction, including the designated recipient's information and the amount and funding source of the transfer, in Spanish, then Spanish is the language primarily used by the sender with the remittance transfer provider to conduct the transaction. ii. A sender initiates a conversation with the remittance transfer provider with a greeting in English and states in English that there was a problem with a prior remittance transfer to Vietnam. If the remittance transfer provider thereafter communicates with the sender in Vietnamese and the sender uses Vietnamese to convey the information required by § 1005.33(b) to assert an error, then Vietnamese is the language primarily used by the sender with the remittance transfer provider to assert the error. iii. A sender accesses the Web site of a remittance transfer provider that may be used by senders to conduct remittance transfers or assert errors. The Web site is offered in English and French. If the sender uses the French version of the Web site to conduct the remittance transfer, then French is the language primarily used by the sender with the remittance transfer provider to conduct the transaction. 31(g)(1) General 1. Principally used. A. The frequency with which the foreign language is used in advertising, soliciting, or marketing of remittance transfer services at that office; B. The prominence of the advertising, soliciting, or marketing of remittance transfer services in that foreign language at that office; and C. The specific foreign language terms used in the advertising soliciting, or marketing of remittance transfer service at that office. ii. For example, if a remittance transfer provider posts several prominent advertisements in a foreign language for remittance transfer services, including rate and fee information, on a consistent basis in an office, the provider is creating an expectation that a consumer could receive information on remittance transfer services in the foreign language used in the advertisements. The foreign language used in such advertisements would be considered to be principally used at that office based on the frequency and prominence of the advertising. In contrast, an advertisement for remittance transfer services, including rate and fee information, that is featured prominently at an office and is entirely in English, except for a greeting in a foreign language, does not create an expectation that a consumer could receive information on remittance transfer services in the foreign language used for such greeting. The foreign language used in such an advertisement is not considered to be principally used at that office based on the incidental specific foreign language term used. 2. Advertise, solicit, or market. A. Messages in a foreign language in a leaflet or promotional flyer at an office. B. Announcements in a foreign language on a public address system at an office. C. On-line messages in a foreign language, such as on the internet. D. Printed material in a foreign language on any exterior or interior sign at an office. E. Point-of-sale displays in a foreign language at an office. F. Telephone solicitations in a foreign language. ii. Examples illustrating use of a foreign language for purposes other than to advertise, solicit, or market include: A. Communicating in a foreign language (whether by telephone, electronically, or otherwise) about remittance transfer services in response to a consumer-initiated inquiry. B. Making disclosures in a foreign language that are required by Federal or other applicable law. 3. Office. 4. At the office. Section 1005.32—Estimates 1. Disclosures where estimates can be used. 32(a) Temporary Exception for Insured Institutions 32(a)(1) General 1. Control. 2. Examples of scenarios that qualify for the temporary exception. i. Exchange rate. ii. Covered third-party fees. 3. Examples of scenarios that do not qualify for the temporary exception. i. Exchange rate. ii. Covered third-party fees. 32(b) Permanent Exceptions 32(b)(1) Permanent Exceptions for Transfers to Certain Countries 1. Laws of the recipient country. i. Set by the government of the recipient country after the remittance transfer provider sends the remittance transfer or ii. Set when the designated recipient receives the funds. 2. Example illustrating when exact amounts can and cannot be determined because of the laws of the recipient country. i. The laws of the recipient country do not permit a remittance transfer provider to determine the exact exchange rate required to be disclosed under § 1005.31(b)(1)(iv) when, for example, the government of the recipient country, on a daily basis, sets the exchange rate that must, by law, apply to funds received and the funds are made available to the designated recipient in the local currency the day after the remittance transfer provider sends the remittance transfer. ii. In contrast, the laws of the recipient country permit a remittance transfer provider to determine the exact exchange rate required to be disclosed under § 1005.31(b)(1)(iv) when, for example, the government of the recipient country ties the value of its currency to the U.S. dollar. 3. Method by which transactions are made in the recipient country. 4. Example illustrating when exact amounts can and cannot be determined because of the method by which transactions are made in the recipient country. i. The method by which transactions are made in the recipient country does not permit a remittance transfer provider to determine the exact exchange rate required to be disclosed under § 1005.31(b)(1)(iv) when the provider sends a remittance transfer via international ACH on terms negotiated between the United States government and the recipient country's government, under which the exchange rate is a rate set by the recipient country's central bank on the business day after the provider has sent the remittance transfer. ii. In contrast, a remittance transfer provider would not qualify for the § 1005.32(b)(1)(i)(B) methods exception if it sends a remittance transfer via international ACH on terms negotiated between the United States government and a private-sector entity or entities in the recipient country, under which the exchange rate is set by the institution acting as the entry point to the recipient country's payments system on the next business day. However, a remittance transfer provider sending a remittance transfer using such a method may qualify for the § 1005.32(a) temporary exception or the exception set forth in § 1005.32(b)(4). iii. A remittance transfer provider would not qualify for the § 1005.32(b)(1)(i)(B) methods exception if, for example, it sends a remittance transfer via international ACH on terms negotiated between the United States government and the recipient country's government, under which the exchange rate is set by the recipient country's central bank or other governmental authority before the sender requests a transfer. 5. Safe harbor list. 6. Reliance on Bureau list of countries. 7. Change in laws of recipient country. i. If the laws of a recipient country change such that a remittance transfer provider can determine exact amounts, the remittance transfer provider must begin providing exact amounts for the required disclosures as soon as reasonably practicable if the provider has information that the country legally permits the provider to determine exact disclosure amounts. ii. If the laws of a recipient country change such that a remittance transfer provider cannot determine exact disclosure amounts, the remittance transfer provider may provide estimates under § 1005.32(b)(1)(i), even if that country does not appear on the list published by the Bureau. 2. Example illustrating when exact amounts can and cannot be determined because of the laws of the recipient country. i. The laws of the recipient country do not permit a remittance transfer provider to determine the exact exchange rate required to be disclosed under § 1005.31(b)(1)(iv) when, for example, the government of the recipient country, on a daily basis, sets the exchange rate that must, by law, apply to funds received and the funds are made available to the designated recipient in the local currency the day after the remittance transfer provider sends the remittance transfer. ii. In contrast, the laws of the recipient country permit a remittance transfer provider to determine the exact exchange rate required to be disclosed under § 1005.31(b)(1)(iv) when, for example, the government of the recipient country ties the value of its currency to the U.S. dollar. 3. Method by which transactions are made in the recipient country. 4. Example illustrating when exact amounts can and cannot be determined because of the method by which transactions are made in the recipient country. i. The method by which transactions are made in the recipient country does not permit a remittance transfer provider to determine the exact exchange rate required to be disclosed under § 1005.31(b)(1)(iv) when the provider sends a remittance transfer via international ACH on terms negotiated between the United States government and the recipient country's government, under which the exchange rate is a rate set by the recipient country's central bank on the business day after the provider has sent the remittance transfer. ii. In contrast, a remittance transfer provider would not qualify for the § 1005.32(b)(1)(i)(B) methods exception if it sends a remittance transfer via international ACH on terms negotiated between the United States government and a private-sector entity or entities in the recipient country, under which the exchange rate is set by the institution acting as the entry point to the recipient country's payments system on the next business day. However, a remittance transfer provider sending a remittance transfer using such a method may qualify for the § 1005.32(a) temporary exception. iii. A remittance transfer provider would not qualify for the § 1005.32(b)(1)(i)(B) methods exception if, for example, it sends a remittance transfer via international ACH on terms negotiated between the United States government and the recipient country's government, under which the exchange rate is set by the recipient country's central bank or other governmental authority before the sender requests a transfer. 5. Safe harbor list. 6. Reliance on Bureau list of countries. 7. Change in laws of recipient country. ii. If the laws of a recipient country change such that a remittance transfer provider cannot determine exact disclosure amounts, the remittance transfer provider may provide estimates under § 1005.32(b)(1)(i), even if that country does not appear on the list published by the Bureau. 32(b)(2) Permanent Exceptions for Transfers Scheduled Before the Date of Transfer 1. Fixed amount of foreign currency. i.e., i.e., i.e., 2. Relationship to § 1005.10(d). 32(b)(3) Permanent Exception for Optional Disclosure of Non-Covered Third-Party Fees and Taxes Collected on the Remittance Transfer by a Person Other Than the Provider 1. Reasonable sources of information. 32(b)(4) Permanent Exception for Estimation of the Exchange Rate by an Insured Institution 1. Determining the exact exchange rate. i. Example where an insured institution cannot determine the exact exchange rate. A. An insured institution or its service provider does not set the exchange rate required to be disclosed under § 1005.31(b)(1)(iv), and the rate is set when the funds are deposited into the recipient's account by the designated recipient's institution that does not have a correspondent relationship with, and does not act as an agent of, the insured institution. ii. Examples where an insured institution can determine the exact exchange rate. A. An insured institution has a correspondent relationship with an intermediary financial institution (or the intermediary financial institution acts as an agent of the insured institution) and that intermediary financial institution sets the exchange rate required to be disclosed under § 1005.31(b)(1)(iv) for a remittance transfer. B. An insured institution or its service provider converts the funds into the local currency to be received by the designated recipient for a remittance transfer using an exchange rate that the insured institution or its service provider sets. The insured institution can determine the exact exchange rate for purposes of § 1005.32(b)(4)(i)(B) for the remittance transfer even if the insured institution does not have a correspondent relationship with an intermediary financial institution in the transmittal route or the designated recipient's institution, and an intermediary financial institution in the transmittal route or the designed recipient's institution does not act as an agent of the insured institution. 2. Threshold. i. The number of remittance transfers provided includes transfers in the prior calendar year to that country when the designated recipients of those transfers received funds in the country's local currency regardless of whether the exchange rate was estimated for those transfers. For example, an insured institution exceeds the 1,000-transfer threshold in the prior calendar year if the insured institution provided 700 remittance transfers to a country in the prior calendar year when the designated recipients of those transfers received funds in the country's local currency when the exchange rate was estimated for those transfers and also sends 400 remittance transfers to the same country in the prior calendar year when the designated recipients of those transfers received funds in the country's local currency and the exchange rate for those transfers was not estimated. ii. The number of remittance transfers does not include remittance transfers to a country in the prior calendar year when the designated recipients of those transfers did not receive the funds in the country's local currency. For example, an insured institution does not exceed the 1,000-transfer threshold in the prior calendar year if the insured institution provides 700 remittance transfers to a country in the prior calendar year when the designated recipients of those transfers received funds in the country's local currency and also sends 400 remittance transfers to the same country in the prior calendar year when the designated recipients of those transfers did not receive funds in the country's local currency. 3. Transition period. 32(b)(5) Permanent Exception for Estimation of Covered Third-Party Fees by an Insured Institution 1. Insured institution cannot determine the exact covered third-party fees. i. The insured institution does not have a correspondent relationship with the designated recipient's institution; ii. The designated recipient's institution does not act as an agent of the insured institution; iii. The insured institution does not have an agreement with the designated recipient's institution with respect to the imposition of covered third-party fees on the remittance transfer ( e.g., iv. The insured institution does not know at the time the disclosures are given that the only intermediary financial institutions that will impose covered third-party fees on the transfer are those institutions that have a correspondent relationship with or act as an agent for the insured institution, or have otherwise agreed upon the covered third-party fees with the insured institution. 2. Insured institution can determine the exact covered third-party fees. i. An insured institution has a correspondent relationship with the designated recipient's institution; ii. The designated recipient's institution acts as an agent of the insured institution; iii. An insured institution has an agreement with the designated recipient's institution with respect to the imposition of covered third-party fees on the remittance transfer; or iv. An insured institution knows at the time the disclosures are given that the only intermediary financial institutions that will impose covered third-party fees on the transfer are those institutions that have a correspondent relationship with or act as an agent for the insured institution, or have otherwise agreed upon the covered third-party fees with the insured institution. 3. Threshold. i. The number of remittance transfers provided includes remittance transfers in the prior calendar year to that designated recipient's institution regardless of whether the covered third-party fees were estimated for those transfers. For example, an insured institution exceeds the 500-transfer threshold in the prior calendar year if an insured institution provides 300 remittance transfers to the designated recipient's institution in the prior calendar year when the covered third-party fees were estimated for those transfers and also sends 400 remittance transfers to the designated recipient's institution in the prior calendar year and the covered third-party fees for those transfers were not estimated. ii. The number of remittance transfers includes remittance transfers provided to the designated recipient's institution in the prior calendar year regardless of whether the designated recipients received the funds in the country's local currency or in another currency. For example, an insured institution exceeds the 500-transfer threshold in the prior calendar year if the insured institution provides 300 remittance transfers to the designated recipient's institution in the prior calendar year when the designated recipients of those transfers received funds in the country's local currency and also sends 400 remittance transfers to the same designated recipient's institution in the prior calendar year when the designated recipients of those transfers did not receive funds in the country's local currency. iii. The number of remittance transfers includes remittance transfers provided to the designated recipient's institution and any of its branches in the country to which the particular transfer described in § 1005.32(b)(5) is being sent. For example, if the particular remittance transfer described in § 1005.32(b)(5) is being sent to the designated recipient's institution Bank XYZ in Nigeria, the number of remittance transfers for purposes of the 500-transfer threshold would include remittances transfers in the previous calendar year that were sent to Bank XYZ, or to its branches, in Nigeria. The 500-transfer threshold would not include remittance transfers that were sent to branches of Bank XYZ that were located in any country other than Nigeria. 4. United States Federal statute or regulation. i. Prohibits the insured institution from disclosing exact covered third-party fees in disclosures for transfers to a designated recipient's institution; or ii. Makes it infeasible for the insured institution to form a relationship with the designated recipient's institution and that relationship is necessary for the insured institution to be able to determine, at the time it must provide the applicable disclosures, exact covered third-party fees. 5. Transition period. 32(c) Bases for Estimates 32(c)(1) Exchange Rate 1. Most recent exchange rate for qualifying international ACH transfers. i.e., 2. Publicly available. 3. Spread. 4. Most recent. 32(c)(3) Covered Third-Party Fees 1. Potential transmittal routes. 32(d) Bases for Estimates for Transfers Scheduled Before the Date of Transfer 1. In general. Section 1005.33—Procedures for Resolving Errors 33(a) Definition of Error 1. Incorrect amount of currency paid by sender. 2. Incorrect amount of currency received—coverage. 3. Incorrect amount of currency received—examples. i. A consumer requests to send funds to a relative in Mexico to be received in local currency. Upon receiving the sender's payment, the remittance transfer provider provides a receipt indicating that the amount of currency that will be received by the designated recipient will be 1180 Mexican pesos, after fees and taxes are applied. However, when the relative picks up the transfer in Mexico a day later, he only receives 1150 Mexican pesos because the exchange rate applied by the recipient agent in Mexico was lower than the exchange rate used by the provider, prior to any rounding of the exchange rate, to disclose the amount of currency to be received by the designated recipient on the receipt. Because the designated recipient has received less than the amount of currency disclosed on the receipt, an error has occurred. ii. A consumer requests to send funds to a relative in Colombia to be received in local currency. The remittance transfer provider provides the sender a receipt stating an amount of currency that will be received by the designated recipient, which does not reflect the additional foreign taxes that will be collected in Colombia on the transfer but does include the statement required by § 1005.31(b)(1)(viii). If the designated recipient will receive less than the amount of currency disclosed on the receipt due solely to the additional foreign taxes that the provider was not required to disclose, no error has occurred. iii. Same facts as in ii., except that the receipt provided by the remittance transfer provider does not reflect additional fees that are imposed by the receiving agent in Colombia on the transfer. Because the designated recipient will receive less than the amount of currency disclosed in the receipt due to the additional covered third-party fees, an error has occurred. iv. A consumer requests to send US$250 to a relative in India to a U.S. dollar-denominated account held by the relative at an Indian bank. Instead of the US$250 disclosed on the receipt as the amount to be sent, the remittance transfer provider sends US$200, resulting in a smaller deposit to the designated recipient's account than was disclosed as the amount to be received after fees and taxes. Because the designated recipient received less than the amount of currency that was disclosed, an error has occurred. v. A consumer requests to send US$100 to a relative in a foreign country to be received in local currency. The remittance transfer provider provides the sender a receipt that discloses an estimated exchange rate, other taxes, and amount of currency that will be received due to the law in the foreign country requiring that the exchange rate be set by the foreign country's central bank. When the relative picks up the remittance transfer, the relative receives less currency than the estimated amount disclosed to the sender on the receipt due to application of the actual exchange rate, fees, and taxes, rather than any estimated amounts. Because § 1005.32(b) permits the remittance transfer provider to disclose an estimate of the amount of currency to be received, no error has occurred unless the estimate was not based on an approach set forth under § 1005.32(c). vi. A sender requests that his bank send US$120 to a designated recipient's account at an institution in a foreign country. The foreign institution is not an agent of the provider. Only US$100 is deposited into the designated recipient's account because the recipient institution imposed a US$20 incoming wire fee and deducted the fee from the amount transferred. Because this fee is a non-covered third-party fee that the provider is not required to disclose under § 1005.31(b)(1)(vi), no error has occurred if the provider provided the disclosure required by § 1005.31(b)(1)(viii). 4. Incorrect amount of currency received—extraordinary circumstances. 5. Failure to make funds available by disclosed date of availability—coverage. i. Late or non-delivery of a remittance transfer; ii. Delivery of funds to the wrong account; iii. The fraudulent pick-up of a remittance transfer in a foreign country by a person other than the designated recipient; iv. The recipient agent or institution's retention of the remittance transfer, instead of making the funds available to the designated recipient. 6. Failure to make funds available by disclosed date of availability—extraordinary circumstances. 7. Failure to make funds available by disclosed date of availability—fraud and other screening procedures. 8. Sender account number or recipient institution identifier error. 9. Account number or recipient institution identifier. 10. Recipient-requested changes. 11. Change from disclosure made in reliance on sender information. See, e.g., 33(b) Notice of Error From Sender 1. Person asserting or discovering error. 2. Content of error notice. 3. Address on notice of error. 4. Effect of late notice. 5. Notice of error provided to agent. 6. Consumer notice of error resolution rights. 33(c) Time Limits and Extent of Investigation 1. Notice to sender of finding of error. 2. Incorrect or insufficient information provided for transfer. See 3. Designation of requested remedy. 4. Default remedy. 5. Amount appropriate to resolve the error. 1 2 6. Form of refund. 1 7. Remedies for incorrect amount paid. 8. Correction of an error if funds not available by disclosed date. 9. Charges for error resolution. 10. Correction without investigation. 11. Procedure for sending a new remittance transfer after a sender provides incorrect or insufficient information. 12. Determining amount of refund. i. A sender instructs a remittance transfer provider to send US$100 to a designated recipient in local currency, for which the provider charges a transfer fee of US$10 (and thus the sender pays the provider $110). The provider's correspondent imposes a fee of US$15 that it deducts from the amount of the transfer. The sender provides incorrect or insufficient information that results in non-delivery of the remittance transfer as requested. Once the provider determines that an error occurred because the sender provided incorrect or insufficient information, the provider must provide the report required by § 1005.33(c)(1) or (d)(1) and inform the sender, pursuant to § 1005.33(c)(1) or (d)(1), that it will refund US$95 to the sender within three business days, unless the sender chooses to apply the US$95 towards a new remittance transfer and the provider agrees. Of the $95 that is refunded to the sender, $10 reflects the refund of the provider's transfer fee, and $85 reflects the refund of the amount of funds provided by the sender in connection with the transfer which was not properly transmitted. The provider is not required to refund the US$15 fee imposed by the correspondent (unless the $15 will be refunded to the provider by the correspondent). ii. A sender instructs a remittance transfer provider to send US$100 to a designated recipient in a foreign country, for which the provider charges a transfer fee of US$10 (and thus the sender pays the provider US$110) and an intermediary institution charges a lifting fee of US$5, such that the designated recipient is expected to receive only US$95, as indicated in the receipt. If an error occurs because the sender provides incorrect or insufficient information that results in non-delivery of the remittance transfer by the date of availability stated in the disclosure provided to the sender for the remittance transfer under § 1005.31(b)(2) or (3), the provider is required to refund, or reapply if requested and the provider agrees, $105 unless the intermediary institution refunds to the provider the US$5 fee. If the sender requests to have the transfer amount applied to a new remittance transfer pursuant to § 1005.33(c)(2)(iii) and provides the corrected or additional information, and the remittance transfer provider agrees to a resend remedy, the remittance transfer provider may charge the sender another transfer fee of US$10 to send the remittance transfer again with the corrected or additional information necessary to complete the transfer. Insofar as the resend is an entirely new remittance transfer, the provider must provide a prepayment disclosure and receipt or combined disclosure in accordance with, among other provisions, the timing requirements of § 1005.31(f) and the cancellation provision of § 1005.34(a). iii. In connection with a remittance transfer, a provider imposes a $15 tax that it then remits to a State taxing authority. An error occurs because the sender provided incorrect or insufficient information that resulted in non-delivery of the transfer to the designated recipient. The provider may deduct $15 from the amount it refunds to the sender pursuant to § 1005.33(c)(2)(iii) unless the relevant tax law will result in the $15 tax being refunded to the provider by the State taxing authority because the transfer was not completed. 33(d) Procedures if Remittance Transfer Provider Determines No Error or Different Error Occurred 1. Error different from that alleged. 33(e) Reassertion of Error 1. Withdrawal of error; right to reassert. 33(f) Relation to Other Laws 1. Concurrent error obligations. 2. Holder in due course. 3. Assertion of same error with multiple parties. 33(g) Error Resolution Standards and Recordkeeping Requirements 1. Record retention requirements. 33(h) Incorrect Account Number Supplied 1. Reasonable methods of verification. 2. Reasonable efforts. i. The remittance transfer provider promptly calls or otherwise contacts the institution that received the transfer, either directly or indirectly through any correspondent(s) or other intermediaries or service providers used for the particular transfer, to request that the amount that was to be received by the designated recipient be returned, and if required by law or contract, by requesting that the recipient institution obtain a debit authorization from the holder of the incorrectly credited account. ii. The remittance transfer provider promptly uses a messaging service through a funds transfer system to contact institution that received the transfer, either directly or indirectly through any correspondent(s) or other intermediaries or service providers used for the particular transfer, to request that the amount that was to be received by the designated recipient be returned, in accordance with the messaging service's rules and protocol, and if required by law or contract, by requesting that the recipient institution obtain a debit authorization from the holder of the incorrectly credited account. 3. Promptness of Reasonable Efforts. Section 1005.34—Procedures for Cancellation and Refund of Remittance Transfers 34(a) Sender Right of Cancellation and Refund 1. Content of cancellation request. 2. Notice of cancellation right. 3. Thirty-minute cancellation right. 4. Cancellation request provided to agent. 5. Payment made. 34(b) Time Limits and Refund Requirements 1. Form of refund. 2. Fees and taxes refunded. Section 1005.35—Acts of Agents 1. General. Section 1005.36—Transfers Scheduled Before the Date of Transfer 1. Applicability of subpart B. 36(a) Timing 36(a)(2) Subsequent Preauthorized Remittance Transfers 1. Changes in Disclosures. 2. Clearly and conspicuously. 3. Reasonable time. 36(b) Accuracy 1. Use of estimates. 2. Subsequent preauthorized remittance transfers. 3. Receipts. 36(c) Cancellation 1. Scheduled remittance transfer. i. A sender on March 1 requests a remittance transfer provider to send a wire transfer to pay a bill in a foreign country on March 3. ii. A sender on March 1 requests that a remittance transfer provider send a remittance transfer on March 15, but the provider requires the sender to confirm the request on March 14 in order to send the transfer. iii. A sender on March 1 requests that a remittance transfer provider send an ACH transfer, and that transfer is sent on March 2, but due to the time required for processing, funds will not be deducted from the sender's account until March 5. 2. Cancelled preauthorized remittance transfers. 3. Concurrent cancellation obligations. 36(d) Date of Transfer for Subsequent Preauthorized Remittance Transfers 1. General. 2. Delivery of disclosure. 3. Disclosure of the date of transfer. e.g., e.g., e.g., 4. Accuracy requirements. Appendix A—Model Disclosure Clauses and Forms 1. Review of forms. 2. Use of forms. 3. Altering the clauses. 4. Model forms for remittance transfers. i. The model forms contain information that is not required by subpart B, including a confirmation code, the sender's name and contact information, and the optional disclosure of the estimated amount of these non-covered third-party fees and taxes collected by a person other than the provider as part of the disclaimer. Additional information not required by subpart B may be presented on the model forms as permitted by § 1005.31(b)(1)(viii) and (c)(4). Any additional information must be presented consistent with a remittance transfer provider's obligation to provide required disclosures in a clear and conspicuous manner. ii. Use of the model forms is optional. A remittance transfer provider may change the forms by rearranging the format or by making modifications to the language of the forms, in each case without modifying the substance of the disclosures. Any rearrangement or modification of the format of the model forms must be consistent with the form, grouping, proximity, and other requirements of § 1005.31(a) and (c). Providers making revisions that do not comply with this section will lose the benefit of the safe harbor for appropriate use of Model Forms A-30 to A-41. iii. Permissible changes to the language and format of the model forms include, for example: A. Substituting the information contained in the model forms that is intended to demonstrate how to complete the information in the model forms—such as names, addresses, and Web sites; dates; numbers; and State-specific contact information—with information applicable to the remittance transfer. In addition, if the applicable non-covered third-party fees are imposed by an institution other than a bank, a provider could modify the disclaimer accordingly. B. Eliminating disclosures that are not applicable to the transfer, as described under § 1005.31(b). For example, if only covered third-party fees are imposed, a provider would not use a disclaimer related to additional fees that may apply because all applicable fees are covered and included in the disclosure as required under § 1005.31(b)(1)(vi). C. Correcting or updating telephone numbers, mailing addresses, or Web site addresses that may change over time. D. Providing the disclosures on a paper size that is different from a register receipt and 8.5 inch by 11 inch formats. E. Adding a term substantially similar to “estimated” in close proximity to the specified terms in § 1005.31(b)(1) and (2), as required under § 1005.31(d). F. Providing the disclosures in a foreign language, or multiple foreign languages, subject to the requirements of § 1005.31(g). G. Substituting cancellation language to reflect the right to a cancellation made pursuant to the requirements of § 1005.36(c). iv. Changes to the model forms that are not permissible include, for example, adding information that is not segregated from the required disclosures, other than as permitted by § 1005.31(c)(4). [76 FR 81023, Dec. 27, 2011, as amended at 78 FR 18224, Mar. 26, 2013; 77 FR 6297, Feb. 7, 2012; 77 FR 50285; 77 FR 50285, Aug. 20, 2012; 78 FR 30714, May 22, 2013; 78 FR 49366, Aug. 14, 2013; 79 FR 55993, Sept. 18, 2014; 81 FR 70320, Oct. 12, 2016; 81 FR 84345, Nov. 22, 2016; 83 FR 6420, Feb. 13, 2018; 85 FR 34905, June 5, 2020; 89 FR 106836, Dec. 30, 2024]

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