CUNA Comment Letter

Proposed Amendments to Regulation E

January 30, 2007

Ms. Jennifer J. Johnson
Board of Governors of the Federal Reserve System
20th Street and Constitution Avenue, N.W.,
Washington, DC 20551

RE:   Proposed Amendments to Regulation E – Docket No. R-1270

Dear Ms. Johnson:

The Credit Union National Association (CUNA) appreciates the opportunity to comment on the proposed amendments to Regulation E and the official staff commentary that would create an exception for certain small dollar transactions from the requirement that terminal receipts be made available to consumers at the time of the transaction. CUNA represents approximately 90 percent of our nation’s 8,700 federal and state-chartered credit unions, which serve nearly 87 million members.

CUNA supports the Federal Reserve Board’s (Board) proposal to create an exception from the terminal receipt requirements for electronic fund transfers (EFT) for certain small dollar transactions. As consumers are increasingly using credit and debit cards in place of cash for small-dollar transactions for reasons such as convenience, time-savings, and ATM fee avoidance, more merchants will be encouraged to accept cashless payment alternatives. The proposed amendments to Regulation E will further facilitate electronic transactions, especially in locations where receipt printing may be impracticable.

We also agree that the risks to the majority of consumers of not receiving a receipt for their small-dollar transactions would be minimal. Transactions would continue to appear on periodic statements and consumers would maintain the right to assert errors that may arise. With additional cashless options, consumers will have liability and error resolution protections that they would not have if paying by cash. We note, however, that there may be certain consumer segments, such as the elderly, that may prefer to receive receipts for every electronic transaction.

We believe that the $15 threshold will not affect ATM transactions as most ATMs have a minimum cash withdrawal amount of $20. Additionally, debit and credit card associations have waived certain authorization requirements for purchases under $25 and reduced their debit and credit card interchange rates for certain small-dollar transactions. We believe raising the threshold to $25 will maintain consistency with industry standards.

In its supplementary information, the Board states that, “the proposed exception would also apply to deposits at ATMs or other electronic terminals of $15 or less.” (71 FR 69502). We request that the Board clarify that the receipt exception would apply to all types of transfers initiated by a consumer at ATMs that are at or below the small-dollar threshold and not limited to deposits at ATMs.

Thank you for the opportunity to comment on the proposed amendments to Regulation E. If you If you have any questions or comments, please feel free to contact me at 202-508-6733.


Lilly Thomas