CUNA Regulatory Comment Call
December 7, 2006
Regulation E Disclosure Exemption for Small Dollar Amounts
- The Federal Reserve Board (Fed) is proposing to amend Regulation E, which implements the Electronic Fund Transfer Act, to 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.
- Comments on this proposal will be due by January 30, 2007.
Please submit your comments to CUNA by January 19, 2007. Please feel free to fax your responses to CUNA at 202-638-7052; e-mail them to Senior Vice President and Deputy General Counsel Mary Dunn at firstname.lastname@example.org or to Senior Assistant General Counsel Jeff Bloch at email@example.com; or mail them to Mary or Jeff in c/o CUNAs Regulatory Advocacy Department, 601 Pennsylvania Avenue, NW, South Building, 6th Floor, Washington, DC 20004. You may also contact us if you would like a copy of the proposed rule, or you may access it here.
The Electronic Fund Transfer (EFT) Act establishes rights, liabilities, and responsibilities for parties involved in EFT systems, which include transfers through automated teller machines (ATM), point-of-sale terminals (POS), automated clearinghouses, telephone bill-payment plans, and remote banking programs. Regulation E implements the EFT Act, which contains official staff commentary that interprets the regulation and provides guidance in applying the regulation to specific transactions. The EFT Act and Regulation E require that a number of disclosures be provided in writing, provide limitations on consumer liability for unauthorized transfers, outline procedures for error resolution, and restrict the unsolicited issuance of ATM cards and other access devices.
BRIEF DESCRIPTION OF THE PROPOSED RULE
Regulation E requires that a receipt for an EFT transaction at an electronic terminal be made available to the consumer at the time of the transaction. An electronic terminal is generally defined as an electronic device through which the consumer attempts to initiate an EFT. Electronic terminals include POS terminals, as well as ATM and other cash dispensing machines.
Because of the implementation costs and other considerations, as well as the uncertain consumer benefit of receipts for small dollar transactions, the Fed is proposing to create an exception from the terminal receipt requirements for EFTs that are in amounts of $15 or less. This will apply to all types of transfers initiated by a consumer at an electronic terminal, including signature-based and personal identification number (PIN) - based debits from the consumers account, as well as ATM transactions. However, the Fed anticipates that financial institutions will continue, for operational purposes, to provide receipts for ATM transactions, regardless of the amount.
This exception is intended to facilitate electronic transactions for small-dollar amounts in circumstances in which the receipt requirement is costly, burdensome, and impractical to the extent that it deters merchants from allowing consumers to use electronic methods of payment. The Fed also believes that the risks to consumers of not receiving receipts for these small-dollar transactions, as well as the benefit of receiving them, would be minimal, as consumers are less likely to retain such receipts as proof or payment or for recordkeeping purposes. In addition, consumers will still receive a listing of each transaction on their periodic statement, regardless of the amount, and will also continue to have the right to assert errors that may arise from such transactions, provided that the notification from the consumer is submitted within the required time frames.
QUESTIONS TO CONSIDER REGARDING THE PROPOSED RULE
(The Fed is specifically interested in receiving comments on these issues)
- Are additional consumer protections needed for consumers who will not receive
receipts as a result of this proposed rule? If so, what protections should be
- Is $15 an appropriate threshold for this exception regarding receipts that
are provided at electronic terminals? If not, what threshold should apply?
- Other comments?
Eric Richard EVP &General Counsel (202) 508-6742 firstname.lastname@example.org |
Mary Mitchell Dunn SVP & Deputy General Counsel (202) 508-6736 email@example.com
Jeffrey Bloch Senior Assistant General Counsel (202) 508-6732 firstname.lastname@example.org
Lilly Thomas Assistant General Counsel (202) 508-6733 email@example.com
Catherine Orr Senior Regulatory Counsel (202) 508-6743 firstname.lastname@example.org