Supplement I to Part 205 - Official Staff Interpretations
12:2.0.1.1.6.0.3.20.9 :
Supplement I to Part 205 - Official Staff Interpretations Section
205.2 - Definitions 2(a) Access Device
1. Examples. The term access device includes debit cards,
personal identification numbers (PINs), telephone transfer and
telephone bill payment codes, and other means that may be used by a
consumer to initiate an electronic fund transfer (EFT) to or from a
consumer account. The term does not include magnetic tape or other
devices used internally by a financial institution to initiate
electronic transfers.
2. Checks used to capture information. The term “access
device” does not include a check or draft used to capture the MICR
(Magnetic Ink Character Recognition) encoding to initiate a
one-time ACH debit. For example, if a consumer authorizes a
one-time ACH debit from the consumer's account using a blank,
partially completed, or fully completed and signed check for the
merchant to capture the routing, account, and serial numbers to
initiate the debit, the check is not an access device. (Although
the check is not an access device under Regulation E, the
transaction is nonetheless covered by the regulation. See comment
3(b)(1)-1.v.)
2(b) Account
1. Consumer asset account. The term consumer asset
account includes:
i. Club accounts, such as vacation clubs. In many cases,
however, these accounts are exempt from the regulation under §
205.3(c)(5) because all electronic transfers to or from the account
have been preauthorized by the consumer and involve another account
of the consumer at the same institution.
ii. A retail repurchase agreement (repo), which is a loan made
to a financial institution by a consumer that is collateralized by
government or government-insured securities.
2. Certain employment-related cards not covered. The term
“payroll card account” does not include a card used solely to
disburse incentive-based payments (other than commissions which can
represent the primary means through which a consumer is paid), such
as bonuses, which are unlikely to be a consumer's primary source of
salary or other compensation. The term also does not include a card
used solely to make disbursements unrelated to compensation, such
as petty cash reimbursements or travel per diem payments.
Similarly, a payroll card account does not include a card that is
used in isolated instances to which an employer typically does not
make recurring payments, such as when providing final payments or
in emergency situations when other payment methods are unavailable.
However, all transactions involving the transfer of funds to or
from a payroll card account are covered by the regulation, even if
a particular transaction involves payment of a bonus, other
incentive-based payment, or reimbursement, or the transaction does
not represent a transfer of wages, salary, or other employee
compensation.
3. Examples of accounts not covered by Regulation E (12 CFR part
205) include:
i. Profit-sharing and pension accounts established under a trust
agreement, which are exempt under § 205.2(b)(2).
ii. Escrow accounts, such as those established to ensure payment
of items such as real estate taxes, insurance premiums, or
completion of repairs or improvements.
iii. Accounts for accumulating funds to purchase U.S. savings
bonds.
Paragraph 2(b)(2)
1. Bona fide trust agreements. The term bona fide trust
agreement is not defined by the act or regulation; therefore,
financial institutions must look to state or other applicable law
for interpretation.
2. Custodial agreements. An account held under a
custodial agreement that qualifies as a trust under the Internal
Revenue Code, such as an individual retirement account, is
considered to be held under a trust agreement for purposes of
Regulation E.
2(d) Business Day
1. Duration. A business day includes the entire 24-hour
period ending at midnight, and a notice required by the regulation
is effective even if given outside normal business hours. The
regulation does not require, however, that a financial institution
make telephone lines available on a 24-hour basis.
2. Substantially all business functions. “Substantially
all business functions” include both the public and the back-office
operations of the institution. For example, if the offices of an
institution are open on Saturdays for handling some consumer
transactions (such as deposits, withdrawals, and other teller
transactions), but not for performing internal functions (such as
investigating account errors), then Saturday is not a business day
for that institution. In this case, Saturday does not count toward
the business-day standard set by the regulation for reporting lost
or stolen access devices, resolving errors, etc.
3. Short hours. A financial institution may determine, at
its election, whether an abbreviated day is a business day. For
example, if an institution engages in substantially all business
functions until noon on Saturdays instead of its usual 3:00 p.m.
closing, it may consider Saturday a business day.
4. Telephone line. If a financial institution makes a
telephone line available on Sundays for reporting the loss or theft
of an access device, but performs no other business functions,
Sunday is not a business day under the “substantially all business
functions” standard.
2(h) Electronic Terminal
1. Point-of-sale (POS) payments initiated by telephone.
Because the term electronic terminal excludes a telephone operated
by a consumer, a financial institution need not provide a terminal
receipt when:
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. A POS terminal that captures data
electronically, for debiting or crediting to a consumer's asset
account, is an electronic terminal for purposes of Regulation E
even if no access device is used to initiate the transaction. (See
§ 205.9 for receipt requirements.)
3. Teller-operated terminals. A terminal or other
computer equipment operated by an employee of a financial
institution is not an electronic terminal for purposes of the
regulation. However, transfers initiated at such terminals by means
of a consumer's access device (using the consumer's PIN, for
example) are EFTs and are subject to other requirements of the
regulation. If an access device is used only for identification
purposes or for determining the account balance, the transfers are
not EFTs for purposes of the regulation.
2(k) Preauthorized Electronic Fund Transfer
1. Advance authorization. A “preauthorized electronic
fund transfer” under Regulation E is one authorized by the consumer
in advance of a transfer that will take place on a recurring basis,
at substantially regular intervals, and will require no further
action by the consumer to initiate the transfer. In a bill-payment
system, for example, if the consumer authorizes a financial
institution to make monthly payments to a payee by means of EFTs,
and the payments take place without further action by the consumer,
the payments are preauthorized EFTs. In contrast, if the consumer
must take action each month to initiate a payment (such as by
entering instructions on a touch-tone telephone or home computer),
the payments are not preauthorized EFTs.
2(m) Unauthorized Electronic Fund Transfer
1. Transfer by institution's employee. A consumer has no
liability for erroneous or fraudulent transfers initiated by an
employee of a financial institution.
2. Authority. If a consumer furnishes an access device
and grants authority to make transfers to a person (such as a
family member or co-worker) who exceeds the authority given, the
consumer is fully liable for the transfers unless the consumer has
notified the financial institution that transfers by that person
are no longer authorized.
3. Access device obtained through robbery or fraud. An
unauthorized EFT includes a transfer initiated by a person who
obtained the access device from the consumer through fraud or
robbery.
4. Forced initiation. An EFT at an automated teller
machine (ATM) is an unauthorized transfer if the consumer has been
induced by force to initiate the transfer.
5. Reversal of direct deposits. The reversal of a direct
deposit made in error is not an unauthorized EFT when it
involves:
i. A credit made to the wrong consumer's account;
ii. A duplicate credit made to a consumer's account; or
iii. A credit in the wrong amount (for example, when the amount
credited to the consumer's account differs from the amount in the
transmittal instructions).
Section 205.3 - Coverage 3(a) General
1. Accounts covered. The requirements of the regulation
apply only to an account for which an agreement for EFT services to
or from the account has been entered into between:
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. The fact
that membership in an ACH requires a financial institution to
accept EFTs to accounts at the institution does not make every
account of that institution subject to the regulation.
3. Foreign applicability. Regulation E applies to all
persons (including branches and other offices of foreign banks
located in the United States) that offer EFT services to residents
of any state, including resident aliens. It covers any account
located in the United States through which EFTs are offered to a
resident of a state. This is the case whether or not a particular
transfer takes place in the United States and whether or not the
financial institution is chartered in the United States or a
foreign country. The regulation does not apply to a foreign branch
of a U.S. bank unless the EFT services are offered in connection
with an account in a state as defined in § 205.2(l).
3(b) Electronic Fund Transfer Paragraph 3(b)(1) - Definition
1. Fund transfers covered. The term electronic fund
transfer includes:
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. The term electronic fund
transfer does not include:
i. A payment that does not debit or credit a consumer asset
account, such as a payroll allotment to a creditor to repay a
credit extension (which is deducted from salary).
ii. A payment made in currency by a consumer to another person
at an electronic terminal.
iii. A preauthorized check drawn by the financial institution on
the consumer's account (such as an interest or other recurring
payment to the consumer or another party), even if the check is
computer-generated.
iv. Transactions arising from the electronic collection,
presentment, or return of checks through the check collection
system, such as through transmission of electronic check
images.
Paragraph 3(b)(2) - Electronic Fund Transfer Using Information From
a Check
1. Notice at POS not furnished due to inadvertent error.
If the copy of the notice under section 205.3(b)(2)(ii) for ECK
transactions is not provided to the consumer at POS because of a
bona fide unintentional error, such as when a terminal printing
mechanism jams, no violation results if the payee maintains
procedures reasonably adapted to avoid such occurrences.
2. Authorization to process a transaction as an EFT or as a
check. In order to process a transaction as an EFT or
alternatively as a check, the payee must obtain the consumer's
authorization to do so. A payee may, at its option, specify the
circumstances under which a check may not be converted to an EFT.
(See model clauses in Appendix A-6.)
3. Notice for each transfer. Generally, a notice to
authorize an electronic check conversion transaction must be
provided for each transaction. For example, a consumer must receive
a notice that the transaction will be processed as an EFT for each
transaction at POS or each time a consumer mails a check in an
accounts receivable (ARC) transaction to pay a bill, such as a
utility bill, if the payee intends to convert a check received as
payment. Similarly, the consumer must receive notice if the payee
intends to collect a service fee for insufficient or uncollected
funds via an EFT for each transaction whether at POS or if the
consumer mails a check to pay a bill. The notice about when funds
may be debited from a consumer's account and the non-return of
consumer checks by the consumer's financial institution must also
be provided for each transaction. However, if in an ARC
transaction, a payee provides a coupon book to a consumer, for
example, for mortgage loan payments, and the payment dates and
amounts are set out in the coupon book, the payee may provide a
single notice on the coupon book stating all of the required
disclosures under paragraph (b)(2) of this section in order to
obtain authorization for each conversion of a check and any debits
via EFT to the consumer's account to collect any service fees
imposed by the payee for insufficient or uncollected funds in the
consumer's account. The notice must be placed on a conspicuous
location of the coupon book that a consumer can retain - for
example, on the first page, or inside the front cover.
4. Multiple payments/multiple consumers. If a merchant or
other payee will use information from a consumer's check to
initiate an EFT from the consumer's account, notice to a consumer
listed on the billing account that a check provided as payment
during a single billing cycle or after receiving an invoice or
statement will be processed as a one-time EFT or as a check
transaction constitutes notice for all checks provided in payment
for the billing cycle or the invoice for which notice has been
provided, whether the check(s) is submitted by the consumer or
someone else. The notice applies to all checks provided in payment
for the billing cycle or invoice until the provision of notice on
or with the next invoice or statement. Thus, if a merchant or other
payee receives a check as payment for the consumer listed on the
billing account after providing notice that the check will be
processed as a one-time EFT, the authorization from that consumer
constitutes authorization to convert any other checks provided for
that invoice or statement. Other notices required under this
paragraph (b)(2) (for example, to collect a service fee for
insufficient or uncollected funds via an EFT) provided to the
consumer listed on the billing account also constitutes notice to
any other consumer who may provide a check for the billing cycle or
invoice.
5. Additional disclosures about ECK transactions at POS.
When a payee initiates an EFT at POS using information from the
consumer's check, and returns the check to the consumer at POS, the
payee need not provide a notice to the consumer that the check will
not be returned by the consumer's financial institution.
Paragraph 3(b)(3) - Collection of Returned Item Fees via Electronic
Fund Transfer
1. Fees imposed by account-holding institution. The
requirement to obtain a consumer's authorization to collect a fee
via EFT for the return of an EFT or check unpaid applies only to
the person that intends to initiate an EFT to collect the returned
item fee from the consumer's account. The authorization requirement
does not apply to any fees assessed by the consumer's
account-holding financial institution when it returns the unpaid
underlying EFT or check or pays the amount of an overdraft.
2. Accounts receivable transactions. In an accounts
receivable (ARC) transaction where a consumer sends in a payment
for amounts owed (or makes an in-person payment at a biller's
physical location, such as when a consumer makes a loan payment at
a bank branch or places a payment in a dropbox), a person seeking
to electronically collect a fee for items returned unpaid must
obtain the consumer's authorization to collect the fee in this
manner. A consumer authorizes a person to electronically collect a
returned item fee when the consumer receives notice, typically on
an invoice or statement, that the person may collect the fee
through an EFT to the consumer's account, and the consumer goes
forward with the underlying transaction by providing payment. The
notice must also state the dollar amount of the fee. However, an
explanation of how that fee will be determined may be provided in
place of the dollar amount of the fee if the fee may vary due to
the amount of the transaction or due to other factors, such as the
number of days the underlying transaction is left outstanding. For
example, if a state law permits a maximum fee of $30 or 10% of the
underlying transaction, whichever is greater, the person collecting
the fee may explain how the fee is determined, rather than state a
specific dollar amount for the fee.
3. Disclosure of dollar amount of fee for POS
transactions. The notice provided to the consumer in connection
with a POS transaction under § 205.3(b)(3)(ii) must state the
amount of the fee for a returned item if the dollar amount of the
fee can be calculated at the time the notice is provided or mailed.
For example, if notice is provided to the consumer at the time of
the transaction, if the applicable state law sets a maximum fee
that may be collected for a returned item based on the amount of
the underlying transaction (such as where the amount of the fee is
expressed as a percentage of the underlying transaction), the
person collecting the fee must state the actual dollar amount of
the fee on the notice provided to the consumer. Alternatively, if
the amount of the fee to be collected cannot be calculated at the
time of the transaction (for example, where the amount of the fee
will depend on the number of days a debt continues to be owed), the
person collecting the fee may provide a description of how the fee
will be determined on both the posted notice as well as on the
notice provided at the time of the transaction. However, if the
person collecting the fee elects to send the consumer notice after
the person has initiated an EFT to collect the fee, that notice
must state the amount of the fee to be collected.
4. Third party providing notice. The person initiating an
EFT to a consumer's account to electronically collect a fee for an
item returned unpaid may obtain the authorization and provide the
notices required under § 205.3(b)(3) through third parties, such as
merchants.
3(c) Exclusions From Coverage Paragraph 3(c)(1) - Checks
1. Re-presented checks. The electronic re-presentment of
a returned check is not covered by Regulation E because the
transaction originated by check. Regulation E does apply, however,
to any fee debited via an EFT from a consumer's account by the
payee because the check was returned for insufficient or
uncollected funds. The person debiting the fee electronically must
obtain the consumer's authorization.
2. Check used to capture information for a one-time EFT.
See comment 3(b)(1)-1.v.
Paragraph 3(c)(2) - Check Guarantee or Authorization
1. Memo posting. Under a check guarantee or check
authorization service, debiting of the consumer's account occurs
when the check or draft is presented for payment. These services
are exempt from coverage, even when a temporary hold on the account
is memo-posted electronically at the time of authorization.
Paragraph 3(c)(3) - Wire or Other Similar Transfers
1. Fedwire and ACH. If a financial institution makes a
fund transfer to a consumer's account after receiving funds through
Fedwire or a similar network, the transfer by ACH is covered by the
regulation even though the Fedwire or network transfer is
exempt.
2. Article 4A. Financial institutions that offer
telephone-initiated Fedwire payments are subject to the
requirements of UCC section 4A-202, which encourages verification
of Fedwire payment orders pursuant to a security procedure
established by agreement between the consumer and the receiving
bank. These transfers are not subject to Regulation E and the
agreement is not considered a telephone plan if the service is
offered separately from a telephone bill-payment or other
prearranged plan subject to Regulation E. The Board's Regulation J
(12 CFR part 210) specifies the rules applicable to funds handled
by Federal Reserve Banks. To ensure that the rules for all fund
transfers through Fedwire are consistent, the Board used its
preemptive authority under UCC section 4A-107 to determine that
subpart B of Regulation J (12 CFR part 210), including the
provisions of Article 4A, applies to all fund transfers through
Fedwire, even if a portion of the fund transfer is governed by the
EFTA. The portion of the fund transfer that is governed by the EFTA
is not governed by subpart B of Regulation J (12 CFR part 210).
3. Similar fund transfer systems. Fund transfer systems
that are similar to Fedwire include the Clearing House Interbank
Payments System (CHIPS), Society for Worldwide Interbank Financial
Telecommunication (SWIFT), Telex, and transfers made on the books
of correspondent banks.
Paragraph 3(c)(4) - Securities and Commodities Transfers
1. Coverage. The securities exemption applies to
securities and commodities that may be sold by a registered
broker-dealer or futures commission merchant, even when the
security or commodity itself is not regulated by the Securities and
Exchange Commission or the Commodity Futures Trading
Commission.
2. Example of exempt transfer. The exemption applies to a
transfer involving a transfer initiated by a telephone order to a
stockbroker to buy or sell securities or to exercise a margin
call.
3. Examples of nonexempt transfers. The exemption does
not apply to a transfer involving:
i. A debit card or other access device that accesses a
securities or commodities account such as a money market mutual
fund and that the consumer uses for purchasing goods or services or
for obtaining cash.
ii. A payment of interest or dividends into the consumer's
account (for example, from a brokerage firm or from a Federal
Reserve Bank for government securities).
Paragraph 3(c)(5) - Automatic Transfers by Account-Holding
Institution
1. Automatic transfers exempted. The exemption applies
to:
i. Electronic debits or credits to consumer accounts for check
charges, stop-payment charges, NSF charges, overdraft charges,
provisional credits, error adjustments, and similar items that are
initiated automatically on the occurrence of certain events.
ii. Debits to consumer accounts for group insurance available
only through the financial institution and payable only by means of
an aggregate payment from the institution to the insurer.
iii. EFTs between a thrift institution and its paired commercial
bank in the state of Rhode Island, which are deemed under state law
to be intra-institutional.
iv. Automatic transfers between a consumer's accounts within the
same financial institution, even if the account holders on the two
accounts are not identical.
2. Automatic transfers not exempted. Transfers between
accounts of the consumer at affiliated institutions (such as
between a bank and its subsidiary or within a holding company) are
not intra-institutional transfers, and thus do not qualify for the
exemption.
Paragraph 3(c)(6) - Telephone-Initiated Transfers
1. Written plan or agreement. A transfer that the
consumer initiates by telephone is covered by Regulation E if the
transfer is made under a written plan or agreement between the
consumer and the financial institution making the transfer. A
written statement available to the public or to account holders
that describes a service allowing a consumer to initiate transfers
by telephone constitutes a plan - for example, a brochure, or
material included with periodic statements. The following, however,
do not by themselves constitute a written plan or agreement:
i. A hold-harmless agreement on a signature card that protects
the institution if the consumer requests a transfer.
ii. A legend on a signature card, periodic statement, or
passbook that limits the number of telephone-initiated transfers
the consumer can make from a savings account because of reserve
requirements under Regulation D (12 CFR part 204).
iii. An agreement permitting the consumer to approve by
telephone the rollover of funds at the maturity of an
instrument.
2. Examples of covered transfers. When a written plan or
agreement has been entered into, a transfer initiated by a
telephone call from a consumer is covered even though:
i. An employee of the financial institution completes the
transfer manually (for example, by means of a debit memo or deposit
slip).
ii. The consumer is required to make a separate request for each
transfer.
iii. The consumer uses the plan infrequently.
iv. The consumer initiates the transfer via a facsimile
machine.
v. The consumer initiates the transfer using a financial
institution's audio-response or voice-response telephone
system.
Paragraph 3(c)(7) - Small Institutions
1. Coverage. This exemption is limited to preauthorized
transfers; institutions that offer other EFTs must comply with the
applicable sections of the regulation as to such services. The
preauthorized transfers remain subject to sections 913, 915, and
916 of the act and § 205.10(e), and are therefore exempt from UCC
Article 4A.
Section 205.4 - General Disclosure Requirements; Jointly Offered
Services 4(a) Form of Disclosures
1. General. Although no particular rules govern type
size, number of pages, or the relative conspicuousness of various
terms, the disclosures must be in a clear and readily
understandable written form that the consumer may retain. Numbers
or codes are considered readily understandable if explained
elsewhere on the disclosure form.
2. Foreign language disclosures. Disclosures may be made
in languages other than English, provided they are available in
English upon request.
Section 205.5 - Issuance of Access Devices
1. Coverage. The provisions of this section limit the
circumstances under which a financial institution may issue an
access device to a consumer. Making an additional account
accessible through an existing access device is equivalent to
issuing an access device and is subject to the limitations of this
section.
5(a) Solicited Issuance Paragraph 5(a)(1)
1. Joint account. For a joint account, a financial
institution may issue an access device to each account holder if
the requesting holder specifically authorizes the issuance.
2. Permissible forms of request. The request for an
access device may be written or oral (for example, in response to a
telephone solicitation by a card issuer).
Paragraph 5(a)(2)
1. One-for-one rule. In issuing a renewal or substitute
access device, only one renewal or substitute device may replace a
previously issued device. For example, only one new card and PIN
may replace a card and PIN previously issued. A financial
institution may provide additional devices at the time it issues
the renewal or substitute access device, however, provided the
institution complies with § 205.5(b). (See comment 5(b)-5.) If the
replacement device or the additional device permits either fewer or
additional types of electronic fund transfer services, a
change-in-terms notice or new disclosures are required.
2. Renewal or substitution by a successor institution. A
successor institution is an entity that replaces the original
financial institution (for example, following a corporate merger or
acquisition) or that acquires accounts or assumes the operation of
an EFT system.
5(b) Unsolicited Issuance
1. Compliance. A financial institution may issue an
unsolicited access device (such as the combination of a debit card
and PIN) if the institution's ATM system has been programmed not to
accept the access device until after the consumer requests and the
institution validates the device. Merely instructing a consumer not
to use an unsolicited debit card and PIN until after the
institution verifies the consumer's identity does not comply with
the regulation.
2. PINS. A financial institution may impose no liability
on a consumer for unauthorized transfers involving an unsolicited
access device until the device becomes an “accepted access device”
under the regulation. A card and PIN combination may be treated as
an accepted access device once the consumer has used it to make a
transfer.
3. Functions of PIN. If an institution issues a PIN at
the consumer's request, the issuance may constitute both a way of
validating the debit card and the means to identify the consumer
(required as a condition of imposing liability for unauthorized
transfers).
4. Verification of identity. To verify the consumer's
identity, a financial institution may use any reasonable means,
such as a photograph, fingerprint, personal visit, signature
comparison, or personal information about the consumer. However,
even if reasonable means were used, if an institution fails to
verify correctly the consumer's identity and an imposter succeeds
in having the device validated, the consumer is not liable for any
unauthorized transfers from the account.
5. Additional access devices in a renewal or
substitution. A financial institution may issue more than one
access device in connection with the renewal or substitution of a
previously issued accepted access device, provided that any
additional access device (beyond the device replacing the accepted
access device) is not validated at the time it is issued, and the
institution complies with the other requirements of § 205.5(b). The
institution may, if it chooses, set up the validation procedure
such that both the device replacing the previously issued device
and the additional device are not validated at the time they are
issued, and validation will apply to both devices. If the
institution sets up the validation procedure in this way, the
institution should provide a clear and readily understandable
disclosure to the consumer that both devices are unvalidated and
that validation will apply to both devices.
Section 205.6 - Liability of Consumer for Unauthorized Transfers
6(a) Conditions for Liability
1. Means of identification. A financial institution may
use various means for identifying the consumer to whom the access
device is issued, including but not limited to:
i. Electronic or mechanical confirmation (such as a PIN).
ii. Comparison of the consumer's signature, fingerprint, or
photograph.
2. Multiple users. When more than one access device is
issued for an account, the financial institution may, but need not,
provide a separate means to identify each user of the account.
6(b) Limitations on Amount of Liability
1. Application of liability provisions. There are three
possible tiers of consumer liability for unauthorized EFTs
depending on the situation. A consumer may be liable for (1) up to
$50; (2) up to $500; or (3) an unlimited amount depending on when
the unauthorized EFT occurs. More than one tier may apply to a
given situation because each corresponds to a different (sometimes
overlapping) time period or set of conditions.
2. Consumer negligence. Negligence by the consumer cannot
be used as the basis for imposing greater liability than is
permissible under Regulation E. Thus, consumer behavior that may
constitute negligence under state law, such as writing the PIN on a
debit card or on a piece of paper kept with the card, does not
affect the consumer's liability for unauthorized transfers.
(However, refer to comment 2(m)-2 regarding termination of the
authority of given by the consumer to another person.)
3. Limits on liability. The extent of the consumer's
liability is determined solely by the consumer's promptness in
reporting the loss or theft of an access device. Similarly, no
agreement between the consumer and an institution may impose
greater liability on the consumer for an unauthorized transfer than
the limits provided in Regulation E.
Paragraph 6(b)(1) - Timely Notice Given
1. $50 limit applies. The basic liability limit is $50.
For example, the consumer's card is lost or stolen on Monday and
the consumer learns of the loss or theft on Wednesday. If the
consumer notifies the financial institution within two business
days of learning of the loss or theft (by midnight Friday), the
consumer's liability is limited to $50 or the amount of the
unauthorized transfers that occurred before notification, whichever
is less.
2. Knowledge of loss or theft of access device. The fact
that a consumer has received a periodic statement that reflects
unauthorized transfers may be a factor in determining whether the
consumer had knowledge of the loss or theft, but cannot be deemed
to represent conclusive evidence that the consumer had such
knowledge.
3. Two-business-day rule. The two-business-day period
does not include the day the consumer learns of the loss or theft
or any day that is not a business day. The rule is calculated based
on two 24-hour periods, without regard to the financial
institution's business hours or the time of day that the consumer
learns of the loss or theft. For example, a consumer learns of the
loss or theft at 6 p.m. on Friday. Assuming that Saturday is a
business day and Sunday is not, the two-business-day period begins
on Saturday and expires at 11:59 p.m. on Monday, not at the end of
the financial institution's business day on Monday.
Paragraph 6(b)(2) - Timely Notice Not Given
1. $500 limit applies. The second tier of liability is
$500. For example, the consumer's card is stolen on Monday and the
consumer learns of the theft that same day. The consumer reports
the theft on Friday. The $500 limit applies because the consumer
failed to notify the financial institution within two business days
of learning of the theft (which would have been by midnight
Wednesday). How much the consumer is actually liable for, however,
depends on when the unauthorized transfers take place. In this
example, assume a $100 unauthorized transfer was made on Tuesday
and a $600 unauthorized transfer on Thursday. Because the consumer
is liable for the amount of the loss that occurs within the first
two business days (but no more than $50), plus the amount of the
unauthorized transfers that occurs after the first two business
days and before the consumer gives notice, the consumer's total
liability is $500 ($50 of the $100 transfer plus $450 of the $600
transfer, in this example). But if $600 was taken on Tuesday and
$100 on Thursday, the consumer's maximum liability would be $150
($50 of the $600 plus $100).
Paragraph 6(b)(3) - Periodic Statement; Timely Notice Not Given
1. Unlimited liability applies. The standard of unlimited
liability applies if unauthorized transfers appear on a periodic
statement, and may apply in conjunction with the first two tiers of
liability. If a periodic statement shows an unauthorized transfer
made with a lost or stolen debit card, the consumer must notify the
financial institution within 60 calendar days after the periodic
statement was sent; otherwise, the consumer faces unlimited
liability for all unauthorized transfers made after the 60-day
period. The consumer's liability for unauthorized transfers before
the statement is sent, and up to 60 days following, is determined
based on the first two tiers of liability: up to $50 if the
consumer notifies the financial institution within two business
days of learning of the loss or theft of the card and up to $500 if
the consumer notifies the institution after two business days of
learning of the loss or theft.
2. Transfers not involving access device. The first two
tiers of liability do not apply to unauthorized transfers from a
consumer's account made without an access device. If, however, the
consumer fails to report such unauthorized transfers within 60
calendar days of the financial institution's transmittal of the
periodic statement, the consumer may be liable for any transfers
occurring after the close of the 60 days and before notice is given
to the institution. For example, a consumer's account is
electronically debited for $200 without the consumer's
authorization and by means other than the consumer's access device.
If the consumer notifies the institution within 60 days of the
transmittal of the periodic statement that shows the unauthorized
transfer, the consumer has no liability. However, if in addition to
the $200, the consumer's account is debited for a $400 unauthorized
transfer on the 61st day and the consumer fails to notify the
institution of the first unauthorized transfer until the 62nd day,
the consumer may be liable for the full $400.
Paragraph 6(b)(4) - Extension of Time Limits
1. Extenuating circumstances. Examples of circumstances
that require extension of the notification periods under this
section include the consumer's extended travel or
hospitalization.
Paragraph 6(b)(5) - Notice to Financial Institution
1. Receipt of notice. A financial institution is
considered to have received notice for purposes of limiting the
consumer's liability if notice is given in a reasonable manner,
even if the consumer notifies the institution but uses an address
or telephone number other than the one specified by the
institution.
2. Notice by third party. Notice to a financial
institution by a person acting on the consumer's behalf is
considered valid under this section. For example, if a consumer is
hospitalized and unable to report the loss or theft of an access
device, notice is considered given when someone acting on the
consumer's behalf notifies the bank of the loss or theft. A
financial institution may require appropriate documentation from
the person representing the consumer to establish that the person
is acting on the consumer's behalf.
3. Content of notice. Notice to a financial institution
is considered given when a consumer takes reasonable steps to
provide the institution with the pertinent account information.
Even when the consumer is unable to provide the account number or
the card number in reporting a lost or stolen access device or an
unauthorized transfer, the notice effectively limits the consumer's
liability if the consumer otherwise identifies sufficiently the
account in question. For example, the consumer may identify the
account by the name on the account and the type of account in
question.
Section 205.7 - Initial Disclosures 7(a) Timing of Disclosures
1. Early disclosures. Disclosures given by a financial
institution earlier than the regulation requires (for example, when
the consumer opens a checking account) need not be repeated when
the consumer later enters into an agreement with a third party to
initiate preauthorized transfers to or from the consumer's account,
unless the terms and conditions differ from those that the
institution previously disclosed. This interpretation also applies
to any notice provided about one-time EFTs from a consumer's
account initiated using information from the consumer's check. On
the other hand, if an agreement for EFT services to be provided by
an account-holding institution is directly between the consumer and
the account-holding institution, disclosures must be given in close
proximity to the event requiring disclosure, for example, when the
consumer contracts for a new service.
2. Lack of advance notice of a transfer. Where a consumer
authorizes a third party to debit or credit the consumer's account,
an account-holding institution that has not received advance notice
of the transfer or transfers must provide the required disclosures
as soon as reasonably possible after the first debit or credit is
made, unless the institution has previously given the
disclosures.
3. Addition of new accounts. If a consumer opens a new
account permitting EFTs at a financial institution, and the
consumer already has received Regulation E disclosures for another
account at that institution, the institution need only disclose
terms and conditions that differ from those previously given.
4. Addition of service in interchange systems. If a
financial institution joins an interchange or shared network system
(which provides access to terminals operated by other
institutions), disclosures are required for additional EFT services
not previously available to consumers if the terms and conditions
differ from those previously disclosed.
5. Disclosures covering all EFT services offered. An
institution may provide disclosures covering all EFT services that
it offers, even if some consumers have not arranged to use all
services.
7(b) Content of Disclosures Paragraph 7(b)(1) - Liability of
Consumer
1. No liability imposed by financial institution. If a
financial institution chooses to impose zero liability for
unauthorized EFTs, it need not provide the liability disclosures.
If the institution later decides to impose liability, however, it
must first provide the disclosures.
2. Preauthorized transfers. If the only EFTs from an
account are preauthorized transfers, liability could arise if the
consumer fails to report unauthorized transfers reflected on a
periodic statement. To impose such liability on the consumer, the
institution must have disclosed the potential liability and the
telephone number and address for reporting unauthorized
transfers.
3. Additional information. At the institution's option,
the summary of the consumer's liability may include advice on
promptly reporting unauthorized transfers or the loss or theft of
the access device.
Paragraph 7(b)(2) - Telephone Number and Address
1. Disclosure of telephone numbers. An institution may
use the same or different telephone numbers in the disclosures for
the purpose of:
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. The telephone number
need not be incorporated into the text of the disclosure; for
example, the institution may instead insert a reference to a
telephone number that is readily available to the consumer, such as
“Call your branch office. The number is shown on your periodic
statement.” However, an institution must provide a specific
telephone number and address, on or with the disclosure statement,
for reporting a lost or stolen access device or a possible
unauthorized transfer.
Paragraph 7(b)(4) - Types of Transfers; Limitations
1. Security limitations. Information about limitations on
the frequency and dollar amount of transfers generally must be
disclosed in detail, even if related to security aspects of the
system. If the confidentiality of certain details is essential to
the security of an account or system, these details may be withheld
(but the fact that limitations exist must still be disclosed). For
example, an institution limits cash ATM withdrawals to $100 per
day. The institution may disclose that daily withdrawal limitations
apply and need not disclose that the limitations may not always be
in force (such as during periods when its ATMs are off-line).
2. Restrictions on certain deposit accounts. A limitation
on account activity that restricts the consumer's ability to make
EFTs must be disclosed even if the restriction also applies to
transfers made by nonelectronic means. For example, Regulation D
(12 CFR Part 204) restricts the number of payments to third parties
that may be made from a money market deposit account; an
institution that does not execute fund transfers in excess of those
limits must disclose the restriction as a limitation on the
frequency of EFTs.
3. Preauthorized transfers. Financial institutions are
not required to list preauthorized transfers among the types of
transfers that a consumer can make.
4. One-time EFTs initiated using information from a
check. Financial institutions must disclose the fact that
one-time EFTs initiated using information from a consumer's check
are among the types of transfers that a consumer can make. (See
Appendix A-2.)
Paragraph 7(b)(5) - Fees
1. Disclosure of EFT fees. An institution is required to
disclose all fees for EFTs or the right to make them. Others fees
(for example, minimum-balance fees, stop-payment fees, or account
overdrafts) may, but need not, be disclosed (but see Regulation DD,
12 CFR Part 230. An institution is not required to disclose fees
for inquiries made at an ATM since no transfer of funds is
involved.
2. Fees also applicable to non-EFT. A per-item fee for
EFTs must be disclosed even if the same fee is imposed on
nonelectronic transfers. If a per-item fee is imposed only under
certain conditions, such as when the transactions in the cycle
exceed a certain number, those conditions must be disclosed.
Itemization of the various fees may be provided on the disclosure
statement or on an accompanying document that is referenced in the
statement.
3. Interchange system fees. Fees paid by the
account-holding institution to the operator of a shared or
interchange ATM system need not be disclosed, unless they are
imposed on the consumer by the account-holding institution. Fees
for use of an ATM that are debited directly from the consumer's
account by an institution other than the account-holding
institution (for example, fees included in the transfer amount)
need not be disclosed. (See § 205.7(b)(11) for the general notice
requirement regarding fees that may be imposed by ATM operators and
by a network used to complete the transfer.)
Paragraph 7(b)(9) - Confidentiality
1. Information provided to third parties. An institution
must describe the circumstances under which any information
relating to an account to or from which EFTs are permitted will be
made available to third parties, not just information concerning
those EFTs. The term “third parties” includes affiliates such as
other subsidiaries of the same holding company.
Paragraph 7(b)(10) - Error Resolution
1. Substantially similar. The error resolution notice
must be substantially similar to the model form in appendix A of
part 205. An institution may use different wording so long as the
substance of the notice remains the same, may delete inapplicable
provisions (for example, the requirement for written confirmation
of an oral notification), and may substitute substantive state law
requirements affording greater consumer protection than Regulation
E.
2. Extended time-period for certain transactions. To take
advantage of the longer time periods for resolving errors under §
205.11(c)(3) (for new accounts as defined in Regulation CC (12 CFR
part 229), transfers initiated outside the United States, or
transfers resulting from POS debit-card transactions), a financial
institution must have disclosed these longer time periods.
Similarly, an institution that relies on the exception from
provisional crediting in § 205.11(c)(2) for accounts subject to
Regulation T (12 CFR part 220) must have disclosed accordingly.
7(c) Addition of Electronic Fund Transfer Services
1. Addition of electronic check conversion services.
One-time EFTs initiated using information from a consumer's check
are a new type of transfer requiring new disclosures, as
applicable. (See Appendix A-2.)
Section 205.8 - Change-in-Terms Notice; Error Resolution Notice
8(a) Change-in-Terms Notice
1. Form of notice. No specific form or wording is
required for a change-in-terms notice. The notice may appear on a
periodic statement, or may be given by sending a copy of a revised
disclosure statement, provided attention is directed to the change
(for example, in a cover letter referencing the changed term).
2. Changes not requiring notice. The following changes do
not require disclosure:
i. Closing some of an institution's ATMs;
ii. Cancellation of an access device.
3. Limitations on transfers. When the initial disclosures
omit details about limitations because secrecy is essential to the
security of the account or system, a subsequent increase in those
limitations need not be disclosed if secrecy is still essential.
If, however, an institution had no limits in place when the initial
disclosures were given and now wishes to impose limits for the
first time, it must disclose at least the fact that limits have
been adopted. (See also § 205.7(b)(4) and the related
commentary.)
4. Change in telephone number or address. When a
financial institution changes the telephone number or address used
for reporting possible unauthorized transfers, a change-in-terms
notice is required only if the institution will impose liability on
the consumer for unauthorized transfers under § 205.6. (See also §
205.6(a) and the related commentary.)
8(b) Error Resolution Notice
1. Change between annual and periodic notice. If an
institution switches from an annual to a periodic notice, or vice
versa, the first notice under the new method must be sent no later
than 12 months after the last notice sent under the old method.
2. Exception for new accounts. For new accounts,
disclosure of the longer error resolution time periods under §
205.11(c)(3) is not required in the annual error resolution notice
or in the notice that may be provided with each periodic statement
as an alternative to the annual notice.
Section 205.9 - Receipts at Electronic Terminals; Periodic
Statements 9(a) Receipts at Electronic Terminals
1. Receipts furnished only on request. The regulation
requires that a receipt be “made available.” A financial
institution may program its electronic terminals to provide a
receipt only to consumers who elect to receive one.
2. Third party providing receipt. An account-holding
institution may make terminal receipts available through third
parties such as merchants or other financial institutions.
3. Inclusion of promotional material. A financial
institution may include promotional material on receipts if the
required information is set forth clearly (for example, by
separating it from the promotional material). In addition, a
consumer may not be required to surrender the receipt or that
portion containing the required disclosures in order to take
advantage of a promotion.
4. Transfer not completed. The receipt requirement does
not apply to a transfer that is initiated but not completed (for
example, if the ATM is out of currency or the consumer decides not
to complete the transfer).
5. Receipts not furnished due to inadvertent error. If a
receipt is not provided to the consumer because of a bona fide
unintentional error, such as when a terminal runs out of paper or
the mechanism jams, no violation results if the financial
institution maintains procedures reasonably adapted to avoid such
occurrences.
6. Multiple transfers. If the consumer makes multiple
transfers at the same time, the financial institution may document
them on a single or on separate receipts.
Paragraph 9(a)(1) - Amount
1. Disclosure of transaction fee. The required display of
a fee amount on or at the terminal may be accomplished by
displaying the fee on a sign at the terminal or on the terminal
screen for a reasonable duration. Displaying the fee on a screen
provides adequate notice, as long as a consumer is given the option
to cancel the transaction after receiving notice of a fee. (See §
205.16 for the notice requirements applicable to ATM operators that
impose a fee for providing EFT services.)
2. Relationship between § 205.9(a)(1) and § 205.16. The
requirements of §§ 205.9(a)(1) and 205.16 are similar but not
identical.
i. Section 205.9(a)(1) requires that if the amount of the
transfer as shown on the receipt will include the fee, then the fee
must be disclosed either on a sign on or at the terminal, or on the
terminal screen. Section 205.16 requires disclosure both on a sign
on or at the terminal (in a prominent and conspicuous location) and
on the terminal screen. Section 205.16 permits disclosure on a
paper notice as an alternative to the on-screen disclosure.
ii. The disclosure of the fee on the receipt under § 205.9(a)(1)
cannot be used to comply with the alternative paper disclosure
procedure under § 205.16, if the receipt is provided at the
completion of the transaction because, pursuant to the statute, the
paper notice must be provided before the consumer is committed to
paying the fee.
iii. Section 205.9(a)(1) applies to any type of electronic
terminal as defined in Regulation E (for example, to POS terminals
as well as to ATMs), while § 205.16 applies only to ATMs.
Paragraph 9(a)(2) - Date
1. Calendar date. The receipt must disclose the calendar
date on which the consumer uses the electronic terminal. An
accounting or business date may be disclosed in addition if the
dates are clearly distinguished.
Paragraph 9(a)(3) - Type
1. Identifying transfer and account. Examples identifying
the type of transfer and the type of the consumer's account include
“withdrawal from checking,” “transfer from savings to checking,” or
“payment from savings.”
2. Exception. Identification of an account is not
required when the consumer can access only one asset account at a
particular time or terminal, even if the access device can normally
be used to access more than one account. For example, the consumer
may be able to access only one particular account at terminals not
operated by the account-holding institution, or may be able to
access only one particular account when the terminal is off-line.
The exception is available even if, in addition to accessing one
asset account, the consumer also can access a credit line.
3. Access to multiple accounts. If the consumer can use
an access device to make transfers to or from different accounts of
the same type, the terminal receipt must specify which account was
accessed, such as “withdrawal from checking I” or “withdrawal from
checking II.” If only one account besides the primary checking
account can be debited, the receipt can identify the account as
“withdrawal from other account.”
4. Generic descriptions. Generic descriptions may be used
for accounts that are similar in function, such as share draft or
NOW accounts and checking accounts. In a shared system, for
example, when a credit union member initiates transfers to or from
a share draft account at a terminal owned or operated by a bank,
the receipt may identify a withdrawal from the account as a
“withdrawal from checking.”
5. Point-of-sale transactions. There is no prescribed
terminology for identifying a transfer at a merchant's POS
terminal. A transfer may be identified, for example, as a purchase,
a sale of goods or services, or a payment to a third party. When a
consumer obtains cash from a POS terminal in addition to purchasing
goods, or obtains cash only, the documentation need not
differentiate the transaction from one involving the purchase of
goods.
Paragraph 9(a)(5) - Terminal Location
1. Options for identifying terminal. The institution may
provide either:
i. The city, state or foreign country, and the information in §§
205.9(a)(5) (i), (ii), or (iii), or
ii. A number or a code identifying the terminal. If the
institution chooses the second option, the code or terminal number
identifying the terminal where the transfer is initiated may be
given as part of a transaction code.
2. Omission of city name. The city may be omitted if the
generally accepted name (such as a branch name) contains the city
name.
3. Omission of a state. A state may be omitted from the
location information on the receipt if:
i. All the terminals owned or operated by the financial
institution providing the statement (or by the system in which it
participates) are located in that state, or
ii. All transfers occur at terminals located within 50 miles of
the financial institutions's main office.
4. Omission of a city and state. A city and state may be
omitted if all the terminals owned or operated by the financial
institution providing the statement (or by the system in which it
participates) are located in the same city.
Paragraph 9(a)(5)(i)
1. Street address. The address should include number and
street (or intersection); the number (or intersecting street) may
be omitted if the street alone uniquely identifies the terminal
location.
Paragraph 9(a)(5)(ii)
1. Generally accepted name. Examples of a generally
accepted name for a specific location include a branch of the
financial institution, a shopping center, or an airport.
Paragraph 9(a)(5)(iii)
1. Name of owner or operator of terminal. Examples of an
owner or operator of a terminal are a financial institution or a
retail merchant.
Paragraph 9(a)(6) - Third Party Transfer
1. Omission of third-party name. The receipt need not
disclose the third-party name if the name is provided by the
consumer in a form that is not machine readable (for example, if
the consumer indicates the payee by depositing a payment stub into
the ATM). If, on the other hand, the consumer keys in the identity
of the payee, the receipt must identify the payee by name or by
using a code that is explained elsewhere on the receipt.
2. Receipt as proof of payment. Documentation required
under the regulation constitutes prima facie proof of a payment to
another person, except in the case of a terminal receipt
documenting a deposit.
9(b) Periodic Statements
1. Periodic cycles. Periodic statements may be sent on a
cycle that is shorter than monthly. The statements must correspond
to periodic cycles that are reasonably equal, that is, do not vary
by more than four days from the regular cycle. The requirement of
reasonably equal cycles does not apply when an institution changes
cycles for operational or other reasons, such as to establish a new
statement day or date.
2. Interim statements. Generally, a financial institution
must provide periodic statements for each monthly cycle in which an
EFT occurs, and at least quarterly if a transfer has not occurred.
Where EFTs occur between regularly-scheduled cycles, interim
statements must be provided. For example, if an institution issues
quarterly statements at the end of March, June, September and
December, and the consumer initiates an EFT in February, an interim
statement for February must be provided. If an interim statement
contains interest or rate information, the institution must comply
with Regulation DD, 12 CFR 230.6.
3. Inactive accounts. A financial institution need not
send statements to consumers whose accounts are inactive as defined
by the institution.
4. Statement pickup. A financial institution may permit,
but may not require, consumers to pick up their periodic statements
at the financial institution.
5. Periodic statements limited to EFT activity. A
financial institution that uses a passbook as the primary means for
displaying account activity, but also allows the account to be
debited electronically, may provide a periodic statement
requirement that reflects only the EFTs and other required
disclosures (such as charges, account balances, and address and
telephone number for inquiries). (See § 205.9(c)(1)(i) for the
exception applicable to preauthorized transfers for passbook
accounts.)
6. Codes and accompanying documents. To meet the
documentation requirements for periodic statements, a financial
institution may:
i. Include copies of terminal receipts to reflect transfers
initiated by the consumer at electronic terminals;
ii. Enclose posting memos, deposit slips, and other documents
that, together with the statement, disclose all the required
information;
iii. Use codes for names of third parties or terminal locations
and explain the information to which the codes relate on an
accompanying document.
Paragraph 9(b)(1) - Transaction Information
1. Information obtained from others. While financial
institutions must maintain reasonable procedures to ensure the
integrity of data obtained from another institution, a merchant, or
other third parties, verification of each transfer that appears on
the periodic statement is not required.
Paragraph 9(b)(1)(i)
1. Incorrect deposit amount. If a financial institution
determines that the amount actually deposited at an ATM is
different from the amount entered by the consumer, the institution
need not immediately notify the consumer of the discrepancy. The
periodic statement reflecting the deposit may show either the
correct amount of the deposit or the amount entered by the consumer
along with the institution's adjustment.
Paragraph 9(b)(1)(iii)
1. Type of transfer. There is no prescribed terminology
for describing a type of transfer. Placement of the amount of the
transfer in the debit or the credit column is sufficient if other
information on the statement, such as a terminal location or
third-party name, enables the consumer to identify the type of
transfer.
Paragraph 9(b)(1)(iv)
1. Nonproprietary terminal in network. An institution
need not reflect on the periodic statement the street addresses,
identification codes, or terminal numbers for transfers initiated
in a shared or interchange system at a terminal operated by an
institution other than the account-holding institution. The
statement must, however, specify the entity that owns or operates
the terminal, plus the city and state.
Paragraph 9(b)(1)(v)
1. Recurring payments by government agency. The
third-party name for recurring payments from federal, state, or
local governments need not list the particular agency. For example,
“U.S. gov't” or “N.Y. sal” will suffice.
2. Consumer as third-party payee. If a consumer makes an
electronic fund transfer to another consumer, the financial
institution must identify the recipient by name (not just by an
account number, for example).
3. Terminal location/third party. A single entry may be
used to identify both the terminal location and the name of the
third party to or from whom funds are transferred. For example, if
a consumer purchases goods from a merchant, the name of the party
to whom funds are transferred (the merchant) and the location of
the terminal where the transfer is initiated will be satisfied by a
disclosure such as “XYZ Store, Anytown, Ohio.”
4. Account-holding institution as third party. Transfers
to the account-holding institution (by ATM, for example) must show
the institution as the recipient, unless other information on the
statement (such as, “loan payment from checking”) clearly indicates
that the payment was to the account-holding institution.
5. Consistency in third-party identity. The periodic
statement must disclose a third-party name as it appeared on the
receipt, whether it was, for example, the “dba” (doing business as)
name of the third party or the parent corporation's name.
6. Third-party identity on deposits at electronic
terminal. A financial institution need not identify third
parties whose names appear on checks, drafts, or similar paper
instruments deposited to the consumer's account at an electronic
terminal.
Paragraph 9(b)(3) - Fees
1. Disclosure of fees. The fees disclosed may include
fees for EFTs and for other nonelectronic services, and both fixed
fees and per-item fees; they may be given as a total or may be
itemized in part or in full.
2. Fees in interchange system. An account-holding
institution must disclose any fees it imposes on the consumer for
EFTs, including fees for ATM transactions in an interchange or
shared ATM system. Fees for use of an ATM imposed on the consumer
by an institution other than the account-holding institution and
included in the amount of the transfer by the terminal-operating
institution need not be separately disclosed on the periodic
statement.
3. Finance charges. The requirement to disclose any fees
assessed against the account does not include a finance charge
imposed on the account during the statement period.
Paragraph 9(b)(4) - Account Balances
1. Opening and closing balances. The opening and closing
balances must reflect both EFTs and other account activity.
Paragraph 9(b)(5) - Address and Telephone Number for Inquiries
1. Telephone number. A single telephone number, preceded
by the “direct inquiries to” language, will satisfy the
requirements of § 205.9(b)(5) and (6).
Paragraph 9(b)(6) - Telephone Number for Preauthorized Transfers
1. Telephone number. See comment 9(b)(5)-1.
9(c) Exceptions to the Periodic Statement Requirements for Certain
Accounts
1. Transfers between accounts. The regulation provides an
exception from the periodic statement requirement for certain
intra-institutional transfers between a consumer's accounts. The
financial institution must still comply with the applicable
periodic statement requirements for any other EFTs to or from the
account. For example, a Regulation E statement must be provided
quarterly for an account that also receives payroll deposits
electronically, or for any month in which an account is also
accessed by a withdrawal at an ATM.
Paragraph 9(c)(1) - Preauthorized Transfers to Accounts
1. Accounts that may be accessed only by preauthorized
transfers to the account. The exception for “accounts that may
be accessed only by preauthorized transfers to the account”
includes accounts that can be accessed by means other than EFTs,
such as checks. If, however, an account may be accessed by any EFT
other than preauthorized credits to the account, such as
preauthorized debits or ATM transactions, the account does not
qualify for the exception.
2. Reversal of direct deposits. For direct-deposit-only
accounts, a financial institution must send a periodic statement at
least quarterly. A reversal of a direct deposit to correct an error
does not trigger the monthly statement requirement when the error
represented a credit to the wrong consumer's account, a duplicate
credit, or a credit in the wrong amount. (See also comment
2(m)-5.)
9(d) Documentation for Foreign-Initiated Transfers
1. Foreign-initiated transfers. An institution must make
a good faith effort to provide all required information for
foreign-initiated transfers. For example, even if the institution
is not able to provide a specific terminal location, it should
identify the country and city in which the transfer was
initiated.
Section 205.10 - Preauthorized Transfers 10(a) Preauthorized
Transfers to Consumer's Account Paragraph 10(a)(1) - Notice by
Financial Institution
1. Content. No specific language is required for notice
regarding receipt of a preauthorized transfer. Identifying the
deposit is sufficient; however, simply providing the current
account balance is not.
2. Notice of credit. A financial institution may use
different methods of notice for various types or series of
preauthorized transfers, and the institution need not offer
consumers a choice of notice methods.
3. Positive notice. A periodic statement sent within two
business days of the scheduled transfer, showing the transfer, can
serve as notice of receipt.
4. Negative notice. The absence of a deposit entry (on a
periodic statement sent within two business days of the scheduled
transfer date) will serve as negative notice.
5. Telephone notice. If a financial institution uses the
telephone notice option, it should be able in most instances to
verify during a consumer's initial call whether a transfer was
received. The institution must respond within two business days to
any inquiry not answered immediately.
6. Phone number for passbook accounts. The financial
institution may use any reasonable means necessary to provide the
telephone number to consumers with passbook accounts that can only
be accessed by preauthorized credits and that do not receive
periodic statements. For example, it may print the telephone number
in the passbook, or include the number with the annual error
resolution notice.
7. Telephone line availability. To satisfy the
readily-available standard, the financial institution must provide
enough telephone lines so that consumers get a reasonably prompt
response. The institution need only provide telephone service
during normal business hours. Within its primary service area, an
institution must provide a local or toll-free telephone number. It
need not provide a toll-free number or accept collect long-distance
calls from outside the area where it normally conducts
business.
10(b) Written Authorization for Preauthorized Transfers From
Consumer's Account
1. Preexisting authorizations. The financial institution
need not require a new authorization before changing from
paper-based to electronic debiting when the existing authorization
does not specify that debiting is to occur electronically or
specifies that the debiting will occur by paper means. A new
authorization also is not required when a successor institution
begins collecting payments.
2. Authorization obtained by third party. The
account-holding financial institution does not violate the
regulation when a third-party payee fails to obtain the
authorization in writing or fails to give a copy to the consumer;
rather, it is the third-party payee that is in violation of the
regulation.
3. Written authorization for preauthorized transfers. The
requirement that preauthorized EFTs be authorized by the consumer
“only by a writing” cannot be met by a payee's signing a written
authorization on the consumer's behalf with only an oral
authorization from the consumer.
4. Use of a confirmation form. A financial institution or
designated payee may comply with the requirements of this section
in various ways. For example, a payee may provide the consumer with
two copies of a preauthorization form, and ask the consumer to sign
and return one and to retain the second copy.
5. Similarly authenticated. The similarly authenticated
standard permits signed, written authorizations to be provided
electronically. The writing and signature requirements of this
section are satisfied by complying with the Electronic Signatures
in Global and National Commerce Act, 15 U.S.C. 7001 et seq.,
which defines electronic records and electronic signatures.
Examples of electronic signatures include, but are not limited to,
digital signatures and security codes. A security code need not
originate with the account-holding institution. The authorization
process should evidence the consumer's identity and assent to the
authorization. The person that obtains the authorization must
provide a copy of the terms of the authorization to the consumer
either electronically or in paper form. Only the consumer may
authorize the transfer and not, for example, a third-party merchant
on behalf of the consumer.
6. Requirements of an authorization. An authorization is
valid if it is readily identifiable as such and the terms of the
preauthorized transfer are clear and readily understandable.
7. Bona fide error. Consumers sometimes authorize
third-party payees, by telephone or on-line, to submit recurring
charges against a credit card account. If the consumer indicates
use of a credit card account when in fact a debit card is being
used, the payee does not violate the requirement to obtain a
written authorization if the failure to obtain written
authorization was not intentional and resulted from a bona fide
error, and if the payee maintains procedures reasonably adapted to
avoid any such error. Procedures reasonably adapted to avoid error
will depend upon the circumstances. Generally, requesting the
consumer to specify whether the card to be used for the
authorization is a debit (or check) card or a credit card is a
reasonable procedure. Where the consumer has indicated that the
card is a credit card (or that the card is not a debit or check
card), the payee may rely on the consumer's statement without
seeking further information about the type of card. If the payee
believes, at the time of the authorization, that a credit card is
involved, and later finds that the card used is a debit card (for
example, because the consumer later brings the matter to the
payee's attention), the payee must obtain a written and signed or
(where appropriate) a similarly authenticated authorization as soon
as reasonably possible, or cease debiting the consumer's
account.
10(c) Consumer's Right To Stop Payment
1. Stop-payment order. The financial institution must
honor an oral stop-payment order made at least three business days
before a scheduled debit. If the debit item is resubmitted, the
institution must continue to honor the stop-payment order (for
example, by suspending all subsequent payments to the
payee-originator until the consumer notifies the institution that
payments should resume).
2. Revocation of authorization. Once a financial
institution has been notified that the consumer's authorization is
no longer valid, it must block all future payments for the
particular debit transmitted by the designated payee-originator.
(However, see comment 10(c)-3.) The institution may not wait for
the payee-originator to terminate the automatic debits. The
institution may confirm that the consumer has informed the
payee-originator of the revocation (for example, by requiring a
copy of the consumer's revocation as written confirmation to be
provided within 14 days of an oral notification). If the
institution does not receive the required written confirmation
within the 14-day period, it may honor subsequent debits to the
account.
3. Alternative procedure for processing a stop-payment
request. If an institution does not have the capability to
block a preauthorized debit from being posted to the consumer's
account - as in the case of a preauthorized debit made through a
debit card network or other system, for example - the institution
may instead comply with the stop-payment requirements by using a
third party to block the transfer(s), as long as the consumer's
account is not debited for the payment.
10(d) Notice of Transfers Varying in Amount Paragraph 10(d)(1) -
Notice
1. Preexisting authorizations. A financial institution
holding the consumer's account does not violate the regulation if
the designated payee fails to provide notice of varying
amounts.
Paragraph 10(d)(2) - Range
1. Range. A financial institution or designated payee
that elects to offer the consumer a specified range of amounts for
debiting (in lieu of providing the notice of transfers varying in
amount) must provide an acceptable range that could be anticipated
by the consumer. For example, if the transfer is for payment of a
gas bill, an appropriate range might be based on the highest bill
in winter and the lowest bill in summer.
2. Transfers to an account of the consumer held at another
institution. A financial institution need not provide a
consumer the option of receiving notice with each varying transfer,
and may instead provide notice only when a debit to an account of
the consumer falls outside a specified range or differs by more
than a specified amount from the most recent transfer, if the funds
are transferred and credited to an account of the consumer held at
another financial institution. The specified range or amount,
however, must be one that reasonably could be anticipated by the
consumer, and the institution must notify the consumer of the range
or amount at the time the consumer provides authorization for the
preauthorized transfers. For example, if the transfer is for
payment of interest for a fixed-rate certificate of deposit
account, an appropriate range might be based on a month containing
28 days and a month containing 31 days.
10(e) Compulsory Use Paragraph 10(e)(1) - Credit
1. Loan payments. Creditors may not require repayment of
loans by electronic means on a preauthorized, recurring basis. A
creditor may offer a program with a reduced annual percentage rate
or other cost-related incentive for an automatic repayment feature,
provided the program with the automatic payment feature is not the
only loan program offered by the creditor for the type of credit
involved. Examples include:
i. Mortgages with graduated payments in which a pledged savings
account is automatically debited during an initial period to
supplement the monthly payments made by the borrower.
ii. Mortgage plans calling for preauthorized biweekly payments
that are debited electronically to the consumer's account and
produce a lower total finance charge.
2. Overdraft. A financial institution may require the
automatic repayment of an overdraft credit plan even if the
overdraft extension is charged to an open-end account that may be
accessed by the consumer in ways other than by overdrafts.
Paragraph 10(e)(2) - Employment or Government Benefit
1. Payroll. An employer (including a financial
institution) may not require its employees to receive their salary
by direct deposit to any particular institution. An employer may
require direct deposit of salary by electronic means if employees
are allowed to choose the institution that will receive the direct
deposit. Alternatively, an employer may give employees the choice
of having their salary deposited at a particular institution
(designated by the employer) or receiving their salary by another
means, such as by check or cash.
Section 205.11 - Procedures for Resolving Errors 11(a) Definition
of Error
1. Terminal location. With regard to deposits at an ATM,
a consumer's request for the terminal location or other information
triggers the error resolution procedures, but the financial
institution need only provide the ATM location if it has captured
that information.
2. Verifying an account debit or credit. If the consumer
contacts the financial institution to ascertain whether a payment
(for example, in a home-banking or bill-payment program) or any
other type of EFT was debited to the account, or whether a deposit
made via ATM, preauthorized transfer, or any other type of EFT was
credited to the account, without asserting an error, the error
resolution procedures do not apply.
3. Loss or theft of access device. A financial
institution is required to comply with the error resolution
procedures when a consumer reports the loss or theft of an access
device if the consumer also alleges possible unauthorized use as a
consequence of the loss or theft.
4. Error asserted after account closed. The financial
institution must comply with the error resolution procedures when a
consumer properly asserts an error, even if the account has been
closed.
5. Request for documentation or information. A request
for documentation or other information must be treated as an error
unless it is clear that the consumer is requesting a duplicate copy
for tax or other record-keeping purposes.
6. Terminal receipts for transfers of $15 or less. The
fact that an institution does not make a terminal receipt available
for a transfer of $15 or less in accordance with § 205.9(e) is not
an error for purposes of §§ 205.11(a)(1)(vi) or (vii).
11(b) Notice of Error From Consumer Paragraph 11(b)(1) - Timing;
Contents
1. Content of error notice. The notice of error is
effective even if it does not contain the consumer's account
number, so long as the financial institution is able to identify
the account in question. For example, the consumer could provide a
Social Security number or other unique means of identification.
2. Investigation pending receipt of information. While a
financial institution may request a written, signed statement from
the consumer relating to a notice of error, it may not delay
initiating or completing an investigation pending receipt of the
statement.
3. Statement held for consumer. When a consumer has
arranged for periodic statements to be held until picked up, the
statement for a particular cycle is deemed to have been transmitted
on the date the financial institution first makes the statement
available to the consumer.
4. Failure to provide statement. When a financial
institution fails to provide the consumer with a periodic
statement, a request for a copy is governed by this section if the
consumer gives notice within 60 days from the date on which the
statement should have been transmitted.
5. Discovery of error by institution. The error
resolution procedures of this section apply when a notice of error
is received from the consumer, and not when the financial
institution itself discovers and corrects an error.
6. Notice at particular phone number or address. A
financial institution may require the consumer to give notice only
at the telephone number or address disclosed by the institution,
provided the institution maintains reasonable procedures to refer
the consumer to the specified telephone number or address if the
consumer attempts to give notice to the institution in a different
manner.
7. Effect of late notice. An institution is not required
to comply with the requirements of this section for any notice of
error from the consumer that is received by the institution later
than 60 days from the date on which the periodic statement first
reflecting the error is sent. Where the consumer's assertion of
error involves an unauthorized EFT, however, the institution must
comply with § 205.6 before it may impose any liability on the
consumer.
Paragraph 11(b)(2) - Written Confirmation
1. Written confirmation-of-error notice. If the consumer
sends a written confirmation of error to the wrong address, the
financial institution must process the confirmation through normal
procedures. But the institution need not provisionally credit the
consumer's account if the written confirmation is delayed beyond 10
business days in getting to the right place because it was sent to
the wrong address.
11(c) Time Limits and Extent of Investigation
1. Notice to consumer. Unless otherwise indicated in this
section, the financial institution may provide the required notices
to the consumer either orally or in writing.
2. Written confirmation of oral notice. A financial
institution must begin its investigation promptly upon receipt of
an oral notice. It may not delay until it has received a written
confirmation.
3. Charges for error resolution. If a billing error
occurred, whether as alleged or in a different amount or manner,
the financial institution may not impose a charge related to any
aspect of the error-resolution process (including charges for
documentation or investigation). Since the act grants the consumer
error-resolution rights, the institution should avoid any chilling
effect on the good-faith assertion of errors that might result if
charges are assessed when no billing error has occurred.
4. Correction without investigation. A financial
institution may make, without investigation, a final correction to
a consumer's account in the amount or manner alleged by the
consumer to be in error, but must comply with all other applicable
requirements of § 205.11.
5. Correction notice. A financial institution may include
the notice of correction on a periodic statement that is mailed or
delivered within the 10-business-day or 45-calendar-day time limits
and that clearly identifies the correction to the consumer's
account. The institution must determine whether such a mailing will
be prompt enough to satisfy the requirements of this section,
taking into account the specific facts involved.
6. Correction of an error. If the financial institution
determines an error occurred, within either the 10-day or 45-day
period, it must correct the error (subject to the liability
provisions of §§ 205.6 (a) and (b)) including, where applicable,
the crediting of interest and the refunding of any fees imposed by
the institution. In a combined credit/EFT transaction, for example,
the institution must refund any finance charges incurred as a
result of the error. The institution need not refund fees that
would have been imposed whether or not the error occurred.
7. Extent of required investigation. A financial
institution complies with its duty to investigate, correct, and
report its determination regarding an error described in §
205.11(a)(1)(vii) by transmitting the requested information,
clarification, or documentation within the time limits set forth in
§ 205.11(c). If the institution has provisionally credited the
consumer's account in accordance with § 205.11(c)(2), it may debit
the amount upon transmitting the requested information,
clarification, or documentation.
Paragraph 11(c)(2)(i)
1. Compliance with all requirements. Financial
institutions exempted from provisionally crediting a consumer's
account under § 205.11(c)(2)(i) (A) and (B) must still comply with
all other requirements of § 205.11.
Paragraph 11(c)(3) - Extension of Time Periods
1. POS debit card transactions. The extended deadlines
for investigating errors resulting from POS debit card transactions
apply to all debit card transactions, including those for cash
only, at merchants' POS terminals, and also including mail and
telephone orders. The deadlines do not apply to transactions at an
ATM, however, even though the ATM may be in a merchant
location.
Paragraph 11(c)(4) - Investigation
1. Third parties. When information or documentation
requested by the consumer is in the possession of a third party
with whom the financial institution does not have an agreement, the
institution satisfies the error resolution requirement by so
advising the consumer within the specified time period.
2. Scope of investigation. When an alleged error involves
a payment to a third party under the financial institution's
telephone bill-payment plan, a review of the institution's own
records is sufficient, assuming no agreement exists between the
institution and the third party concerning the bill-payment
service.
3. POS transfers. When a consumer alleges an error
involving a transfer to a merchant via a POS terminal, the
institution must verify the information previously transmitted when
executing the transfer. For example, the financial institution may
request a copy of the sales receipt to verify that the amount of
the transfer correctly corresponds to the amount of the consumer's
purchase.
4. Agreement. An agreement that a third party will honor
an access device is an agreement for purposes of this paragraph. A
financial institution does not have an agreement for purposes of §
205.11(c)(4)(ii) solely because it participates in transactions
that occur under the federal recurring payments programs, or that
are cleared through an ACH or similar arrangement for the clearing
and settlement of fund transfers generally, or because it agrees to
be bound by the rules of such an arrangement.
5. No EFT agreement. When there is no agreement between
the institution and the third party for the type of EFT involved,
the financial institution must review any relevant information
within the institution's own records for the particular account to
resolve the consumer's claim. The extent of the investigation
required may vary depending on the facts and circumstances.
However, a financial institution may not limit its investigation
solely to the payment instructions where additional information
within its own records pertaining to the particular account in
question could help to resolve a consumer's claim.
Information that may be reviewed as part of an investigation
might include:
i. The ACH transaction records for the transfer;
ii. The transaction history of the particular account for a
reasonable period of time immediately preceding the allegation of
error;
iii. Whether the check number of the transaction in question is
notably out-of-sequence;
iv. The location of either the transaction or the payee in
question relative to the consumer's place of residence and habitual
transaction area;
v. Information relative to the account in question within the
control of the institution's third-party service providers if the
financial institution reasonably believes that it may have records
or other information that could be dispositive; or
vi. Any other information appropriate to resolve the claim.
11(d) Procedures if Financial Institution Determines No Error or
Different Error Occurred
1. Error different from that alleged. When a financial
institution determines that an error occurred in a manner or amount
different from that described by the consumer, it must comply with
the requirements of both § 205.11 (c) and (d), as relevant. The
institution may give the notice of correction and the explanation
separately or in a combined form.
Paragraph 11(d)(1) - Written Explanation
1. Request for documentation. When a consumer requests
copies of documents, the financial institution must provide the
copies in an understandable form. If an institution relied on
magnetic tape it must convert the applicable data into readable
form, for example, by printing it and explaining any codes.
Paragraph 11(d)(2) - Debiting Provisional Credit
1. Alternative procedure for debiting of credited funds.
The financial institution may comply with the requirements of this
section by notifying the consumer that the consumer's account will
be debited five business days from the transmittal of the
notification, specifying the calendar date on which the debiting
will occur.
2. Fees for overdrafts. The financial institution may not
impose fees for items it is required to honor under § 205.11. It
may, however, impose any normal transaction or item fee that is
unrelated to an overdraft resulting from the debiting. If the
account is still overdrawn after five business days, the
institution may impose the fees or finance charges to which it is
entitled, if any, under an overdraft credit plan.
11(e) Reassertion of Error
1. Withdrawal of error; right to reassert. The financial
institution has no further error resolution responsibilities if the
consumer voluntarily withdraws the notice alleging an error. A
consumer who has withdrawn an allegation of error has the right to
reassert the allegation unless the financial institution had
already complied with all of the error resolution requirements
before the allegation was withdrawn. The consumer must do so,
however, within the original 60-day period.
Section 205.12 - Relation to Other Laws 12(a) Relation to Truth in
Lending
1. Determining applicable regulation. i. For transactions
involving access devices that also function as credit cards,
whether Regulation E or Regulation Z (12 CFR part 226) applies
depends on the nature of the transaction. For example, if the
transaction solely involves an extension of credit, and does not
include a debit to a checking account (or other consumer asset
account), the liability limitations and error resolution
requirements of Regulation Z apply. If the transaction debits a
checking account only (with no credit extended), the provisions of
Regulation E apply. If the transaction debits a checking account
but also draws on an overdraft line of credit attached to the
account, Regulation E's liability limitations apply, in addition to
§§ 226.13 (d) and (g) of Regulation Z (which apply because of the
extension of credit associated with the overdraft feature on the
checking account). If a consumer's access device is also a credit
card and the device is used to make unauthorized withdrawals from a
checking account, but also is used to obtain unauthorized cash
advances directly from a line of credit that is separate from the
checking account, both Regulation E and Regulation Z apply.
ii. The following examples illustrate these principles:
A. A consumer has a card that can be used either as a credit
card or a debit card. When used as a debit card, the card draws on
the consumer's checking account. When used as a credit card, the
card draws only on a separate line of credit. If the card is stolen
and used as a credit card to make purchases or to get cash advances
at an ATM from the line of credit, the liability limits and error
resolution provisions of Regulation Z apply; Regulation E does not
apply.
B. In the same situation, if the card is stolen and is used as a
debit card to make purchases or to get cash withdrawals at an ATM
from the checking account, the liability limits and error
resolution provisions of Regulation E apply; Regulation Z does not
apply.
C. In the same situation, assume the card is stolen and used
both as a debit card and as a credit card; for example, the thief
makes some purchases using the card as a debit card, and other
purchases using the card as a credit card. Here, the liability
limits and error resolution provisions of Regulation E apply to the
unauthorized transactions in which the card was used as a debit
card, and the corresponding provisions of Regulation Z apply to the
unauthorized transactions in which the card was used as a credit
card.
D. Assume a somewhat different type of card, one that draws on
the consumer's checking account and can also draw on an overdraft
line of credit attached to the checking account. There is no
separate line of credit, only the overdraft line, associated with
the card. In this situation, if the card is stolen and used, the
liability limits and the error resolution provisions of Regulation
E apply. In addition, if the use of the card has resulted in
accessing the overdraft line of credit, the error resolution
provisions of § 226.13(d) and (g) of Regulation Z also apply, but
not the other error resolution provisions of Regulation Z.
2. Issuance rules. For access devices that also
constitute credit cards, the issuance rules of Regulation E apply
if the only credit feature is a preexisting credit line attached to
the asset account to cover overdrafts (or to maintain a specified
minimum balance) or an overdraft service, as defined in §
205.17(a). Regulation Z (12 CFR part 226) rules apply if there is
another type of credit feature; for example, one permitting direct
extensions of credit that do not involve the asset account.
3. Overdraft service. The addition of an overdraft
service, as that term is defined in § 205.17(a), to an accepted
access device does not constitute the addition of a credit feature
subject to Regulation Z. Instead, the provisions of Regulation E
apply, including the liability limitations (§ 205.6) and the
requirement to obtain consumer consent to the service before any
fees or charges for paying an overdraft may be assessed on the
account (§ 205.17).
12(b) Preemption of Inconsistent State Laws
1. Specific determinations. The regulation prescribes
standards for determining whether state laws that govern EFTs, and
state laws regarding gift certificates, store gift cards, or
general-use prepaid cards that govern dormancy, inactivity, or
service fees, or expiration dates, are preempted by the act and the
regulation. A state law that is inconsistent may be preempted even
if the Board has not issued a determination. However, nothing in §
205.12(b) provides a financial institution with immunity for
violations of state law if the institution chooses not to make
state disclosures and the Board later determines that the state law
is not preempted.
2. Preemption determination. The Board determined that
certain provisions in the state law of Michigan are preempted by
the federal law, effective March 30, 1981:
i. Definition of unauthorized use. Section 5(4) is preempted to
the extent that it relates to the section of state law governing
consumer liability for unauthorized use of an access device.
ii. Consumer liability for unauthorized use of an account.
Section 14 is inconsistent with § 205.6 and is less protective of
the consumer than the federal law. The state law places liability
on the consumer for the unauthorized use of an account in cases
involving the consumer's negligence. Under the federal law, a
consumer's liability for unauthorized use is not related to the
consumer's negligence and depends instead on the consumer's
promptness in reporting the loss or theft of the access device.
iii. Error resolution. Section 15 is preempted because it is
inconsistent with § 205.11 and is less protective of the consumer
than the federal law. The state law allows financial institutions
up to 70 days to resolve errors, whereas the federal law generally
requires errors to be resolved within 45 days.
iv. Receipts and periodic statements. Sections 17 and 18 are
preempted because they are inconsistent with § 205.9. The state
provisions require a different disclosure of information than does
the federal law. The receipt provision is also preempted because it
allows the consumer to be charged for receiving a receipt if a
machine cannot furnish one at the time of a transfer.
Section 205.13 - Administrative Enforcement; Record Retention 13(b)
Record Retention
1. Requirements. A financial institution need not retain
records that it has given disclosures and documentation to each
consumer; it need only retain evidence demonstrating that its
procedures reasonably ensure the consumers' receipt of required
disclosures and documentation.
Section 205.14 - Electronic Fund Transfer Service Provider Not
Holding Consumer's Account 14(a) Electronic Fund Transfer Service
Providers Subject to Regulation
1. Applicability. This section applies only when a
service provider issues an access device to a consumer for
initiating transfers to or from the consumer's account at a
financial institution and the two entities have no agreement
regarding this EFT service. If the service provider does not issue
an access device to the consumer for accessing an account held by
another institution, it does not qualify for the treatment accorded
by § 205.14. For example, this section does not apply to an
institution that initiates preauthorized payroll deposits to
consumer accounts on behalf of an employer. By contrast, § 205.14
can apply to an institution that issues a code for initiating
telephone transfers to be carried out through the ACH from a
consumer's account at another institution. This is the case even if
the consumer has accounts at both institutions.
2. ACH agreements. The ACH rules generally do not
constitute an agreement for purposes of this section. However, an
ACH agreement under which members specifically agree to honor each
other's debit cards is an “agreement,” and thus this section does
not apply.
14(b) Compliance by Electronic Fund Transfer Service Provider
1. Liability. The service provider is liable for
unauthorized EFTs that exceed limits on the consumer's liability
under § 205.6.
Paragraph 14(b)(1) - Disclosures and Documentation
1. Periodic statements from electronic fund transfer service
provider. A service provider that meets the conditions set
forth in this paragraph does not have to issue periodic statements.
A service provider that does not meet the conditions need only
include on periodic statements information about transfers
initiated with the access device it has issued.
Paragraph 14(b)(2) - Error Resolution
1. Error resolution. When a consumer notifies the service
provider of an error, the EFT service provider must investigate and
resolve the error in compliance with § 205.11 as modified by §
205.14(b)(2). If an error occurred, any fees or charges imposed as
a result of the error, either by the service provider or by the
account-holding institution (for example, overdraft or dishonor
fees) must be reimbursed to the consumer by the service
provider.
14(c) Compliance by Account-Holding Institution Paragraph 14(c)(1)
1. Periodic statements from account-holding institution.
The periodic statement provided by the account-holding institution
need only contain the information required by § 205.9(b)(1).
Section 205.16 - Disclosures at Automated Teller Machines 16(b)
General Paragraph 16(b)(1)
1. Specific notices. An ATM operator that imposes a fee
for a specific type of transaction - such as for a cash withdrawal,
but not for a balance inquiry, or for some cash withdrawals, but
not for others (such as where the card was issued by a foreign bank
or by a card issuer that has entered into a special contractual
relationship with the ATM operator regarding surcharges) - may
provide a notice on or at the ATM that a fee will be imposed or a
notice that a fee may be imposed for providing EFT services or may
specify the type of EFT for which a fee is imposed. If, however, a
fee will be imposed in all instances, the notice must state that a
fee will be imposed.
Section 205.17 - Requirements for Overdraft Services 17(a)
Definition
1. Exempt securities- and commodities-related lines of
credit. The definition of “overdraft service” does not include
the payment of transactions in a securities or commodities account
pursuant to which credit is extended by a broker-dealer registered
with the Securities and Exchange Commission or the Commodity
Futures Trading Commission.
17(b) Opt-In Requirement
1. Scope.
i. Account-holding institutions. Section 205.17(b)
applies to ATM and one-time debit card transactions made with a
debit card issued by or on behalf of the account-holding
institution. Section 205.17(b) does not apply to ATM and one-time
debit card transactions made with a debit card issued by or through
a third party unless the debit card is issued on behalf of the
account-holding institution.
ii. Coding of transactions. A financial institution
complies with the rule if it adapts its systems to identify debit
card transactions as either one-time or recurring. If it does so,
the financial institution may rely on the transaction's coding by
merchants, other institutions, and other third parties as a
one-time or a preauthorized or recurring debit card
transaction.
iii. One-time debit card transactions. The opt-in applies
to any one-time debit card transaction, whether the card is used,
for example, at a point-of-sale, in an on-line transaction, or in a
telephone transaction.
iv. Application of fee prohibition. The prohibition on
assessing overdraft fees under § 205.17(b)(1) applies to all
institutions. For example, the prohibition applies to an
institution that has a policy and practice of declining to
authorize and pay any ATM or one-time debit card transactions when
the institution has a reasonable belief at the time of the
authorization request that the consumer does not have sufficient
funds available to cover the transaction. However, the institution
is not required to comply with §§ 205.17(b)(1)(i)-(iv), including
the notice and opt-in requirements, if it does not assess overdraft
fees for paying ATM or one-time debit card transactions that
overdraw the consumer's account. Assume an institution does not
provide an opt-in notice, but authorizes an ATM or one-time debit
card transaction on the reasonable belief that the consumer has
sufficient funds in the account to cover the transaction. If, at
settlement, the consumer has insufficient funds in the account (for
example, due to intervening transactions that post to the
consumer's account), the institution is not permitted to assess an
overdraft fee or charge for paying that transaction.
2. No affirmative consent. A financial institution may
pay overdrafts for ATM and one-time debit card transactions even if
a consumer has not affirmatively consented or opted in to the
institution's overdraft service. If the institution pays such an
overdraft without the consumer's affirmative consent, however, it
may not impose a fee or charge for doing so. These provisions do
not limit the institution's ability to debit the consumer's account
for the amount overdrawn if the institution is permitted to do so
under applicable law.
3. Overdraft transactions not required to be authorized or
paid. Section 205.17 does not require a financial institution
to authorize or pay an overdraft on an ATM or one-time debit card
transaction even if the consumer has affirmatively consented to an
institution's overdraft service for such transactions.
4. Reasonable opportunity to provide affirmative consent.
A financial institution provides a consumer with a reasonable
opportunity to provide affirmative consent when, among other
things, it provides reasonable methods by which the consumer may
affirmatively consent. A financial institution provides such
reasonable methods, if -
i. By mail. The institution provides a form for the
consumer to fill out and mail to affirmatively consent to the
service.
ii. By telephone. The institution provides a
readily-available telephone line that consumers may call to provide
affirmative consent.
iii. By electronic means. The institution provides an
electronic means for the consumer to affirmatively consent. For
example, the institution could provide a form that can be accessed
and processed at its Web site, where the consumer may click on a
check box to provide consent and confirm that choice by clicking on
a button that affirms the consumer's consent.
iv. In person. The institution provides a form for the
consumer to complete and present at a branch or office to
affirmatively consent to the service.
5. Implementing opt-in at account-opening. A financial
institution may provide notice regarding the institution's
overdraft service prior to or at account-opening. A financial
institution may require a consumer, as a necessary step to opening
an account, to choose whether or not to opt into the payment of ATM
or one-time debit card transactions pursuant to the institution's
overdraft service. For example, the institution could require the
consumer, at account opening, to sign a signature line or check a
box on a form (consistent with comment 17(b)-6) indicating whether
or not the consumer affirmatively consents at account opening. If
the consumer does not check any box or provide a signature, the
institution must assume that the consumer does not opt in. Or, the
institution could require the consumer to choose between an account
that does not permit the payment of ATM or one-time debit card
transactions pursuant to the institution's overdraft service and an
account that permits the payment of such overdrafts, provided that
the accounts comply with § 205.17(b)(2) and § 205.17(b)(3).
6. Affirmative consent required. A consumer's affirmative
consent, or opt-in, to a financial institution's overdraft service
must be obtained separately from other consents or acknowledgements
obtained by the institution, including a consent to receive
disclosures electronically. An institution may obtain a consumer's
affirmative consent by providing a blank signature line or check
box that the consumer could sign or select to affirmatively
consent, provided that the signature line or check box is used
solely for purposes of evidencing the consumer's choice whether or
not to opt into the overdraft service and not for other purposes.
An institution does not obtain a consumer's affirmative consent by
including preprinted language about the overdraft service in an
account disclosure provided with a signature card or contract that
the consumer must sign to open the account and that acknowledges
the consumer's acceptance of the account terms. Nor does an
institution obtain a consumer's affirmative consent by providing a
signature card that contains a pre-selected check box indicating
that the consumer is requesting the service.
7. Confirmation. A financial institution may comply with
the requirement in § 205.17(b)(1)(iv) to provide confirmation of
the consumer's affirmative consent by mailing or delivering to the
consumer a copy of the consumer's completed opt-in notice, or by
mailing or delivering a letter or notice to the consumer
acknowledging that the consumer has elected to opt into the
institution's service. The confirmation, which must be provided in
writing, or electronically if the consumer agrees, must include a
statement informing the consumer of the right to revoke the opt-in
at any time. See § 205.17(d)(6), which permits institutions
to include the revocation statement on the initial opt-in notice.
An institution complies with the confirmation requirement if it has
adopted reasonable procedures designed to ensure that overdraft
fees are assessed only in connection with transactions paid after
the confirmation has been mailed or delivered to the consumer.
8. Outstanding Negative Balance. If a fee or charge is
based on the amount of the outstanding negative balance, an
institution is prohibited from assessing any such fee if the
negative balance is solely attributable to an ATM or one-time debit
card transaction, unless the consumer has opted into the
institution's overdraft service for ATM or one-time debit card
transactions. However, the rule does not prohibit an institution
from assessing such a fee if the negative balance is attributable
in whole or in part to a check, ACH, or other type of transaction
not subject to the prohibition on assessing overdraft fees in §
205.17(b)(1).
9. Daily or Sustained Overdraft, Negative Balance, or Similar
Fee or Charge
i. Daily or sustained overdraft, negative balance, or similar
fees or charges. If a consumer has not opted into the
institution's overdraft service for ATM or one-time debit card
transactions, the fee prohibition in § 205.17(b)(1) applies to all
overdraft fees or charges for paying those transactions, including
but not limited to daily or sustained overdraft, negative balance,
or similar fees or charges. Thus, where a consumer's negative
balance is solely attributable to an ATM or one-time debit card
transaction, the rule prohibits the assessment of such fees unless
the consumer has opted in. However, the rule does not prohibit an
institution from assessing daily or sustained overdraft, negative
balance, or similar fees or charges if a negative balance is
attributable in whole or in part to a check, ACH, or other type of
transaction not subject to the fee prohibition. When the negative
balance is attributable in part to an ATM or one-time debit card
transaction, and in part to a check, ACH, or other type of
transaction not subject to the fee prohibition, the date on which
such a fee may be assessed is based on the date on which the check,
ACH, or other type of transaction is paid into overdraft.
ii. Examples. The following examples illustrate how an
institution complies with the fee prohibition. For each example,
assume the following: (a) The consumer has not opted into the
payment of ATM or one-time debit card overdrafts; (b) these
transactions are paid into overdraft because the amount of the
transaction at settlement exceeded the amount authorized or the
amount was not submitted for authorization; (c) under the account
agreement, the institution may charge a per-item fee of $20 for
each overdraft, and a one-time sustained overdraft fee of $20 on
the fifth consecutive day the consumer's account remains overdrawn;
(d) the institution posts ATM and debit card transactions before
other transactions; and (e) the institution allocates deposits to
account debits in the same order in which it posts debits.
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. For a consumer who does not
opt into the institution's overdraft service for ATM and one-time
debit card transactions, an institution may also comply with the
fee prohibition in § 205.17(b)(1) by not assessing daily or
sustained overdraft, negative balance, or similar fees or charges
unless a consumer's negative balance is attributable solely to
check, ACH or other types of transactions not subject to the fee
prohibition while that negative balance remains outstanding. In
such case, the institution would not have to determine how to
allocate subsequent deposits that reduce but do not eliminate the
negative balance. For example, if a consumer has a negative balance
of $30, of which $10 is attributable to a one-time debit card
transaction, an institution complies with the fee prohibition if it
does not assess a sustained overdraft fee while that negative
balance remains outstanding.
Paragraph 17(b)(2) - Conditioning Payment of Other Overdrafts on
Consumer's Affirmative Consent
1. Application of the same criteria. The prohibitions on
conditioning in § 205.17(b)(2) generally require an institution to
apply the same criteria for deciding when to pay overdrafts for
checks, ACH transactions, and other types of transactions, whether
or not the consumer has affirmatively consented to the
institution's overdraft service with respect to ATM and one-time
debit card overdrafts. For example, if an institution's internal
criteria would lead the institution to pay a check overdraft if the
consumer had affirmatively consented to the institution's overdraft
service for ATM and one-time debit card transactions, it must also
apply the same criteria in a consistent manner in determining
whether to pay the check overdraft if the consumer has not opted
in.
2. No requirement to pay overdrafts on checks, ACH
transactions, or other types of transactions. The prohibition
on conditioning in § 205.17(b)(2) does not require an institution
to pay overdrafts on checks, ACH transactions, or other types of
transactions in all circumstances. Rather, the rule simply
prohibits institutions from considering the consumer's decision not
to opt in when deciding whether to pay overdrafts for checks, ACH
transactions, or other types of transactions.
Paragraph 17(b)(3) - Same Account Terms, Conditions, and Features
1. Variations in terms, conditions, or features. A
financial institution may not vary the terms, conditions, or
features of an account provided to a consumer who does not
affirmatively consent to the payment of ATM or one-time debit card
transactions pursuant to the institution's overdraft service. This
includes, but is not limited to:
i. Interest rates paid and fees assessed;
ii. The type of ATM or debit card provided to the consumer. For
instance, an institution may not provide consumers who do not opt
in a PIN-only card while providing a debit card with both PIN and
signature-debit functionality to consumers who opt in;
iii. Minimum balance requirements; or
iv. Account features such as on-line bill payment services.
2. Limited-feature bank accounts. Section 205.17(b)(3)
does not prohibit institutions from offering deposit account
products with limited features, provided that a consumer is not
required to open such an account because the consumer did not opt
in. For example, § 205.17(b)(3) does not prohibit an institution
from offering a checking account designed to comply with state
basic banking laws, or designed for consumers who are not eligible
for a checking account because of their credit or checking account
history, which may include features limiting the payment of
overdrafts. However, a consumer who applies, and is otherwise
eligible, for a full-service or other particular deposit account
product may not be provided instead with the account with more
limited features because the consumer has declined to opt in.
Paragraph 17(b)(4) - Exception to the Notice and Opt-In Requirement
17(c) Timing
1. Early compliance. A financial institution may provide
the notice required by § 205(b)(1)(i) and obtain the consumer's
affirmative consent to the financial institution's overdraft
service for ATM and one-time debit card transactions prior to July
1, 2010, provided that the financial institution complies with all
of the requirements of this section.
2. Permitted fees or charges. Fees or charges for ATM and
one-time debit card overdrafts may be assessed only for overdrafts
paid on or after the date the financial institution receives the
consumer's affirmative consent to the institution's overdraft
service. See also comment 17(b)-7.
17(d) Content and Format
1. Overdraft service. The description of the
institution's overdraft service should indicate that the consumer
has the right to affirmatively consent, or opt into payment of
overdrafts for ATM and one-time debit card transactions. The
description should also disclose the institution's policies
regarding the payment of overdrafts for other transactions,
including checks, ACH transactions, and automatic bill payments,
provided that this content is not more prominent than the
description of the consumer's right to opt into payment of
overdrafts for ATM and one-time debit card transactions. As
applicable, the institution also should indicate that it pays
overdrafts at its discretion, and should briefly explain that if
the institution does not authorize and pay an overdraft, it may
decline the transaction.
2. Maximum fee. If the amount of a fee may vary from
transaction to transaction, the financial institution may indicate
that the consumer may be assessed a fee “up to” the maximum fee.
The financial institution must disclose all applicable overdraft
fees, including but not limited to:
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. The opt-in notice must include the
methods by which the consumer may consent to the overdraft service
for ATM and one-time debit card transactions. Institutions may
tailor Model Form A-9 to the methods offered to consumers for
affirmatively consenting to the service. For example, an
institution need not provide the tear-off portion of Model Form A-9
if it is only permitting consumers to opt-in telephonically or
electronically. Institutions may, but are not required, to provide
a signature line or check box where the consumer can indicate that
he or she declines to opt in.
4. Identification of consumer's account. An institution
may use any reasonable method to identify the account for which the
consumer submits the opt-in notice. For example, the institution
may include a line for a printed name and an account number, as
shown in Model Form A-9. Or, the institution may print a bar code
or use other tracking information. See also comment 17(b)-6,
which describes how an institution obtains a consumer's affirmative
consent.
5. Alternative plans for covering overdrafts. If the
institution offers both a line of credit subject to the Board's
Regulation Z (12 CFR part 226) and a service that transfers funds
from another account of the consumer held at the institution to
cover overdrafts, the institution must state in its opt-in notice
that both alternative plans are offered. For example, the notice
might state “We also offer overdraft protection plans, such
as a link to a savings account or to an overdraft line of credit,
which may be less expensive than our standard overdraft practices.”
If the institution offers one, but not the other, it must state in
its opt-in notice the alternative plan that it offers. If the
institution does not offer either plan, it should omit the
reference to the alternative plans.
17(f) Continuing Right To Opt-In or To Revoke the Opt-In
1. Fees or charges for overdrafts incurred prior to
revocation. Section 205.17(f)(1) provides that a consumer may
revoke his or her prior consent at any time. If a consumer does so,
this provision does not require the financial institution to waive
or reverse any overdraft fees assessed on the consumer's account
prior to the institution's implementation of the consumer's
revocation request.
17(g) Duration of Opt-In.
1. Termination of overdraft service. A financial
institution may, for example, terminate the overdraft service when
the consumer makes excessive use of the service.
§ 205.18 Requirements for Financial Institutions Offering Payroll
Card Accounts. 18(a) Coverage
1. Issuance of access device. Consistent with § 205.5(a),
a financial institution may issue an access device only in response
to an oral or written request for the device, or as a renewal or
substitute for an accepted access device. A consumer is deemed to
request an access device for a payroll card account when the
consumer chooses to receive salary or other compensation through a
payroll card account.
2. Application to employers and service providers.
Typically, employers and third-party service providers do not meet
the definition of a “financial institution” subject to the
regulation because they neither hold payroll card accounts nor
issue payroll cards and agree with consumers to provide EFT
services in connection with payroll card accounts. However, to the
extent an employer or a service provider undertakes either of these
functions, it would be deemed a financial institution under the
regulation.
18(b) Alternative to Periodic Statements
1. Posted transactions. A history of transactions
provided under §§ 205.18(b)(1)(ii) and (iii) shall reflect
transfers once they have been posted to the account. Thus, an
institution does not need to include transactions that have been
authorized, but that have not yet posted to the account.
2. Electronic history. The electronic history required
under § 205.18(b)(1)(ii) must be provided in a form that the
consumer may keep, as required under § 205.4(a)(1). Financial
institutions may satisfy this requirement if they make the
electronic history available in a format that is capable of being
retained. For example, an institution satisfies the requirement if
it provides a history at an Internet Web site in a format that is
capable of being printed or stored electronically using an Internet
web browser.
18(c) Modified Requirements
1. Error resolution safe harbor provision. Institutions
that choose to investigate notices of error provided up to 120 days
from the date a transaction has posted to a consumer's account may
still disclose the error resolution time period required by the
regulation (as set forth in the Model Form in Appendix A-7).
Specifically, an institution may disclose to payroll card account
holders that the institution will investigate any notice of error
provided within 60 days of the consumer electronically accessing an
account or receiving a written history upon request that reflects
the error, even if, for some or all transactions, the institution
investigates any notice of error provided up to 120 days from the
date that the transaction alleged to be in error has posted to the
consumer's account. Similarly, an institution's summary of the
consumer's liability (as required under § 205.7(b)(1)) may disclose
that liability is based on the consumer providing notice of error
within 60 days of the consumer electronically accessing an account
or receiving a written history reflecting the error, even if, for
some or all transactions, the institution allows a consumer to
assert a notice of error up to 120 days from the date of posting of
the alleged error.
2. Electronic access. A consumer is deemed to have
accessed a payroll card account electronically when the consumer
enters a user identification code or password or otherwise complies
with a security procedure used by an institution to verify the
consumer's identity. An institution is not required to determine
whether a consumer has in fact accessed information about specific
transactions to trigger the beginning of the 60-day periods for
liability limits and error resolution under §§ 205.6 and
205.11.
3. Untimely notice of error. An institution that provides
a transaction history under § 205.18(b)(1) is not required to
comply with the requirements of § 205.11 for any notice of error
from the consumer pertaining to a transfer that occurred more than
60 days prior to the earlier of the date the consumer
electronically accesses the account or the date the financial
institution sends a written history upon the consumer's request.
(Alternatively, as provided in § 205.18(c)(4)(ii), an institution
need not comply with the requirements of § 205.11 with respect to
any notice of error received from the consumer more than 120 days
after the date of posting of the transfer allegedly in error.)
Where the consumer's assertion of error involves an unauthorized
EFT, however, the institution must comply with § 205.6 before it
may impose any liability on the consumer.
Section 205.20 - Requirements for Gift Cards and Gift Certificates
20(a) Definitions
1. Form of card, code, or device. Section 205.20 applies
to any card, code, or other device that meets one of the
definitions in § 205.20(a)(1) through (a)(3) (and is not otherwise
excluded by § 205.20(b)), even if it is not issued in card form.
Section 205.20 applies, for example, to an account number or bar
code that can be used to access underlying funds. Similarly, §
205.20 applies to a device with a chip or other embedded mechanism
that links the device to stored funds, such as a mobile phone or
sticker containing a contactless chip that enables the consumer to
access the stored funds. A card, code, or other device that meets
the definition in § 205.20(a)(1) through (a)(3) includes an
electronic promise (see comment 20(a)-2) as well as a
promise that is not electronic. See, however, §
205.20(b)(5). In addition, § 205.20 applies if a merchant issues a
code that entitles a consumer to redeem the code for goods or
services, regardless of the medium in which the code is issued
(see, however, § 205.20(b)(5)), and whether or not it may be
redeemed electronically or in the merchant's store. Thus, for
example, if a merchant e-mails a code that a consumer may redeem in
a specified amount either on-line or in the merchant's store, that
code is covered under § 205.20, unless one of the exclusions in §
205.20(b) apply.
2. Electronic promise. The term “electronic promise” as
used in EFTA Sections 915(a)(2)(B), (a)(2)(C), and (a)(2)(D) means
a person's commitment or obligation communicated or stored in
electronic form made to a consumer to provide payment for goods or
services for transactions initiated by the consumer. The electronic
promise is itself represented by a card, code or other device that
is issued or honored by the person, reflecting the person's
commitment or obligation to pay. For example, if a merchant issues
a code that can be given as a gift and that entitles the recipient
to redeem the code in an on-line transaction for goods or services,
that code represents an electronic promise by the merchant and is a
card, code, or other device covered by § 205.20.
3. Cards, codes, or other devices redeemable for specific
goods or services. Certain cards, codes, or other devices may
be redeemable upon presentation for a specific good or service, or
“experience,” such as a spa treatment, hotel stay, or airline
flight. In other cases, a card, code, or other device may entitle
the consumer to a certain percentage off the purchase of a good or
service, such as 20% off of any purchase in a store. Such cards,
codes, or other devices generally are not subject to the
requirements of this section because they are not issued to a
consumer “in a specified amount” as required under the definitions
of “gift certificate,” “store gift card,” or “general-use prepaid
card.” However, if the card, code, or other device is issued in a
specified or denominated amount that can be applied toward the
purchase of a specific good or service, such as a certificate or
card redeemable for a spa treatment up to $50, the card, code, or
other device is subject to this section, unless one of the
exceptions in § 205.20(b) apply. See, e.g., § 205.20(b)(3).
Similarly, if the card, code, or other device states a specific
monetary value, such as “a $50 value,” the card, code, or other
device is subject to this section, unless an exclusion in §
205.20(b) applies.
4. Issued primarily for personal, family, or household
purposes. Section 205.20 only applies to cards, codes, or other
devices that are sold or issued to a consumer primarily for
personal, family, or household purposes. A card, code, or other
device initially purchased by a business is subject to this section
if the card, code, or other device is purchased for redistribution
or resale to consumers primarily for personal, family, or household
purposes. Moreover, the fact that a card, code, or other device may
be primarily funded by a business, for example, in the case of
certain rewards or incentive cards, does not mean the card, code,
or other device is outside the scope of § 205.20, if the card,
code, or other device will be provided to a consumer primarily for
personal, family, or household purposes. But see §
205.20(b)(3). Whether a card, code, or other device is issued to a
consumer primarily for personal, family, or household purposes will
depend on the facts and circumstances. For example, if a program
manager purchases store gift cards directly from an issuing
merchant and sells those cards through the program manager's retail
outlets, such gift cards are subject to the requirements of §
205.20 because the store gift cards are sold to consumers primarily
for personal, family, or household purposes. In contrast, a card,
code, or other device generally would not be issued to consumers
primarily for personal, family, or household purposes, and
therefore would fall outside the scope of § 205.20, if the
purchaser of the card, code, or device is contractually prohibited
from reselling or redistributing the card, code, or device to
consumers primarily for personal, family, or household purposes,
and reasonable policies and procedures are maintained to avoid such
sale or distribution for such purposes. However, if an entity that
has purchased cards, codes, or other devices for business purposes
sells or distributes such cards, codes, or other devices to
consumers primarily for personal, family, or household purposes,
that entity does not comply with § 205.20 if it has not otherwise
met the substantive and disclosure requirements of the rule or
unless an exclusion in § 205.20(b) applies.
5. Examples of cards, codes, or other devices issued for
business purposes. Examples of cards, codes, or other devices
that are issued and used for business purposes and therefore
excluded from the definitions of “gift certificate,” “store gift
card,” or “general-use prepaid card” include
i. Cards, codes, or other devices to reimburse employees for
travel or moving expenses.
ii. Cards, codes, or other devices for employees to use to
purchase office supplies and other business-related items.
Paragraph 20(a)(2) - Store Gift Card
1. Relationship between “gift certificate” and “store gift
card”. The term “store gift card” in § 205.20(a)(2) includes
“gift certificate” as defined in § 205.20(a)(1). For example, a
numeric or alphanumeric code representing a specified dollar amount
or value that is electronically sent to a consumer as a gift which
can be redeemed or exchanged by the recipient to obtain goods or
services may be both a “gift certificate” and a “store gift card”
if the specified amount or value cannot be increased.
2. Affiliated group of merchants. The term “affiliated
group of merchants” means two or more affiliated merchants or other
persons that are related by common ownership or common corporate
control (see, e.g., 12 CFR 227.3(b) and 12 CFR 223.2) and
that share the same name, mark, or logo. For example, the term
includes franchisees that are subject to a common set of corporate
policies or practices under the terms of their franchise licenses.
The term also applies to two or more merchants or other persons
that agree among themselves, by contract or otherwise, to redeem
cards, codes, or other devices bearing the same name, mark, or logo
(other than the mark, logo, or brand of a payment network), for the
purchase of goods or services solely at such merchants or persons.
For example, assume a movie theatre chain and a restaurant chain
jointly agree to issue cards that share the same “Flix and Food”
logo that can be redeemed solely towards the purchase of movie
tickets or concessions at any of the participating movie theatres,
or towards the purchase of food or beverages at any of the
participating restaurants. For purposes of § 205.20, the movie
theatre chain and the restaurant chain would be considered to be an
affiliated group of merchants, and the cards are considered to be
“store gift cards.” However, merchants or other persons are not
considered to be affiliated merely because they agree to accept a
card that bears the mark, logo, or brand of a payment network.
3. Mall gift cards. See comment 20(a)(3)-2.
Paragraph 20(a)(3) - General-Use Prepaid Card
1. Redeemable upon presentation at multiple, unaffiliated
merchants. A card, code, or other device is redeemable upon
presentation at multiple, unaffiliated merchants if, for example,
such merchants agree to honor the card, code, or device if it bears
the mark, logo, or brand of a payment network, pursuant to the
rules of the payment network.
2. Mall gift cards. Mall gift cards that are intended to
be used or redeemed for goods or services at participating
retailers within a shopping mall may be considered store gift cards
or general-use prepaid cards depending on the merchants with which
the cards may be redeemed. For example, if a mall card may only be
redeemed at merchants within the mall itself, the card is more
likely to be redeemable at an affiliated group of merchants and
considered a store gift card. However, certain mall cards also
carry the brand of a payment network and can be used at any
retailer that accepts that card brand, including retailers located
outside of the mall. Such cards are considered general-use prepaid
cards.
Paragraph 20(a)(4) - Loyalty, Award, or Promotional Gift Card
1. Examples of loyalty, award, or promotional programs.
Examples of loyalty, award or promotional programs under §
205.20(a)(4) include, but are not limited to
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. To
indicate that a card, code, or other device is issued for loyalty,
award, or promotional purposes as required by § 205.20(a)(4)(iii),
it is sufficient for the card, code, or other device to state on
the front, for example, “Reward” or “Promotional.”
3. Reference to toll-free number and Web site. If a card,
code, or other device issued in connection with a loyalty, award,
or promotional program does not have any fees, the disclosure under
§ 205.20(a)(4)(iii)(D) is not required on the card, code, or other
device.
Paragraph 20(a)(6) - Service Fee
1. Service fees. Under § 205.20(a)(6), a service fee
includes a periodic fee for holding or use of a gift certificate,
store gift card, or general-use prepaid card. A periodic fee
includes any fee that may be imposed on a gift certificate, store
gift card, or general-use prepaid card from time to time for
holding or using the certificate or card, such as a monthly
maintenance fee, a transaction fee, an ATM fee, a reload fee, a
foreign currency transaction fee, or a balance inquiry fee, whether
or not the fee is waived for a certain period of time or is only
imposed after a certain period of time. A service fee does not
include a one-time fee or a fee that is unlikely to be imposed more
than once while the underlying funds are still valid, such as an
initial issuance fee, a cash-out fee, a supplemental card fee, or a
lost or stolen certificate or card replacement fee.
Paragraph 20(a)(7) - Activity
1. Activity. Under § 205.20(a)(7), any action that
results in an increase or decrease of the funds underlying a gift
certificate, store gift card, or general-use prepaid card, other
than the imposition of a fee, or an adjustment due to an error or a
reversal of a prior transaction, constitutes activity for purposes
of § 205.20. For example, the purchase and activation of a
certificate or card, the use of the certificate or card to purchase
a good or service, or the reloading of funds onto a store gift card
or general-use prepaid card constitutes activity. However, the
imposition of a fee, the replacement of an expired, lost, or stolen
certificate or card, and a balance inquiry do not constitute
activity. In addition, if a consumer attempts to engage in a
transaction with a gift certificate, store gift card, or
general-use prepaid card, but the transaction cannot be completed
due to technical or other reasons, such attempt does not constitute
activity. Furthermore, if the funds underlying a gift certificate,
store gift card, or general-use prepaid card are adjusted because
there was an error or the consumer has returned a previously
purchased good, the adjustment also does not constitute activity
with respect to the certificate or card.
20(b) Exclusions
1. Application of exclusion. A card, code, or other
device is excluded from the definition of “gift certificate,”
“store gift card,” or “general-use prepaid card” if it meets any of
the exclusions in § 205.20(b). An excluded card, code, or other
device generally is not subject to any of the requirements of this
section. (See, however, § 205.20(a)(4)(iii), requiring
certain disclosures for loyalty, award, or promotional gift
cards.)
2. Eligibility for multiple exclusions. A card, code, or
other device may qualify for one or more exclusions. For example, a
corporation may give its employees a gift card that is marketed
solely to businesses for incentive-related purposes, such as to
reward job performance or promote employee safety. In this case,
the card may qualify for the exclusion for loyalty, award, or
promotional gift cards under § 205.20(b)(3), or for the exclusion
for cards, codes, or other devices not marketed to the general
public under § 205.20(b)(4). In addition, as long as any one of the
exclusions applies, a card, code, or other device is not covered by
§ 205.20, even if other exclusions do not apply. In the above
example, the corporation may give its employees a type of gift card
that can also be purchased by a consumer directly from a merchant.
Under these circumstances, while the card does not qualify for the
exclusion for cards, codes, or other devices not marketed to the
general public under § 205.20(b)(4) because the card can also be
obtained through retail channels, it is nevertheless exempt from
the substantive requirements of § 205.20 because it is a loyalty,
award, or promotional gift card. (See, however, §
205.20(a)(4)(iii), requiring certain disclosures for loyalty,
award, or promotional gift cards.) Similarly, a person may market a
reloadable card to teenagers for occasional expenses that enables
parents to monitor spending. Although the card does not qualify for
the exclusion for cards, codes, or other devices not marketed to
the general public under § 205.20(b)(4), it may nevertheless be
exempt from the requirements of § 205.20 under § 205.20(b)(2) if it
is reloadable and not marketed or labeled as a gift card or gift
certificate.
Paragraph 20(b)(1) - Usable Solely for Telephone Services
1. Examples of excluded products. The exclusion for
products usable solely for telephone services applies to prepaid
cards for long-distance telephone service, prepaid cards for
wireless telephone service and prepaid cards for other services
that function similar to telephone services, such as prepaid cards
for voice over internet protocol (VoIP) access time.
Paragraph 20(b)(2) - Reloadable and Not Marketed or Labeled as a
Gift Card or Gift Certificate
1. Reloadable. A card, code, or other device is
“reloadable” if the terms and conditions of the agreement permit
funds to be added to the card, code, or other device after the
initial purchase or issuance. A card, code, or other device is not
“reloadable” merely because the issuer or processor is technically
able to add functionality that would otherwise enable the card,
code, or other device to be reloaded.
2. Marketed or labeled as a gift card or gift
certificate. The term “marketed or labeled as a gift card or
gift certificate” means directly or indirectly offering,
advertising or otherwise suggesting the potential use of a card,
code or other device, as a gift for another person. Whether the
exclusion applies generally does not depend on the type of entity
that makes the promotional message. For example, a card may be
marketed or labeled as a gift card or gift certificate if anyone
(other than the purchaser of the card), including the issuer, the
retailer, the program manager that may distribute the card, or the
payment network on which a card is used, promotes the use of the
card as a gift card or gift certificate. A card, code, or other
device, including a general-purpose reloadable card, is marketed or
labeled as a gift card or gift certificate even if it is only
occasionally marketed as a gift card or gift certificate. For
example, a network-branded general purpose reloadable card would be
marketed or labeled as a gift card or gift certificate if the
issuer principally advertises the card as a less costly alternative
to a bank account but promotes the card in a television, radio,
newspaper, or Internet advertisement, or on signage as “the perfect
gift” during the holiday season. However, the mere mention of the
availability of gift cards or gift certificates in an advertisement
or on a sign that also indicates the availability of other excluded
prepaid cards does not by itself cause the excluded prepaid cards
to be marketed as a gift card or a gift certificate. For example,
the posting of a sign in a store that refers to the availability of
gift cards does not by itself constitute the marketing of otherwise
excluded prepaid cards that may also be sold in the store as gift
cards or gift certificates, provided that a consumer acting
reasonably under the circumstances would not be led to believe that
the sign applies to all prepaid cards sold in the store. (See,
however, comment 20(b)(2)-4.ii.)
3. Examples of marketed or labeled as a gift card or gift
certificate.
i. Examples of marketed or labeled as a gift card or gift
certificate include
A. Using the word “gift” or “present” on a card, certificate, or
accompanying material, including documentation, packaging and
promotional displays;
B. Representing or suggesting that a certificate or card can be
given to another person, for example, as a “token of appreciation”
or a “stocking stuffer,” or displaying a congratulatory message on
the card, certificate or accompanying material;
C. Incorporating gift-giving or celebratory imagery or motifs,
such as a bow, ribbon, wrapped present, candle, or congratulatory
message, on a card, certificate, accompanying documentation, or
promotional material;
ii. The term does not include
A. Representing that a card or certificate can be used as a
substitute for a checking, savings, or deposit account;
B. Representing that a card or certificate can be used to pay
for a consumer's health-related expenses - for example, a card tied
to a health savings account;
C. Representing that a card or certificate can be used as a
substitute for travelers checks or cash;
D. Representing that a card or certificate can be used as a
budgetary tool, for example, by teenagers, or to cover emergency
expenses.
4. Reasonable policies and procedures to avoid marketing as a
gift card. The exclusion for a card, code, or other device that
is reloadable and not marketed or labeled as a gift card or gift
certificate in § 205.20(b)(2) applies if a reloadable card, code,
or other device is not marketed or labeled as a gift card or gift
certificate and if persons subject to the rule, including issuers,
program managers, and retailers, maintain policies and procedures
reasonably designed to avoid such marketing. Such policies and
procedures may include contractual provisions prohibiting a
reloadable card, code, or other device from being marketed or
labeled as a gift card or gift certificate, merchandising
guidelines or plans regarding how the product must be displayed in
a retail outlet, and controls to regularly monitor or otherwise
verify that the card, code or other device is not being marketed as
a gift card. Whether a reloadable card, code, or other device has
been marketed as a gift card or gift certificate will depend on the
facts and circumstances, including whether a reasonable consumer
would be led to believe that the card, code, or other device is a
gift card or gift certificate. The following examples illustrate
the application of § 205.20(b)(2)
i. An issuer or program manager of prepaid cards agrees to sell
general-purpose reloadable cards through a retailer. The contract
between the issuer or program manager and the retailer establishes
the terms and conditions under which the cards may be sold and
marketed at the retailer. The terms and conditions prohibit the
general-purpose reloadable cards from being marketed as a gift card
or gift certificate, and require policies and procedures to
regularly monitor or otherwise verify that the cards are not being
marketed as such. The issuer or program manager sets up one
promotional display at the retailer for gift cards and another
physically separated display for excluded products under §
205.20(b), including general-purpose reloadable cards and wireless
telephone cards, such that a reasonable consumer would not believe
that the excluded cards are gift cards. The exclusion in §
205.20(b)(2) applies because policies and procedures reasonably
designed to avoid the marketing of the general-purpose reloadable
cards as gift cards or gift certificates are maintained, even if a
retail clerk inadvertently stocks or a consumer inadvertently
places a general-purpose reloadable card on the gift card
display.
ii. Same facts as in i., except that the issuer or program
manager sets up a single promotional display at the retailer on
which a variety of prepaid cards are sold, including store gift
cards and general-purpose reloadable cards. A sign stating “Gift
Cards” appears prominently at the top of the display. The exclusion
in § 205.20(b)(2) does not apply with respect to the
general-purpose reloadable cards because policies and procedures
reasonably designed to avoid the marketing of excluded cards as
gift cards or gift certificates are not maintained.
iii. Same facts as in i., except that the issuer or program
manager sets up a single promotional multi-sided display at the
retailer on which a variety of prepaid card products, including
store gift cards and general-purpose reloadable cards are sold.
Gift cards are segregated from excluded cards, with gift cards on
one side of the display and excluded cards on a different side of a
display. Signs of equal prominence at the top of each side of the
display clearly differentiate between gift cards and the other
types of prepaid cards that are available for sale. The retailer
does not use any more conspicuous signage suggesting the general
availability of gift cards, such as a large sign stating “Gift
Cards” at the top of the display or located near the display. The
exclusion in § 205.20(b)(2) applies because policies and procedures
reasonably designed to avoid the marketing of the general-purpose
reloadable cards as gift cards or gift certificates are maintained,
even if a retail clerk inadvertently stocks or a consumer
inadvertently places a general-purpose reloadable card on the gift
card display.
iv. Same facts as in i., except that the retailer sells a
variety of prepaid card products, including store gift cards and
general-purpose reloadable cards, arranged side-by-side in the same
checkout lane. The retailer does not affirmatively indicate or
represent that gift cards are available, such as by displaying any
signage or other indicia at the checkout lane suggesting the
general availability of gift cards. The exclusion in § 205.20(b)(2)
applies because policies and procedures reasonably designed to
avoid marketing the general-purpose reloadable cards as gift cards
or gift certificates are maintained.
5. On-line sales of prepaid cards. Some Web sites may
prominently advertise or promote the availability of gift cards or
gift certificates in a manner that suggests to a consumer that the
Web site exclusively sells gift cards or gift certificates. For
example, a Web site may display a banner advertisement or a graphic
on the home page that prominently states “Gift Cards,” “Gift
Giving,” or similar language without mention of other available
products, or use a Web address that includes only a reference to
gift cards or gift certificates in the address. In such a case, a
consumer acting reasonably under the circumstances could be led to
believe that all prepaid products sold on the Web site are gift
cards or gift certificates. Under these facts, the Web site has
marketed all such products, including general-purpose reloadable
cards, as gift cards or gift certificates, and the exclusion in §
205.20(b)(2) does not apply.
6. Temporary non-reloadable cards issued in connection with a
general-purpose reloadable card. Certain general-purpose
reloadable cards that are typically marketed as an account
substitute initially may be sold or issued in the form of a
temporary non-reloadable card. After the card is purchased, the
cardholder is typically required to call the issuer to register the
card and to provide identifying information in order to obtain a
reloadable replacement card. In most cases, the temporary
non-reloadable card can be used for purchases until the replacement
reloadable card arrives and is activated by the cardholder. Because
the temporary non-reloadable card may only be obtained in
connection with the general-purpose reloadable card, the exclusion
in § 205.20(b)(2) applies so long as the card is not marketed as a
gift card or gift certificate.
Paragraph 20(b)(4) - Not Marketed to the General Public
1. Marketed to the general public. A card, code, or other
device is marketed to the general public if the potential use of
the card, code, or other device is directly or indirectly offered,
advertised, or otherwise promoted to the general public. A card,
code, or other device may be marketed to the general public through
any advertising medium, including television, radio, newspaper, the
Internet, or signage. However, the posting of a company policy that
funds may be disbursed by prepaid card (such as a sign posted at a
cash register or customer service center stating that store credit
will be issued by prepaid card) does not constitute the marketing
of a card, code, or other device to the general public. In
addition, the method of distribution by itself is not dispositive
in determining whether a card, code, or other device is marketed to
the general public. Factors that may be considered in determining
whether the exclusion applies to a particular card, code, or other
device include the means or channel through which the card, code,
or device may be obtained by a consumer, the subset of consumers
that are eligible to obtain the card, code, or device, and whether
the availability of the card, code, or device is advertised or
otherwise promoted in the marketplace.
2. Examples. The following examples illustrate the
application of the exclusion in § 205.20(b)(4)
i. A merchant sells its gift cards at a discount to a business
which may give them to employees or loyal consumers as incentives
or rewards. In determining whether the gift card falls within the
exclusion in § 205.20(b)(4), the merchant must consider whether the
card is of a type that is advertised or made available to consumers
generally or can be obtained elsewhere. If the card can also be
purchased through retail channels, the exclusion in § 205.20(b)(4)
does not apply, even if the consumer obtained the card from the
business as an incentive or reward. See, however, §
205.20(b)(3).
ii. A national retail chain decides to market its gift cards
only to members of its frequent buyer program. Similarly, a bank
may decide to sell gift cards only to its customers. If a member of
the general public may become a member of the program or a customer
of the bank, the card does not fall within the exclusion in §
205.20(b)(4) because the general public has the ability to obtain
the cards. See, however, § 205.20(b)(3).
iii. A card issuer advertises a reloadable card to teenagers and
their parents promoting the card for use by teenagers for
occasional expenses, schoolbooks and emergencies and by parents to
monitor spending. Because the card is marketed to and may be sold
to any member of the general public, the exclusion in §
205.20(b)(4) does not apply. See, however, §
205.20(b)(2).
iv. An insurance company settles a policyholder's claim and
distributes the insurance proceeds to the consumer by means of a
prepaid card. Because the prepaid card is simply the means for
providing the insurance proceeds to the consumer and the
availability of the card is not advertised to the general public,
the exclusion in § 205.20(b)(4) applies.
v. A merchant provides store credit to a consumer following a
merchandise return by issuing a prepaid card that clearly indicates
that the card contains funds for store credit. Because the prepaid
card is issued for the stated purpose of providing store credit to
the consumer and the ability to receive refunds by a prepaid card
is not advertised to the general public, the exclusion in §
205.20(b)(4) applies.
vi. A tax preparation company elects to distribute tax refunds
to its clients by issuing prepaid cards, but does not advertise or
otherwise promote the ability to receive proceeds in this manner.
Because the prepaid card is simply the mechanism for providing the
tax refund to the consumer, and the tax preparer does not advertise
the ability to obtain tax refunds by a prepaid card, the exclusion
in § 205.20(b)(4) applies. However, if the tax preparer promotes
the ability to receive tax refund proceeds through a prepaid card
as a way to obtain “faster” access to the proceeds, the exclusion
in § 205.20(b)(4) does not apply.
Paragraph 20(b)(5) - Issued in Paper Form Only
1. Exclusion explained. To qualify for the exclusion in §
205.20(b)(5), the sole means of issuing the card, code, or other
device must be in a paper form. Thus, the exclusion generally
applies to certificates issued in paper form where solely the paper
itself may be used to purchase goods or services. A card, code or
other device is not issued solely in paper form simply because it
may be reproduced or printed on paper. For example, a bar code,
card or certificate number, or certificate or coupon electronically
provided to a consumer and redeemable for goods and services is not
issued in paper form, even if it may be reproduced or otherwise
printed on paper by the consumer. In this circumstance, although
the consumer might hold a paper facsimile of the card, code, or
other device, the exclusion does not apply because the information
necessary to redeem the value was initially issued in electronic
form. A paper certificate is within the exclusion regardless of
whether it may be redeemed electronically. For example, a paper
certificate or receipt that bears a bar code, code, or account
number falls within the exclusion in § 205.20(b)(5) if the bar
code, code, or account number is not issued in any form other than
on the paper. In addition, the exclusion in § 205.20(b)(5)
continues to apply in circumstances where an issuer replaces a gift
certificate that was initially issued in paper form with a card or
electronic code (for example, to replace a lost paper
certificate).
2. Examples. The following examples illustrate the
application of the exclusion in § 205.20(b)(5)
i. A merchant issues a paper gift certificate that entitles the
bearer to a specified dollar amount that can be applied towards a
future meal. The merchant fills in the certificate with the name of
the certificate holder and the amount of the certificate. The
certificate falls within the exclusion in § 205.20(b)(5) because it
is issued in paper form only.
ii. A merchant allows a consumer to prepay for a good or
service, such as a car wash or time at a parking meter, and issues
a paper receipt bearing a numerical or bar code that the consumer
may redeem to obtain the good or service. The exclusion in §
205.20(b)(5) applies because the code is issued in paper form
only.
iii. A merchant issues a paper certificate or receipt bearing a
bar code or certificate number that can later be scanned or entered
into the merchant's system and redeemed by the certificate or
receipt holder towards the purchase of goods or services. The bar
code or certificate number is not issued by the merchant in any
form other than paper. The exclusion in § 205.20(b)(5) applies
because the bar code or certificate number is issued in paper form
only.
iv. An on-line merchant electronically provides a bar code, card
or certificate number, or certificate or coupon to a consumer that
the consumer may print on a home printer and later redeem towards
the purchase of goods or services. The exclusion in § 205.20(b)(5)
does not apply because the bar code or card or certificate number
was issued to the consumer in electronic form, even though it can
be reproduced or otherwise printed on paper by the consumer.
Paragraph 20(b)(6) - Redeemable Solely for Admission to Events or
Venues
1. Exclusion explained. The exclusion for cards, codes,
or other devices that are redeemable solely for admission to events
or venues at a particular location or group of affiliated locations
generally applies to cards, codes, or other devices that are not
redeemed for a specified monetary value, but rather solely for
admission or entry to an event or venue. The exclusion also covers
a card, code, or other device that is usable to purchase goods or
services in addition to entry into the event or the venue, either
at the event or venue or at an affiliated location or location in
geographic proximity to the event or venue.
2. Examples. The following examples illustrate the
application of the exclusion in § 205.20(b)(6)
i. A consumer purchases a prepaid card that entitles the holder
to a ticket for entry to an amusement park. The prepaid card may
only be used for entry to the park. The card qualifies for the
exclusion in § 205.20(b)(6) because it is redeemable for admission
or entry and for goods or services in conjunction with that
admission. In addition, if the prepaid card does not have a
monetary value, and therefore is not “issued in a specified
amount,” the card does not meet the definitions of “gift
certificate,” “store gift card,” or “general-use prepaid card” in §
205.20(a). See comment 20(a)-3.
ii. Same facts as in i., except that the gift card also entitles
the holder of the gift card to a dollar amount that can be applied
towards the purchase of food and beverages or goods or services at
the park or at nearby affiliated locations. The card qualifies for
the exclusion in § 205.20(b)(6) because it is redeemable for
admission or entry and for goods or services in conjunction with
that admission.
iii. A consumer purchases a $25 gift card that the holder of the
gift card can use to make purchases at a merchant, or,
alternatively, can apply towards the cost of admission to the
merchant's affiliated amusement park. The card is not eligible for
the exclusion in § 205.20(b)(6) because it is not redeemable solely
for the admission or ticket itself (or for goods and services
purchased in conjunction with such admission). The card meets the
definition of “store gift card” and is therefore subject to §
205.20, unless a different exclusion applies.
20(c) Form of Disclosures Paragraph 20(c)(1) - Clear and
Conspicuous
1. Clear and conspicuous standard. All disclosures
required by this section must be clear and conspicuous. Disclosures
are clear and conspicuous for purposes of this section if they are
readily understandable and, in the case of written and electronic
disclosures, the location and type size are readily noticeable to
consumers. Disclosures need not be located on the front of the
certificate or card, except where otherwise required, to be
considered clear and conspicuous. Disclosures are clear and
conspicuous for the purposes of this section if they are in a print
that contrasts with and is otherwise not obstructed by the
background on which they are printed. For example, disclosures on a
card or computer screen are not likely to be conspicuous if
obscured by a logo printed in the background. Similarly,
disclosures on the back of a card that are printed on top of
indentations from embossed type on the front of the card are not
likely to be conspicuous if the indentations obstruct the
readability of the disclosures. To the extent permitted, oral
disclosures meet the standard when they are given at a volume and
speed sufficient for a consumer to hear and comprehend them.
2. Abbreviations and symbols. Disclosures may contain
commonly accepted or readily understandable abbreviations or
symbols, such as “mo.” for month or a “/” to indicate “per.” Under
the clear and conspicuous standard, it is sufficient to state, for
example, that a particular fee is charged “$2.50/mo. after 12
mos.”
Paragraph 20(c)(2) - Format
1. Electronic disclosures. Disclosures provided
electronically pursuant to this section are not subject to
compliance with the consumer consent and other applicable
provisions of the Electronic Signatures in Global and National
Commerce Act (E-Sign Act) (15 U.S.C. 7001 et seq.).
Electronic disclosures must be in a retainable form. For example, a
person may satisfy the requirement if it provides an online
disclosure in a format that is capable of being printed. Electronic
disclosures may not be provided through a hyperlink or in another
manner by which the purchaser can bypass the disclosure. A person
is not required to confirm that the consumer has read the
electronic disclosures.
Paragraph 20(c)(3) - Disclosure Prior to Purchase
1. Method of purchase. The disclosures required by this
paragraph must be provided before a certificate or card is
purchased regardless of whether the certificate or card is
purchased in person, online, by telephone, or by other means.
2. Electronic disclosures. Section 205.20(c)(3) provides
that the disclosures required by this section must be provided to
the consumer prior to purchase. For certificates or cards purchased
electronically, disclosures made to the consumer after a consumer
has initiated an online purchase of a certificate or card, but
prior to completing the purchase of the certificate or card, would
satisfy the prior-to-purchase requirement. However, electronic
disclosures made available on a person's Web site that may or may
not be accessed by the consumer are not provided to the consumer
and therefore would not satisfy the prior-to-purchase
requirement.
3. Non-physical certificates and cards. If no physical
certificate or card is issued, the disclosures must be provided to
the consumer before the certificate or card is purchased. For
example, where a gift certificate or card is a code that is
provided by telephone, the required disclosures may be provided
orally prior to purchase. See also § 205.20(c)(2).
Paragraph 20(c)(4) - Disclosures on the Certificate or Card
1. Non-physical certificates and cards. If no physical
certificate or card is issued, the disclosures required by this
paragraph must be disclosed on the code, confirmation, or other
written or electronic document provided to the consumer. For
example, where a gift certificate or card is a code or confirmation
that is provided to a consumer on-line or sent to a consumer's
e-mail address, the required disclosures may be provided
electronically on the same document as the code or
confirmation.
2. No disclosures on a certificate or card. Disclosures
required by § 205.20(c)(4) need not be made on a certificate or
card if it is accompanied by a certificate or card that complies
with this section. For example, a person may issue or sell a
supplemental gift card that is smaller than a standard size and
that does not bear the applicable disclosures if it is accompanied
by a fully compliant certificate or card. See also comment
20(c)(2)-2.
20(d) Prohibition on Imposition of Fees or Charges
1. One-year period. Section 205.20(d) provides that a
person may impose a dormancy, inactivity, or service fee only if
there has been no activity with respect to a certificate or card
for one year. The following examples illustrate this rule
i. A certificate or card is purchased on January 15 of year one.
If there has been no activity on the certificate or card since the
certificate or card was purchased, a dormancy, inactivity, or
service fee may be imposed on the certificate or card on January 15
of year two.
ii. Same facts as i., and a fee was imposed on January 15 of
year two. Because no more than one dormancy, inactivity, or service
fee may be imposed in any given calendar month, the earliest date
that another dormancy, inactivity, or service fee may be imposed,
assuming there continues to be no activity on the certificate or
card, is February 1 of year two. A dormancy, inactivity, or service
fee is permitted to be imposed on February 1 of year two because
there has been no activity on the certificate or card for the
preceding year (February 1 of year one through January 31 of year
two), and February is a new calendar month. The imposition of a fee
on January 15 of year two is not activity for purposes of §
205.20(d). See comment 20(a)(7)-1.
iii. Same facts as i., and a fee was imposed on January 15 of
year two. On January 31 of year two, the consumer uses the card to
make a purchase. Another dormancy, inactivity, or service fee could
not be imposed until January 31 of year three, assuming there has
been no activity on the certificate or card since January 31 of
year two.
2. Relationship between §§ 205.20(d)(2) and (c)(3).
Sections 205.20(d)(2) and (c)(3) contain similar, but not
identical, disclosure requirements. Section 205.20(d)(2) requires
the disclosure of dormancy, inactivity, and service fees on a
certificate or card. Section 205.20(c)(3) requires that vendor
person that issues or sells such certificate or card disclose to a
consumer any dormancy, inactivity, and service fees associated with
the certificate or card before such certificate or card may be
purchased. Depending on the context, a single disclosure that meets
the clear and conspicuous requirements of both §§ 205.20(d)(2) and
(c)(3) may be used to disclose a dormancy, inactivity, or service
fee. For example, if the disclosures on a certificate or card,
required by § 205.20(d)(2), are visible to the consumer without
having to remove packaging or other materials sold with the
certificate or card, for a purchase made in person, the disclosures
also meet the requirements of § 205.20(c)(3). Otherwise, a
dormancy, inactivity, or service fee may need to be disclosed
multiple times to satisfy the requirements of §§ 205.20(d)(2) and
(c)(3). For example, if the disclosures on a certificate or card,
required by § 205.20(d)(2), are obstructed by packaging sold with
the certificate or card, for a purchase made in person, they also
must be disclosed on the packaging sold with the certificate or
card to meet the requirements of § 205.20(c)(3).
3. Relationship between §§ 205.20(d)(2), (e)(3), and
(f)(2). In addition to any disclosures required under §
205.20(d)(2), any applicable disclosures under §§ 205.20(e)(3) and
(f)(2) of this section must also be provided on the certificate or
card.
4. One fee per month. Under § 205.20(d)(3), no more than
one dormancy, inactivity, or service fee may be imposed in any
given calendar month. For example, if a dormancy fee is imposed on
January 1, following a year of inactivity, and a consumer makes a
balance inquiry on January 15, a balance inquiry fee may not be
imposed at that time because a dormancy fee was already imposed
earlier that month and a balance inquiry fee is a type of service
fee. If, however, the dormancy fee could be imposed on January 1,
following a year of inactivity, and the consumer makes a balance
inquiry on the same date, the person assessing the fees may choose
whether to impose the dormancy fee or the balance inquiry fee on
January 1. The restriction in § 205.20(d)(3) does not apply to any
fee that is not a dormancy, inactivity, or service fee. For
example, assume a service fee is imposed on a general-use prepaid
card on January 1, following a year of inactivity. If a consumer
cashes out the remaining funds by check on January 15, a cash-out
fee, to the extent such cash-out fee is permitted under §
205.20(e)(4), may be imposed at that time because a cash-out fee is
not a dormancy, inactivity, or service fee.
5. Accumulation of fees. Section 205.20(d) prohibits the
accumulation of dormancy, inactivity, or service fees for previous
periods into a single fee because such a practice would circumvent
the limitation in § 205.20(d)(3) that only one fee may be charged
per month. For example, if a consumer purchases and activates a
store gift card on January 1 but never uses the card, a monthly
maintenance fee of $2.00 a month may not be accumulated such that a
fee of $24 is imposed on January 1 the following year.
20(e) Prohibition on Sale of Gift Certificates or Cards With
Expiration Dates
1. Reasonable opportunity. Under § 205.20(e)(1), no
person may sell or issue a gift certificate, store gift card, or
general-use prepaid card with an expiration date, unless there are
policies and procedures in place 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. Consumers are deemed to have a reasonable opportunity to
purchase a certificate or card with at least five years remaining
until the certificate or card expiration date if
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.
Section 205.20(e)(1) applies solely to the purchase of a
certificate or card. Therefore, § 205.20(e)(1) does not apply to
the replacement of such certificates or cards. Certificates or
cards issued as a replacement may bear a certificate or card
expiration date of less than five years from the date of issuance
of the replacement certificate or card. If the certificate or card
expiration date for a replacement certificate or card is later than
the date set forth in § 205.20(e)(2)(i), then pursuant to §
205.20(e)(2), the expiration date for the underlying funds at the
time the replacement certificate or card is issued must be no
earlier than the expiration date for the replacement certificate or
card. For purposes of § 205.20(e)(2), funds are not considered to
be loaded to a store gift card or general-use prepaid card solely
because a replacement card has been issued or activated for
use.
3. Disclosure of funds expiration - date not required.
Section 205.20(e)(3)(i) does not require disclosure of the precise
date the funds will expire. It is sufficient to disclose, for
example, “Funds expire 5 years from the date funds last loaded to
the card.”; “Funds can be used 5 years from the date money was last
added to the card.”; or “Funds do not expire.”
4. Disclosure not required if no expiration date. If the
certificate or card and underlying funds do not expire, the
disclosure required by § 205.20(e)(3)(i) need not be stated on the
certificate or card. If the certificate or card and underlying
funds expire at the same time, only one expiration date need be
disclosed on the certificate or card.
5. Reference to toll-free telephone number and Web site.
If a certificate or card does not expire, or if the underlying
funds are not available after the certificate or card expires, the
disclosure required by § 205.20(e)(3)(ii) need not be stated on the
certificate or card. See, however, § 205.20(f)(2).
6. Relationship to § 226.20(f)(2). The same toll-free
telephone number and Web site may be used to comply with §§
226.20(e)(3)(ii) and (f)(2). Neither a toll-free number nor a Web
site must be maintained or disclosed if no fees are imposed in
connection with a certificate or card, and the certificate or card
and the underlying funds do not expire.
7. Distinguishing between certificate or card expiration and
funds expiration. If applicable, a disclosure must be made on
the certificate or card that notifies a consumer that the
certificate or card expires, but the funds either do not expire or
expire later than the certificate or card, and that the consumer
may contact the issuer for a replacement card. The disclosure must
be made with equal prominence and in close proximity to the
certificate or card expiration date. The close proximity
requirement does not apply to oral disclosures. In the case of a
certificate or card, close proximity means that the disclosure must
be on the same side as the certificate or card expiration date. For
example, if the disclosure is the same type size and is located
immediately next to or directly above or below the certificate or
card expiration date, without any intervening text or graphical
displays, the disclosures would be deemed to be equally prominent
and in close proximity. The disclosure need not be embossed on the
certificate or card to be deemed equally prominent, even if the
expiration date is embossed on the certificate or card. The
disclosure may state on the front of the card, for example, “Funds
expire after card. Call for replacement card.” or “Funds do not
expire. Call for new card after 09/2016.” Disclosures made pursuant
to § 205.20(e)(3)(iii)(A) may also fulfill the requirements of §
205.20(e)(3)(i). For example, making a disclosure that “Funds do
not expire” to comply with § 205.20(e)(3)(iii)(A) also fulfills the
requirements of § 205.20(e)(3)(i).
8. Expiration date safe harbor. A non-reloadable
certificate or card that bears an expiration date that is at least
seven years from the date of manufacture need not state the
disclosure required by § 205.20(e)(3)(iii). However, § 205.20(e)(1)
still prohibits the sale or issuance of such certificate or card
unless there are policies and procedures in place to provide a
consumer with a reasonable opportunity to purchase the certificate
or card with at least five years remaining until the certificate or
card expiration date. In addition, under § 205.20(e)(2), the funds
may not expire before the certificate or card expiration date, even
if the expiration date of the certificate or card bears an
expiration date that is more than five years at the date of
purchase. For purposes of this safe harbor, the date of manufacture
is the date on which the certificate or card expiration date is
printed on the certificate or card.
9. Relationship between §§ 205.20(d)(2), (e)(3), and
(f)(2). In addition to any disclosures required to be made
under § 205.20(e)(3), any applicable disclosures under §§
205.20(d)(2) and (f)(2) must also be provided on the certificate or
card.
10. Replacement or remaining balance of an expired
certificate or card. When a certificate or card expires, but
the underlying funds have not expired, an issuer, at its option in
accordance with applicable state law, may provide either a
replacement certificate or card or otherwise provide the
certificate or card holder, for example, by check, with the
remaining balance on the certificate or card. In either case, the
issuer may not charge a fee for the service.
11. Replacement of a lost or stolen certificate or card not
required. Section 205.20(e)(4) does not require the replacement
of a certificate or card that has been lost or stolen.
12. Date of issuance or loading. For purposes of §
205.20(e)(2)(i), a certificate or card is not issued or loaded with
funds until the certificate or card is activated for use.
13. Application of expiration date provisions after
redemption of certificate or card. The requirement that funds
underlying a certificate or card must not expire for at least five
years from the date of issuance or date of last load ceases to
apply once the certificate or card has been fully redeemed, even if
the underlying funds are not used to contemporaneously purchase a
specific good or service. For example, some certificates or cards
can be used to purchase music, media, or virtual goods. Once
redeemed by a consumer, the entire balance on the certificate or
card is debited from the certificate or card and credited or
transferred to another “account” established by the merchant of
such goods or services. The consumer can then make purchases of
songs, media, or virtual goods from the merchant using that
“account” either at the time the value is transferred from the
certificate or card or at a later time. Under these circumstances,
once the card has been fully redeemed and the “account” credited
with the amount of the underlying funds, the five-year minimum
expiration term no longer applies to the underlying funds. However,
if the consumer only partially redeems the value of the certificate
or card, the five-year minimum expiration term requirement
continues to apply to the funds remaining on the certificate or
card.
20(f) Additional Disclosure Requirements for Gift Certificates or
Cards
1. Reference to toll-free telephone number and Web site.
If a certificate or card does not have any fees, the disclosure
under § 205.20(f)(2) is not required on the certificate or card.
See, however, § 205.20(e)(3)(ii).
2. Relationship to § 226.20(e)(3)(ii). The same toll-free
telephone number and Web site may be used to comply with §§
226.20(e)(3)(ii) and (f)(2). Neither a toll-free number nor a Web
site must be maintained or disclosed if no fees are imposed in
connection with a certificate or card, and both the certificate or
card and underlying funds do not expire.
3. Relationship between §§ 205.20(d)(2), (e)(3), and
(f)(2). In addition to any disclosures required pursuant to §
205.20(f)(2), any applicable disclosures under §§ 205.20(d)(2) and
(e)(3) must also be provided on the certificate or card.
20(g) Compliance Dates
1. Period of eligibility for loyalty, award, or promotional
programs. For purposes of § 205.20(g)(2), the period of
eligibility is the time period during which a consumer must engage
in a certain action or actions to meet the terms of eligibility for
a loyalty, award, or promotional program and obtain the card, code,
or other device. Under § 205.20(g)(2), a gift card issued pursuant
to a loyalty, award, or promotional program that began prior to
August 22, 2010 need not state the disclosures in §
205.20(a)(4)(iii) regardless of whether the consumer became
eligible to receive the gift card prior to August 22, 2010, or
after that date. For example, a product manufacturer may provide a
$20 rebate card to a consumer if the consumer purchases a
particular product and submits a fully completed entry between
January 1, 2010 and December 31, 2010. Similarly, a merchant may
provide a $20 gift card to a consumer if the consumer makes $200
worth of qualifying purchases between June 1, 2010 and October 30,
2010. Under both examples, gift cards provided pursuant to these
loyalty, award, or promotional programs need not state the
disclosures in § 205.20(a)(4)(iii) to qualify for the exclusion in
§ 205.20(b)(3) for loyalty, award, or promotional gift cards
because the period of eligibility for each program began prior to
August 22, 2010.
20(h) Temporary Exemption 20(h)(1) - Delayed Effective Date
1. Application to certificates or cards produced prior to
April 1, 2010. Certificates or cards produced prior to April 1,
2010 may be sold to a consumer on or after August 22, 2010 without
satisfying the requirements of § 205.20(c)(3), (d)(2), (e)(1),
(e)(3), and (f) through January 30, 2011, provided that issuers of
such certificates or cards comply with the additional substantive
and disclosure requirements of §§ 205.20(h)(1)(i) through (iv).
Issuers of certificates or cards produced prior to April 1, 2010
need not satisfy these additional requirements if the certificates
or cards fully comply with the rule (§§ 205.20(a) through (f)). For
example, the in-store signage and other disclosures required by §
205.20(h)(2) do not apply to gift cards produced prior to April 1,
2010 that do not have fees and do not expire, and which otherwise
comply with the rule.
2. Expiration of temporary exemption. Certificates or
cards produced prior to April 1, 2010 that do not fully comply with
§§ 205.20(a) through (f) may not be issued or sold to consumers on
or after January 31, 2011.
20(h)(2) - Additional Disclosures
1. Disclosures through third parties. Issuers may make
the disclosures required by § 205.20(h)(2) through a third party,
such as a retailer or merchant. For example, an issuer may have a
merchant install in-store signage with the disclosures required by
§ 205.20(h)(2) on the issuer's behalf.
2. General advertising disclosures. Section 205.20(h)(2)
does not impose an obligation on the issuer to advertise gift
certificates, store gift cards, or general-use prepaid cards.
Appendix A - Model Disclosure Clauses and Forms
1. Review of forms. The Board will not review or approve
disclosure forms or statements for financial institutions. However,
the Board has issued model clauses for institutions to use in
designing their disclosures. If an institution uses these clauses
accurately to reflect its service, the institution is protected
from liability for failure to make disclosures in proper form.
2. Use of forms. The appendix contains model disclosure
clauses for optional use by financial institutions to facilitate
compliance with the disclosure requirements of sections 205.5(b)(2)
and (b)(3), 205.6(a), 205.7, 205.8(b), 205.14(b)(1)(ii),
205.15(d)(1) and (d)(2), and 205.18(c)(1) and (c)(2). The use of
appropriate clauses in making disclosures will protect a financial
institution from liability under sections 915 and 916 of the act
provided the clauses accurately reflect the institution's EFT
services.
3. Altering the clauses. Financial institutions may use
clauses of their own design in conjunction with the Board's model
clauses. The inapplicable words or portions of phrases in
parentheses should be deleted. The catchlines are not part of the
clauses and need not be used. Financial institutions may make
alterations, substitutions, or additions in the clauses to reflect
the services offered, such as technical changes (including the
substitution of a trade name for the word “card,” deletion of
inapplicable services, or substitution of lesser liability limits).
Several of the model clauses include references to a telephone
number and address. Where two or more of these clauses are used in
a disclosure, the telephone number and address may be referenced
and need not be repeated.
[Reg. E, 61 FR 19686, May 2, 1996, as amended at 66 FR 13412, Mar.
6, 2001; 66 FR 15192, Mar. 16, 2001; 66 FR 17794, Apr. 4, 2001; 71
FR 1661, Jan. 10, 2006; 71 FR 69437, Dec. 1, 2006; 71 FR 1482, Jan.
10, 2006, 71 FR 51450, Aug. 30, 2006; 72 FR 36593, July 5, 2007; 72
FR 63456, Nov. 9, 2007; 74 FR 59055, Nov. 17, 2009; 75 FR 31671,
June 4, 2010; 75 FR 16615, Apr. 1, 2010; 75 FR 50688, Aug. 17,
2010; 75 FR 66649, Oct. 29, 2010]
[Reg. E, 61 FR
19669, May 2, 1996, as amended at 63 FR 52118, Sept. 29, 1998; 66
FR 13412, Mar. 6, 2001; 66 FR 17793, Apr. 4, 2001; 71 FR 1659, Jan.
10, 2006; 71 FR 51456, Aug. 30, 2006; 71 FR 69437, Dec. 1, 2006; 72
FR 51450, Aug. 30, 2006; 74 FR 59053, Nov. 17, 2009]