CFPB Issues FAQs on Electronic Fund Transfers

The CFPB recently issued FAQs concerning unauthorized electronic fund transfers and error resolution in connection with the Electronic Fund Transfer Act (EFTA) and Regulation E.  

The FAQs address the following topics:

• When an unauthorized electronic fund transfer, as defined in Regulation E, has occurred;
• Whether and how a financial institution may determine a consumer is liable for an unauthorized electronic fund transfer;
• Whether a financial institution may require a consumer to file a police report or contact the merchant prior to initiating an error resolution investigation; and
• Whether private network rules or a financial institution’s agreement with a consumer may waive or reduce the protection the consumer would be entitled to under Regulation E.

The FAQs were issued in accordance with the CFPB’s Policy Statement on Compliance Aids.  As such, the FAQs are not technically binding on financial institutions (though they reflect the CFPB’s understanding of regulations which are binding, so as a practical matter companies should follow them).