by The Electronic Fund Transfer Act (EFTA) is a federal law that regulates electronic fund transfers (EFTs) such as direct deposits, automated teller machine (ATM) withdrawals, and debit card transactions. The EFTA was enacted in 1978 to protect consumers who use electronic funds transfer services, and to provide a basic framework for the regulation of electronic funds transfers.
The EFTA requires financial institutions to disclose certain information to consumers, such as the terms and conditions of electronic funds transfer services, and to provide certain consumer protections, such as error resolution procedures.
The EFTA requires financial institutions to provide consumers with certain disclosures about the terms and conditions of electronic funds transfer services, including fees, limitations on liability for unauthorized transfers, and error resolution procedures.
The EFTA also places limits on a consumer’s liability for unauthorized electronic fund transfers, and requires financial institutions to investigate and resolve errors that consumers report.
The EFTA also requires financial institutions to provide customers with a terminal receipt for ATM transactions and to provide periodic account statements for electronic funds transfer services.
The EFTA is enforced by the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board, which can impose penalties on institutions that violate the act, including fines and legal action.
Some of the key provisions include:
- Disclosure: Financial institutions must disclose certain information to consumers, such as the terms and conditions of electronic funds transfer services.
- Error resolution procedures: Financial institutions must provide certain consumer protections, such as error resolution procedures, which enables consumers to report and resolve errors in their account.
- Limits on liability: The EFTA places limits on a consumer’s liability for unauthorized electronic fund transfers.
- Terminal receipt for ATM transactions: Financial institutions must provide customers with a terminal receipt for ATM transactions.
- Periodic account statements: Financial institutions must provide periodic account statements for electronic funds transfer services.
- Preauthorized transfers: The EFTA regulates preauthorized electronic fund transfers, including those made through automatic bill payment services.
- Overdraft services: The EFTA regulates the disclosure and opt-in requirements for overdraft services for ATM and one-time debit card transactions.
- Enforcement: The EFTA is enforced by the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board, which can impose penalties on institutions that violate the act, including fines and legal action.
- Right to stop payment: The EFTA guarantees consumers the right to stop payment of preauthorized electronic fund transfers from their account.
- Right to receive written history of transactions: The EFTA guarantees consumers the right to receive a written history of electronic fund transfers made from their account for a period of up to two years.
