by Regulation EE is a federal regulation that applies to electronic fund transfers (EFTs) and requires financial institutions to disclose certain information to consumers about their rights and responsibilities related to EFTs. The regulation also establishes error resolution procedures for consumers who believe that their account has been incorrectly debited or credited as a result of an EFT. The regulation is enforced by the Consumer Financial Protection Bureau (CFPB) and the Federal Reserve Board.
Regulation EE is important because it helps to protect consumers’ rights and financial interests in relation to electronic fund transfers (EFTs). The regulation establishes error resolution procedures, liability limits, and disclosure requirements that ensure consumers are informed of their rights and responsibilities related to EFTs. It also requires financial institutions to implement security procedures to protect consumers’ account information and detect and report unauthorized EFTs.
The scope of Regulation EE applies to financial institutions that offer EFT services to consumers, such as banks, credit unions, and other types of depository institutions. The regulation applies to a wide range of EFTs, including automated teller machine (ATM) transactions, point-of-sale (POS) transactions, direct deposit, and preauthorized transfers from a consumer’s account.
However, Regulation EE does not apply to certain types of EFTs, such as wire transfers and transactions conducted through non-depository financial institutions, such as money transmitters. The regulation also does not apply to certain types of business accounts or government accounts.
Overall, the regulation is designed to ensure that consumers have access to accurate and timely information about EFTs, and that errors and unauthorized transactions are promptly resolved. It is important for financial institutions to comply with the regulation’s requirements to protect consumers’ rights and ensure the accurate and safe handling of EFTs.
Regulation EE has several provisions that are important for consumers and financial institutions to understand.
Some of the key provisions include:
- Disclosure of Consumer Rights: Financial institutions are required to provide consumers with a written disclosure that explains their rights and responsibilities related to EFTs, such as the types of EFTs that are covered, liability limits for unauthorized transactions, and error resolution procedures.
- Error Resolution Procedures: Financial institutions must establish procedures for consumers to report errors related to EFTs and must investigate and resolve such errors in a timely manner.
- Limitations on Liability: Consumers are generally not liable for unauthorized EFTs if they are reported within a certain time frame, typically 60 days after the statement on which the unauthorized EFT appears.
- Preauthorization of EFTs: Financial institutions must obtain consumers’ written or electronic consent before initiating certain types of EFTs, such as preauthorized transfers from a consumer’s account.
- Recordkeeping: Financial institutions must retain records of EFTs for a certain period of time, typically two years, to assist in error resolution and compliance with the regulation.
- Security Procedures: Financial institutions must implement procedures to protect consumers’ account information and detect and report unauthorized EFTs.
