SUBCHAPTER VI—ELECTRONIC FUND TRANSFERS
§1693. Congressional findings and declaration of purpose
(a) Rights and liabilities undefined
The Congress finds that the use of electronic systems to transfer funds provides the potential for substantial benefits to consumers. However, due to the unique characteristics of such systems, the application of existing consumer protection legislation is unclear, leaving the rights and liabilities of consumers, financial institutions, and intermediaries in electronic fund transfers undefined.
(b) Purposes
It is the purpose of this subchapter to provide a basic framework establishing the rights, liabilities, and responsibilities of participants in electronic fund and remittance transfer systems. The primary objective of this subchapter, however, is the provision of individual consumer rights.
(
Editorial Notes
Amendments
2010—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
Effective Date
[
Short Title
This subchapter known as the "Electronic Fund Transfer Act", see Short Title note set out under
§1693a. Definitions
As used in this subchapter—
(1) the term "accepted card or other means of access" means a card, code, or other means of access to a consumer's account for the purpose of initiating electronic fund transfers when the person to whom such card or other means of access was issued has requested and received or has signed or has used, or authorized another to use, such card or other means of access for the purpose of transferring money between accounts or obtaining money, property, labor, or services;
(2) the term "account" means a demand deposit, savings deposit, or other asset account (other than an occasional or incidental credit balance in an open end credit plan as defined in section 1602(i) 1 of this title), as described in regulations of the Bureau, established primarily for personal, family, or household purposes, but such term does not include an account held by a financial institution pursuant to a bona fide trust agreement;
(4) 2 the term "Board" means the Board of Governors of the Federal Reserve System;
(4) 2 the term "Bureau" means the Bureau of Consumer Financial Protection;
(5) the term "business day" means any day on which the offices of the consumer's financial institution involved in an electronic fund transfer are open to the public for carrying on substantially all of its business functions;
(6) the term "consumer" means a natural person;
(7) the term "electronic fund transfer" means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, direct deposits or withdrawals of funds, and transfers initiated by telephone. Such term does not include—
(A) any check guarantee or authorization service which does not directly result in a debit or credit to a consumer's account: 3
(B) any transfer of funds, other than those processed by automated clearinghouse, made by a financial institution on behalf of a consumer by means of a service that transfers funds held at either Federal Reserve banks or other depository institutions and which is not designed primarily to transfer funds on behalf of a consumer;
(C) any transaction the primary purpose of which is the purchase or sale of securities or commodities through a broker-dealer registered with or regulated by the Securities and Exchange Commission;
(D) any automatic transfer from a savings account to a demand deposit account pursuant to an agreement between a consumer and a financial institution for the purpose of covering an overdraft or maintaining an agreed upon minimum balance in the consumer's demand deposit account; or
(E) any transfer of funds which is initiated by a telephone conversation between a consumer and an officer or employee of a financial institution which is not pursuant to a prearranged plan and under which periodic or recurring transfers are not contemplated;
as determined under regulations of the Bureau;
(8) the term "electronic terminal" means an electronic device, other than a telephone operated by a consumer, through which a consumer may initiate an electronic fund transfer. Such term includes, but is not limited to, point-of-sale terminals, automated teller machines, and cash dispensing machines;
(9) the term "financial institution" means a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal credit union, or any other person who, directly or indirectly, holds an account belonging to a consumer;
(10) the term "preauthorized electronic fund transfer" means an electronic fund transfer authorized in advance to recur at substantially regular intervals;
(11) the term "State" means any State, territory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any political subdivision of any of the foregoing; and
(12) the term "unauthorized electronic fund transfer" means an electronic fund transfer from a consumer's account initiated by a person other than the consumer without actual authority to initiate such transfer and from which the consumer receives no benefit, but the term does not include any electronic fund transfer (A) initiated by a person other than the consumer who was furnished with the card, code, or other means of access to such consumer's account by such consumer, unless the consumer has notified the financial institution involved that transfers by such other person are no longer authorized, (B) initiated with fraudulent intent by the consumer or any person acting in concert with the consumer, or (C) which constitutes an error committed by a financial institution.
(
Editorial Notes
References in Text
Amendments
2010—
Par. (3).
Par. (4).
Pars. (5) to (12).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
1 See References in Text note below.
2 So in original. There are two pars. designated "(4)" and no par. (3).
3 So in original. The colon probably should be a semicolon.
§1693b. Regulations
(a) Prescription by the Bureau and the Board
(1) In general
Except as provided in paragraph (2), the Bureau shall prescribe rules to carry out the purposes of this subchapter.
(2) Authority of the Board
The Board shall have sole authority to prescribe rules—
(A) to carry out the purposes of this subchapter with respect to a person described in
(B) to carry out the purposes of
In prescribing such regulations, the Board shall:
(1) 1 consult with the other agencies referred to in section 1693o 2 of this title and take into account, and allow for, the continuing evolution of electronic banking services and the technology utilized in such services,
(2) 1 prepare an analysis of economic impact which considers the costs and benefits to financial institutions, consumers, and other users of electronic fund transfers, including the extent to which additional documentation, reports, records, or other paper work would be required, and the effects upon competition in the provision of electronic banking services among large and small financial institutions and the availability of such services to different classes of consumers, particularly low income consumers,
(3) 1 to the extent practicable, the Board shall demonstrate that the consumer protections of the proposed regulations outweigh the compliance costs imposed upon consumers and financial institutions, and
(4) 1 any proposed regulations and accompanying analyses shall be sent promptly to Congress by the Board.
(b) Issuance of model clauses
The Bureau shall issue model clauses for optional use by financial institutions to facilitate compliance with the disclosure requirements of
(c) Criteria; modification of requirements
Regulations prescribed hereunder may contain such classifications, differentiations, or other provisions, and may provide for such adjustments and exceptions for any class of electronic fund transfers or remittance transfers, as in the judgment of the Bureau are necessary or proper to effectuate the purposes of this subchapter, to prevent circumvention or evasion thereof, or to facilitate compliance therewith. The Bureau shall by regulation modify the requirements imposed by this subchapter on small financial institutions if the Bureau determines that such modifications are necessary to alleviate any undue compliance burden on small financial institutions and such modifications are consistent with the purpose and objective of this subchapter.
(d) Applicability to service providers other than certain financial institutions
(1) In general
If electronic fund transfer services are made available to consumers by a person other than a financial institution holding a consumer's account, the Bureau shall by regulation assure that the disclosures, protections, responsibilities, and remedies created by this subchapter are made applicable to such persons and services.
(2) State and local government electronic benefit transfer systems
(A) "Electronic benefit transfer system" defined
In this paragraph, the term "electronic benefit transfer system"—
(i) means a system under which a government agency distributes needs-tested benefits by establishing accounts that may be accessed by recipients electronically, such as through automated teller machines or point-of-sale terminals; and
(ii) does not include employment-related payments, including salaries and pension, retirement, or unemployment benefits established by a Federal, State, or local government agency.
(B) Exemption generally
The disclosures, protections, responsibilities, and remedies established under this subchapter, and any regulation prescribed or order issued by the Bureau in accordance with this subchapter, shall not apply to any electronic benefit transfer system established under State or local law or administered by a State or local government.
(C) Exception for direct deposit into recipient's account
Subparagraph (B) shall not apply with respect to any electronic funds transfer under an electronic benefit transfer system for a deposit directly into a consumer account held by the recipient of the benefit.
(D) Rule of construction
No provision of this paragraph—
(i) affects or alters the protections otherwise applicable with respect to benefits established by any other provision 3 Federal, State, or local law; or
(ii) otherwise supersedes the application of any State or local law.
(3) Fee disclosures at automated teller machines
(A) In general
The regulations prescribed under paragraph (1) shall require any automated teller machine operator who imposes a fee on any consumer for providing host transfer services to such consumer to provide notice in accordance with subparagraph (B) to the consumer (at the time the service is provided) of—
(i) the fact that a fee is imposed by such operator for providing the service; and
(ii) the amount of any such fee.
(B) Notice requirement
The notice required under clauses (i) and (ii) of subparagraph (A) with respect to any fee described in such subparagraph shall appear on the screen of the automated teller machine, or on a paper notice issued from such machine, after the transaction is initiated and before the consumer is irrevocably committed to completing the transaction.
(C) Prohibition on fees not properly disclosed and explicitly assumed by consumer
No fee may be imposed by any automated teller machine operator in connection with any electronic fund transfer initiated by a consumer for which a notice is required under subparagraph (A), unless—
(i) the consumer receives such notice in accordance with subparagraph (B); and
(ii) the consumer elects to continue in the manner necessary to effect the transaction after receiving such notice.
(D) Definitions
For purposes of this paragraph, the following definitions shall apply:
(i) Automated teller machine operator
The term "automated teller machine operator" means any person who—
(I) operates an automated teller machine at which consumers initiate electronic fund transfers; and
(II) is not the financial institution that holds the account of such consumer from which the transfer is made.
(ii) Electronic fund transfer
The term "electronic fund transfer" includes a transaction that involves a balance inquiry initiated by a consumer in the same manner as an electronic fund transfer, whether or not the consumer initiates a transfer of funds in the course of the transaction.
(iii) Host transfer services
The term "host transfer services" means any electronic fund transfer made by an automated teller machine operator in connection with a transaction initiated by a consumer at an automated teller machine operated by such operator.
(e) Deference
No provision of this subchapter may be construed as altering, limiting, or otherwise affecting the deference that a court affords to—
(1) the Bureau in making determinations regarding the meaning or interpretation of any provision of this subchapter for which the Bureau has authority to prescribe regulations; or
(2) the Board in making determinations regarding the meaning or interpretation of
(
Editorial Notes
References in Text
Amendments
2012—Subsec. (d)(3)(B).
"(i)
"(ii)
and struck out ", except that during the period beginning on November 12, 1999, and ending on December 31, 2004, this clause shall not apply to any automated teller machine that lacks the technical capability to disclose the notice on the screen or to issue a paper notice after the transaction is initiated and before the consumer is irrevocably committed to completing the transaction" after "completing the transaction".
2010—
Subsec. (a).
Subsec. (c).
Subsec. (e).
1999—Subsec. (d)(3).
1996—Subsec. (d).
"(2)
"(A)
"(B)
"(C)
"(i) affecting or altering the protections otherwise applicable with respect to benefits established by Federal, State, or local law; or
"(ii) otherwise superseding the application of any State or local law.
"(D)
"(i) means a program under which a government agency distributes needs-tested benefits by establishing accounts to be accessed by recipients electronically, such as through automated teller machines, or point-of-sale terminals; and
"(ii) does not include employment-related payments, including salaries and pension, retirement, or unemployment benefits established by Federal, State, or local governments."
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by section 1073(a)(2) of
Amendment by section 1084(1), (3) of
1 So in original. See 2010 Amendment note below.
2 See References in Text note below.
3 So in original. Probably should be followed by "of".
§1693c. Terms and conditions of transfers
(a) Disclosures; time; form; contents
The terms and conditions of electronic fund transfers involving a consumer's account shall be disclosed at the time the consumer contracts for an electronic fund transfer service, in accordance with regulations of the Bureau. Such disclosures shall be in readily understandable language and shall include, to the extent applicable—
(1) the consumer's liability for unauthorized electronic fund transfers and, at the financial institution's option, notice of the advisability of prompt reporting of any loss, theft, or unauthorized use of a card, code, or other means of access;
(2) the telephone number and address of the person or office to be notified in the event the consumer believes than 1 an unauthorized electronic fund transfer has been or may be effected;
(3) the type and nature of electronic fund transfers which the consumer may initiate, including any limitations on the frequency or dollar amount of such transfers, except that the details of such limitations need not be disclosed if their confidentiality is necessary to maintain the security of an electronic fund transfer system, as determined by the Bureau;
(4) any charges for electronic fund transfers or for the right to make such transfers;
(5) the consumer's right to stop payment of a preauthorized electronic fund transfer and the procedure to initiate such a stop payment order;
(6) the consumer's right to receive documentation of electronic fund transfers under
(7) a summary, in a form prescribed by regulations of the Bureau, of the error resolution provisions of
(8) the financial institution's liability to the consumer under
(9) under what circumstances the financial institution will in the ordinary course of business disclose information concerning the consumer's account to third persons; and
(10) a notice to the consumer that a fee may be imposed by—
(A) an automated teller machine operator (as defined in
(B) any national, regional, or local network utilized to effect the transaction.
(b) Notification of changes to consumer
A financial institution shall notify a consumer in writing at least twenty-one days prior to the effective date of any change in any term or condition of the consumer's account required to be disclosed under subsection (a) if such change would result in greater cost or liability for such consumer or decreased access to the consumer's account. A financial institution may, however, implement a change in the terms or conditions of an account without prior notice when such change is immediately necessary to maintain or restore the security of an electronic fund transfer system or a consumer's account. Subject to subsection (a)(3), the Bureau shall require subsequent notification if such a change is made permanent.
(c) Time for disclosures respecting accounts accessible prior to effective date of this subchapter
For any account of a consumer made accessible to electronic fund transfers prior to the effective date of this subchapter, the information required to be disclosed to the consumer under subsection (a) shall be disclosed not later than the earlier of—
(1) the first periodic statement required by
(2) thirty days after the effective date of this subchapter.
(
Editorial Notes
References in Text
For effective date of this subchapter, referred to in subsec. (c), see section 921 of
Amendments
2010—Subsecs. (a), (b).
1999—Subsec. (a)(10).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
1 So in original. Probably should be "that".
§1693d. Documentation of transfers
(a) Availability of written documentation to consumer; contents
For each electronic fund transfer initiated by a consumer from an electronic terminal, the financial institution holding such consumer's account shall, directly or indirectly, at the time the transfer is initiated, make available to the consumer written documentation of such transfer. The documentation shall clearly set forth to the extent applicable—
(1) the amount involved and date the transfer is initiated;
(2) the type of transfer;
(3) the identity of the consumer's account with the financial institution from which or to which funds are transferred;
(4) the identity of any third party to whom or from whom funds are transferred; and
(5) the location or identification of the electronic terminal involved.
(b) Notice of credit to consumer
For a consumer's account which is scheduled to be credited by a preauthorized electronic fund transfer from the same payor at least once in each successive sixty-day period, except where the payor provides positive notice of the transfer to the consumer, the financial institution shall elect to provide promptly either positive notice to the consumer when the credit is made as scheduled, or negative notice to the consumer when the credit is not made as scheduled, in accordance with regulations of the Bureau. The means of notice elected shall be disclosed to the consumer in accordance with
(c) Periodic statement; contents
A financial institution shall provide each consumer with a periodic statement for each account of such consumer that may be accessed by means of an electronic fund transfer. Except as provided in subsections (d) and (e), such statement shall be provided at least monthly for each monthly or shorter cycle in which an electronic fund transfer affecting the account has occurred, or every three months, whichever is more frequent. The statement, which may include information regarding transactions other than electronic fund transfers, shall clearly set forth—
(1) with regard to each electronic fund transfer during the period, the information described in subsection (a), which may be provided on an accompanying document;
(2) the amount of any fee or charge assessed by the financial institution during the period for electronic fund transfers or for account maintenance;
(3) the balances in the consumer's account at the beginning of the period and at the close of the period; and
(4) the address and telephone number to be used by the financial institution for the purpose of receiving any statement inquiry or notice of account error from the consumer. Such address and telephone number shall be preceded by the caption "Direct Inquiries To:" or other similar language indicating that the address and number are to be used for such inquiries or notices.
(d) Consumer passbook accounts
In the case of a consumer's passbook account which may not be accessed by electronic fund transfers other than preauthorized electronic fund transfers crediting the account, a financial institution may, in lieu of complying with the requirements of subsection (c), upon presentation of the passbook provide the consumer in writing with the amount and date of each such transfer involving the account since the passbook was last presented.
(e) Accounts other than passbook accounts
In the case of a consumer's account, other than a passbook account, which may not be accessed by electronic fund transfers other than preauthorized electronic fund transfers crediting the account, the financial institution may provide a periodic statement on a quarterly basis which otherwise complies with the requirements of subsection (c).
(f) Documentation as evidence
In any action involving a consumer, any documentation required by this section to be given to the consumer which indicates that an electronic fund transfer was made to another person shall be admissible as evidence of such transfer and shall constitute prima facie proof that such transfer was made.
(
Editorial Notes
Amendments
2010—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
§1693e. Preauthorized transfers
(a) A preauthorized electronic fund transfer from a consumer's account may be authorized by the consumer only in writing, and a copy of such authorization shall be provided to the consumer when made. A consumer may stop payment of a preauthorized electronic fund transfer by notifying the financial institution orally or in writing at any time up to three business days preceding the scheduled date of such transfer. The financial institution may require written confirmation to be provided to it within fourteen days of an oral notification if, when the oral notification is made, the consumer is advised of such requirement and the address to which such confirmation should be sent.
(b) In the case of preauthorized transfers from a consumer's account to the same person which may vary in amount, the financial institution or designated payee shall, prior to each transfer, provide reasonable advance notice to the consumer, in accordance with regulations of the Bureau, of the amount to be transferred and the scheduled date of the transfer.
(
Editorial Notes
Amendments
2010—Subsec. (b).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
§1693f. Error resolution
(a) Notification to financial institution of error
If a financial institution, within sixty days after having transmitted to a consumer documentation pursuant to
(1) sets forth or otherwise enables the financial institution to identify the name and account number of the consumer;
(2) indicates the consumer's belief that the documentation, or, in the case of notification pursuant to
(3) sets forth the reasons for the consumer's belief (where applicable) that an error has occurred,
the financial institution shall investigate the alleged error, determine whether an error has occurred, and report or mail the results of such investigation and determination to the consumer within ten business days. The financial institution may require written confirmation to be provided to it within ten business days of an oral notification of error if, when the oral notification is made, the consumer is advised of such requirement and the address to which such confirmation should be sent. A financial institution which requires written confirmation in accordance with the previous sentence need not provisionally recredit a consumer's account in accordance with subsection (c), nor shall the financial institution be liable under subsection (e) if the written confirmation is not received within the ten-day period referred to in the previous sentence.
(b) Correction of error; interest
If the financial institution determines that an error did occur, it shall promptly, but in no event more than one business day after such determination, correct the error, subject to
(c) Provisional recredit of consumer's account
If a financial institution receives notice of an error in the manner and within the time period specified in subsection (a), it may, in lieu of the requirements of subsections (a) and (b), within ten business days after receiving such notice provisionally recredit the consumer's account for the amount alleged to be in error, subject to
(d) Absence of error; finding; explanation
If the financial institution determines after its investigation pursuant to subsection (a) or (c) that an error did not occur, it shall deliver or mail to the consumer an explanation of its findings within 3 business days after the conclusion of its investigation, and upon request of the consumer promptly deliver or mail to the consumer reproductions of all documents which the financial institution relied on to conclude that such error did not occur. The financial institution shall include notice of the right to request reproductions with the explanation of its findings.
(e) Treble damages
If in any action under section 1693m 1 of this title, the court finds that—
(1) the financial institution did not provisionally recredit a consumer's account within the ten-day period specified in subsection (c), and the financial institution (A) did not make a good faith investigation of the alleged error, or (B) did not have a reasonable basis for believing that the consumer's account was not in error; or
(2) the financial institution knowingly and willfully concluded that the consumer's account was not in error when such conclusion could not reasonably have been drawn from the evidence available to the financial institution at the time of its investigation,
then the consumer shall be entitled to treble damages determined under section 1693m(a)(1) 1 of this title.
(f) Acts constituting error
For the purpose of this section, an error consists of—
(1) an unauthorized electronic fund transfer;
(2) an incorrect electronic fund transfer from or to the consumer's account;
(3) the omission from a periodic statement of an electronic fund transfer affecting the consumer's account which should have been included;
(4) a computational error by the financial institution;
(5) the consumer's receipt of an incorrect amount of money from an electronic terminal;
(6) a consumer's request for additional information or clarification concerning an electronic fund transfer or any documentation required by this subchapter; or
(7) any other error described in regulations of the Bureau.
(
Editorial Notes
References in Text
Amendments
2010—Subsec. (f)(7).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
1 See References in Text note below.
§1693g. Consumer liability
(a) Unauthorized electronic fund transfers; limit
A consumer shall be liable for any unauthorized electronic fund transfer involving the account of such consumer only if the card or other means of access utilized for such transfer was an accepted card or other meanas 1 of access and if the issuer of such card, code, or other means of access has provided a means whereby the user of such card, code, or other means of access can be identified as the person authorized to use it, such as by signature, photograph, or fingerprint or by electronic or mechanical confirmation. In no event, however, shall a consumer's liability for an unauthorized transfer exceed the lesser of—
(1) $50; or
(2) the amount of money or value of property or services obtained in such unauthorized electronic fund transfer prior to the time the financial institution is notified of, or otherwise becomes aware of, circumstances which lead to the reasonable belief that an unauthorized electronic fund transfer involving the consumer's account has been or may be effected. Notice under this paragraph is sufficient when such steps have been taken as may be reasonably required in the ordinary course of business to provide the financial institution with the pertinent information, whether or not any particular officer, employee, or agent of the financial institution does in fact receive such information.
Notwithstanding the foregoing, reimbursement need not be made to the consumer for losses the financial institution establishes would not have occurred but for the failure of the consumer to report within sixty days of transmittal of the statement (or in extenuating circumstances such as extended travel or hospitalization, within a reasonable time under the circumstances) any unauthorized electronic fund transfer or account error which appears on the periodic statement provided to the consumer under
(b) Burden of proof
In any action which involves a consumer's liability for an unauthorized electronic fund transfer, the burden of proof is upon the financial institution to show that the electronic fund transfer was authorized or, if the electronic fund transfer was unauthorized, then the burden of proof is upon the financial institution to establish that the conditions of liability set forth in subsection (a) have been met, and, if the transfer was initiated after the effective date of
(c) Determination of limitation on liability
In the event of a transaction which involves both an unauthorized electronic fund transfer and an extension of credit as defined in section 1602(e) 2 of this title pursuant to an agreement between the consumer and the financial institution to extend such credit to the consumer in the event the consumer's account is overdrawn, the limitation on the consumer's liability for such transaction shall be determined solely in accordance with this section.
(d) Restriction on liability
Nothing in this section imposes liability upon a consumer for an unauthorized electronic fund transfer in excess of his liability for such a transfer under other applicable law or under any agreement with the consumer's financial institution.
(e) Scope of liability
Except as provided in this section, a consumer incurs no liability from an unauthorized electronic fund transfer.
(
Editorial Notes
References in Text
1 So in original. Probably should be "means".
2 See References in Text note below.
§1693h. Liability of financial institutions
(a) Action or failure to act proximately causing damages
Subject to subsections (b) and (c), a financial institution shall be liable to a consumer for all damages proximately caused by—
(1) the financial institution's failure to make an electronic fund transfer, in accordance with the terms and conditions of an account, in the correct amount or in a timely manner when properly instructed to do so by the consumer, except where—
(A) the consumer's account has insufficient funds;
(B) the funds are subject to legal process or other encumbrance restricting such transfer;
(C) such transfer would exceed an established credit limit;
(D) an electronic terminal has insufficient cash to complete the transaction; or
(E) as otherwise provided in regulations of the Bureau;
(2) the financial institution's failure to make an electronic fund transfer due to insufficient funds when the financal 1 institution failed to credit, in accordance with the terms and conditions of an account, a deposit of funds to the consumer's account which would have provided sufficient funds to make the transfer, and
(3) the financial institution's failure to stop payment of a preauthorized transfer from a consumer's account when instructed to do so in accordance with the terms and conditions of the account.
(b) Acts of God and technical malfunctions
A financial institution shall not be liable under subsection (a)(1) or (2) if the financial institution shows by a preponderance of the evidence that its action or failure to act resulted from—
(1) an act of God or other circumstance beyond its control, that it exercised reasonable care to prevent such an occurrence, and that it exercised such diligence as the circumstances required; or
(2) a technical malfunction which was known to the consumer at the time he attempted to initiate an electronic fund transfer or, in the case of a preauthorized transfer, at the time such transfer should have occurred.
(c) Intent
In the case of a failure described in subsection (a) which was not intentional and which resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, the financial institution shall be liable for actual damages proved.
(d) Exception for damaged notices
If the notice required to be posted pursuant to
(
Editorial Notes
Amendments
2010—Subsec. (a)(1)(E).
1999—Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
1 So in original. Probably should be "financial".
§1693i. Issuance of cards or other means of access
(a) Prohibition; proper issuance
No person may issue to a consumer any card, code, or other means of access to such consumer's account for the purpose of initiating an electronic fund transfer other than—
(1) in response to a request or application therefor; or
(2) as a renewal of, or in substitution for, an accepted card, code, or other means of access, whether issued by the initial issuer or a successor.
(b) Exceptions
Notwithstanding the provisions of subsection (a), a person may distribute to a consumer on an unsolicited basis a card, code, or other means of access for use in initiating an electronic fund transfer from such consumer's account, if—
(1) such card, code, or other means of access is not validated;
(2) such distribution is accompanied by a complete disclosure, in accordance with
(3) such distribution is accompanied by a clear explanation, in accordance with regulations of the Bureau, that such card, code, or other means of access is not validated and how the consumer may dispose of such code, card, or other means of access if validation is not desired; and
(4) such card, code, or other means of access is validated only in response to a request or application from the consumer, upon verification of the consumer's identity.
(c) Validation
For the purpose of subsection (b), a card, code, or other means of access is validated when it may be used to initiate an electronic fund transfer.
(
Editorial Notes
Amendments
2010—Subsec. (b)(3).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
§1693j. Suspension of obligations
If a system malfunction prevents the effectuation of an electronic fund transfer initiated by a consumer to another person, and such other person has agreed to accept payment by such means, the consumer's obligation to the other person shall be suspended until the malfunction is corrected and the electronic fund transfer may be completed, unless such other person has subsequently, by written request, demanded payment by means other than an electronic fund transfer.
(
§1693k. Compulsory use of electronic fund transfers
No person may—
(1) condition the extension of credit to a consumer on such consumer's repayment by means of preauthorized electronic fund transfers; or
(2) require a consumer to establish an account for receipt of electronic fund transfers with a particular financial institution as a condition of employment or receipt of a government benefit.
(
§1693l. Waiver of rights
No writing or other agreement between a consumer and any other person may contain any provision which constitutes a waiver of any right conferred or cause of action created by this subchapter. Nothing in this section prohibits, however, any writing or other agreement which grants to a consumer a more extensive right or remedy or greater protection than contained in this subchapter or a waiver given in settlement of a dispute or action.
(
§1693l–1. General-use prepaid cards, gift certificates, and store gift cards
(a) Definitions
In this section, the following definitions shall apply:
(1) Dormancy fee; inactivity charge or fee
The terms "dormancy fee" and "inactivity charge or fee" mean a fee, charge, or penalty for non-use or inactivity of a gift certificate, store gift card, or general-use prepaid card.
(2) General use 1 prepaid card, gift certificate, and store gift card
(A) General-use prepaid card
The term "general-use prepaid card" means a card or other payment code or device issued by any person that is—
(i) redeemable at multiple, unaffiliated merchants or service providers, or automated teller machines;
(ii) issued in a requested amount, whether or not that amount may, at the option of the issuer, be increased in value or reloaded if requested by the holder;
(iii) purchased or loaded on a prepaid basis; and
(iv) honored, upon presentation, by merchants for goods or services, or at automated teller machines.
(B) Gift certificate
The term "gift certificate" means an electronic promise that is—
(i) redeemable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo;
(ii) issued in a specified amount that may not be increased or reloaded;
(iii) purchased on a prepaid basis in exchange for payment; and
(iv) honored upon presentation by such single merchant or affiliated group of merchants for goods or services.
(C) Store gift card
The term "store gift card" means an electronic promise, plastic card, or other payment code or device that is—
(i) redeemable at a single merchant or an affiliated group of merchants that share the same name, mark, or logo;
(ii) issued in a specified amount, whether or not that amount may be increased in value or reloaded at the request of the holder;
(iii) purchased on a prepaid basis in exchange for payment; and
(iv) honored upon presentation by such single merchant or affiliated group of merchants for goods or services.
(D) Exclusions
The terms "general-use prepaid card", "gift certificate", and "store gift card" do not include an electronic promise, plastic card, or payment code or device that is—
(i) used solely for telephone services;
(ii) reloadable and not marketed or labeled as a gift card or gift certificate;
(iii) a loyalty, award, or promotional gift card, as defined by the Bureau;
(iv) not marketed to the general public;
(v) issued in paper form only (including for tickets and events); or
(vi) redeemable solely for admission to events or venues at a particular location or group of affiliated locations, which may also include services or goods obtainable—
(I) at the event or venue after admission; or
(II) in conjunction with admission to such events or venues, at specific locations affiliated with and in geographic proximity to the event or venue.
(3) Service fee
(A) In general
The term "service fee" means a periodic fee, charge, or penalty for holding or use of a gift certificate, store gift card, or general-use prepaid card.
(B) Exclusion
With respect to a general-use prepaid card, the term "service fee" does not include a one-time initial issuance fee.
(b) Prohibition on imposition of fees or charges
(1) In general
Except as provided under paragraphs (2) through (4), it shall be unlawful for any person to impose a dormancy fee, an inactivity charge or fee, or a service fee with respect to a gift certificate, store gift card, or general-use prepaid card.
(2) Exceptions
A dormancy fee, inactivity charge or fee, or service fee may be charged with respect to a gift certificate, store gift card, or general-use prepaid card, if—
(A) there has been no activity with respect to the certificate or card in the 12-month period ending on the date on which the charge or fee is imposed;
(B) the disclosure requirements of paragraph (3) have been met;
(C) not more than one fee may be charged in any given month; and
(D) any additional requirements that the Bureau may establish through rulemaking under subsection (d) have been met.
(3) Disclosure requirements
The disclosure requirements of this paragraph are met if—
(A) the gift certificate, store gift card, or general-use prepaid card clearly and conspicuously states—
(i) that a dormancy fee, inactivity charge or fee, or service fee may be charged;
(ii) the amount of such fee or charge;
(iii) how often such fee or charge may be assessed; and
(iv) that such fee or charge may be assessed for inactivity; and
(B) the issuer or vendor of such certificate or card informs the purchaser of such charge or fee before such certificate or card is purchased, regardless of whether the certificate or card is purchased in person, over the Internet, or by telephone.
(4) Exclusion
The prohibition under paragraph (1) shall not apply to any gift certificate—
(A) that is distributed pursuant to an award, loyalty, or promotional program, as defined by the Bureau; and
(B) with respect to which, there is no money or other value exchanged.
(c) Prohibition on sale of gift cards with expiration dates
(1) In general
Except as provided under paragraph (2), it shall be unlawful for any person to sell or issue a gift certificate, store gift card, or general-use prepaid card that is subject to an expiration date.
(2) Exceptions
A gift certificate, store gift card, or general-use prepaid card may contain an expiration date if—
(A) the expiration date is not earlier than 5 years after the date on which the gift certificate was issued, or the date on which card funds were last loaded to a store gift card or general-use prepaid card; and
(B) the terms of expiration are clearly and conspicuously stated.
(d) Additional rulemaking
(1) In general
The Bureau shall—
(A) prescribe regulations to carry out this section, in addition to any other rules or regulations required by this subchapter, including such additional requirements as appropriate relating to the amount of dormancy fees, inactivity charges or fees, or service fees that may be assessed and the amount of remaining value of a gift certificate, store gift card, or general-use prepaid card below which such charges or fees may be assessed; and
(B) shall 2 determine the extent to which the individual definitions and provisions of this subchapter or Regulation E should apply to general-use prepaid cards, gift certificates, and store gift cards.
(2) Consultation
In prescribing regulations under this subsection, the Bureau shall consult with the Federal Trade Commission.
(3) Timing; effective date
The regulations required by this subsection shall be issued in final form not later than 9 months after May 22, 2009.
(
Editorial Notes
Prior Provisions
A prior section 915 of
Amendments
2010—
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
Effective Date
"(a)
"(b)
"(1)
"(A) comply with paragraphs (1) and (2) of section 915(b) of such Act [
"(B) consider any such certificate or card for which funds expire to have no expiration date with respect to the underlying funds;
"(C) at a consumer's request, replace such certificate or card that has funds remaining at no cost to the consumer; and
"(D) comply with the disclosure requirements of paragraph (2) of this subsection.
"(2)
"(A) any such certificate or card for which funds expire shall be deemed to have no expiration date with respect to the underlying funds;
"(B) consumers holding such certificate or card shall have a right to a free replacement certificate or card that includes the packaging and materials, typically associated with such a certificate or card; and
"(C) any dormancy fee, inactivity fee, or service fee for such certificates or cards that might otherwise be charged shall not be charged if such fees do not comply with section 915 of the Electronic Funds [probably should be "Fund"] Transfer Act [
"(3)
1 So in original. Probably should be "General-use".
2 So in original. The word "shall" probably should not appear.
§1693m. Civil liability
(a) Individual or class action for damages; amount of award
Except as otherwise provided by this section and
(1) any actual damage sustained by such consumer as a result of such failure;
(2)(A) in the case of an individual action, an amount not less than $100 nor greater than $1,000; or
(B) in the case of a class action, such amount as the court may allow, except that (i) as to each member of the class no minimum recovery shall be applicable, and (ii) the total recovery under this subparagraph in any class action or series of class actions arising out of the same failure to comply by the same person shall not be more than the lesser of $500,000 or 1 per centum of the net worth of the defendant; and
(3) in the case of any successful action to enforce the foregoing liability, the costs of the action, together with a reasonable attorney's fee as determined by the court.
(b) Factors determining amount of award
In determining the amount of liability in any action under subsection (a), the court shall consider, among other relevant factors—
(1) in any individual action under subsection (a)(2)(A), the frequency and persistence of noncompliance, the nature of such noncompliance, and the extent to which the noncompliance was intentional; or
(2) in any class action under subsection (a)(2)(B), the frequency and persistence of noncompliance, the nature of such noncompliance, the resources of the defendant, the number of persons adversely affected, and the extent to which the noncompliance was intentional.
(c) Unintentional violations; bona fide error
Except as provided in
(d) Good faith compliance with rule, regulation, or interpretation
No provision of this section or section 1693n 1 of this title imposing any liability shall apply to—
(1) any act done or omitted in good faith in conformity with any rule, regulation, or interpretation thereof by the Bureau or the Board or in conformity with any interpretation or approval by an official or employee of the Bureau of Consumer Financial Protection or the Federal Reserve System duly authorized by the Bureau or the Board to issue such interpretations or approvals under such procedures as the Bureau or the Board may prescribe therefor; or
(2) any failure to make disclosure in proper form if a financial institution utilized an appropriate model clause issued by the Bureau or the Board,
notwithstanding that after such act, omission, or failure has occurred, such rule, regulation, approval, or model clause is amended, rescinded, or determined by judicial or other authority to be invalid for any reason.
(e) Notification to consumer prior to action; adjustment of consumer's account
A person has no liability under this section for any failure to comply with any requirement under this subchapter if, prior to the institution of an action under this section, the person notifies the consumer concerned of the failure, complies with the requirements of this subchapter, and makes an appropriate adjustment to the consumer's account and pays actual damages or, where applicable, damages in accordance with
(f) Action in bad faith or for harassment; attorney's fees
On a finding by the court that an unsuccessful action under this section was brought in bad faith or for purposes of harassment, the court shall award to the defendant attorney's fees reasonable in relation to the work expended and costs.
(g) Jurisdiction of courts; time for maintenance of action
Without regard to the amount in controversy, any action under this section may be brought in any United States district court, or in any other court of competent jurisdiction, within one year from the date of the occurrence of the violation.
(
Editorial Notes
References in Text
Prior Provisions
A prior section 916 of
Amendments
2010—
Subsec. (d).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
1 See References in Text note below.
§1693n. Criminal liability
(a) Violations respecting giving of false or inaccurate information, failure to provide information, and failure to comply with provisions of this subchapter
Whoever knowingly and willfully—
(1) gives false or inaccurate information or fails to provide information which he is required to disclose by this subchapter or any regulation issued thereunder; or
(2) otherwise fails to comply with any provision of this subchapter;
shall be fined not more than $5,000 or imprisoned not more than one year, or both.
(b) Violations affecting interstate or foreign commerce
Whoever—
(1) knowingly, in a transaction affecting interstate or foreign commerce, uses or attempts or conspires to use any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained debit instrument to obtain money, goods, services, or anything else of value which within any one-year period has a value aggregating $1,000 or more; or
(2) with unlawful or fraudulent intent, transports or attempts or conspires to transport in interstate or foreign commerce a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained debit instrument knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained; or
(3) with unlawful or fraudulent intent, uses any instrumentality of interstate or foreign commerce to sell or transport a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained debit instrument knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained; or
(4) knowingly receives, conceals, uses, or transports money, goods, services, or anything else of value (except tickets for interstate or foreign transportation) which (A) within any one-year period has a value aggregating $1,000 or more, (B) has moved in or is part of, or which constitutes interstate or foreign commerce, and (C) has been obtained with a counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained debit instrument; or
(5) knowingly receives, conceals, uses, sells, or transports in interstate or foreign commerce one or more tickets for interstate or foreign transportation, which (A) within any one-year period have a value aggregating $500 or more, and (B) have been purchased or obtained with one or more counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained debit instrument; or
(6) in a transaction affecting interstate or foreign commerce, furnishes money, property, services, or anything else of value, which within any one-year period has a value aggregating $1,000 or more, through the use of any counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained debit instrument knowing the same to be counterfeit, fictitious, altered, forged, lost, stolen, or fraudulently obtained—
shall be fined not more than $10,000 or imprisoned not more than ten years, or both.
(c) "Debit instrument" defined
As used in this section, the term "debit instrument" means a card, code, or other device, other than a check, draft, or similar paper instrument, by the use of which a person may initiate an electronic fund transfer.
(
Editorial Notes
Prior Provisions
A prior section 917 of
§1693o. Administrative enforcement
(a) Enforcing agencies
Subject to subtitle B of the Consumer Financial Protection Act of 2010 [
(1) section 8 of the Federal Deposit Insurance Act [
(A) national banks, Federal savings associations, and Federal branches and Federal agencies of foreign banks;
(B) member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25A of the Federal Reserve Act [
(C) banks and State savings associations insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), and insured State branches of foreign banks;
(2) the Federal Credit Union Act [
(3) part A of subtitle VII of title 49, by the Secretary of Transportation, with respect to any air carrier or foreign air carrier subject to that part;
(4) the Securities Exchange Act of 1934 [
(5) subtitle E of the Consumer Financial Protection Act of 2010 [
The terms used in paragraph (1) that are not defined in this subchapter or otherwise defined in section 3(s) of the Federal Deposit Insurance Act (
(b) Violations of subchapter deemed violations of pre-existing statutory requirements; additional powers
For the purpose of the exercise by any agency referred to in any of paragraphs (1) through (4) of subsection (a) of its powers under any Act referred to in that subsection, a violation of any requirement imposed under this subchapter shall be deemed to be a violation of a requirement imposed under that Act. In addition to its powers under any provision of law specifically referred to in any of paragraphs (1) through (4) of subsection (a), each of the agencies referred to in that subsection may exercise, for the purpose of enforcing compliance with any requirement imposed under this subchapter, any other authority conferred on it by law.
(c) Overall enforcement authority of the Federal Trade Commission
Except to the extent that enforcement of the requirements imposed under this subchapter is specifically committed to some other Government agency under any of paragraphs (1) through (4) of subsection (a), and subject to subtitle B of the Consumer Financial Protection Act of 2010, the Federal Trade Commission shall be authorized to enforce such requirements. For the purpose of the exercise by the Federal Trade Commission of its functions and powers under the Federal Trade Commission Act [
(
Editorial Notes
References in Text
The Consumer Financial Protection Act of 2010, referred to in subsecs. (a) and (c), is title X of
Sections 25 and 25A of the Federal Reserve Act, referred to in subsec. (a)(1)(B), are classified to subchapters I (§601 et seq.) and II (§611 et seq.), respectively, of
The Federal Credit Union Act, referred to in subsec. (a)(2), is act June 26, 1934, ch. 750,
The Securities Exchange Act of 1934, referred to in subsec. (a)(4), is act June 6, 1934, ch. 404,
The Federal Trade Commission Act, referred to in subsec. (c), is act Sept. 26, 1914, ch. 311,
Codification
In subsec. (a)(3), "part A of subtitle VII of title 49" substituted for "the Federal Aviation Act of 1958 [49 App. U.S.C. 1301 et seq.]" and "that part" substituted for "that Act" on authority of
Prior Provisions
A prior section 918 of
Amendments
2010—Subsec. (a).
Subsec. (a)(1).
"(A) national banks, and Federal branches and Federal agencies of foreign banks, by the Office of the Comptroller of the Currency;
"(B) member banks of the Federal Reserve System (other than national banks), branches and agencies of foreign banks (other than Federal branches, Federal agencies, and insured State branches of foreign banks), commercial lending companies owned or controlled by foreign banks, and organizations operating under section 25 or 25(a) of the Federal Reserve Act, by the Board; and
"(C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System) and insured State branches of foreign banks, by the Board of Directors of the Federal Deposit Insurance Corporation;".
Subsec. (a)(2) to (5).
Subsec. (b).
Subsec. (c).
1996—Subsec. (a)(4).
1991—Subsec. (a).
"(A) national banks, by the Comptroller of the Currency;
"(B) member banks of the Federal Reserve System (other than national banks), by the Board;
"(C) banks insured by the Federal Deposit Insurance Corporation (other than members of the Federal Reserve System), by the Board of Directors of the Federal Deposit Insurance Corporation;".
1989—Subsec. (a)(2).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by
Transfer of Functions
Functions vested in Administrator of National Credit Union Administration transferred and vested in National Credit Union Administration Board pursuant to
1 So in original. Probably should be "; and".
§1693o–1. Remittance transfers
(a) Disclosures required for remittance transfers
(1) In general
Each remittance transfer provider shall make disclosures as required under this section and in accordance with rules prescribed by the Bureau. Disclosures required under this section shall be in addition to any other disclosures applicable under this subchapter.
(2) Disclosures
Subject to rules prescribed by the Bureau, a remittance transfer provider shall provide, in writing and in a form that the sender may keep, to each sender requesting a remittance transfer, as applicable to the transaction—
(A) at the time at which the sender requests a remittance transfer to be initiated, and prior to the sender making any payment in connection with the remittance transfer, a disclosure describing—
(i) the amount of currency that will be received by the designated recipient, using the values of the currency into which the funds will be exchanged;
(ii) the amount of transfer and any other fees charged by the remittance transfer provider for the remittance transfer; and
(iii) any exchange rate to be used by the remittance transfer provider for the remittance transfer, to the nearest 1/100th of a point; and
(B) at the time at which the sender makes payment in connection with the remittance transfer—
(i) a receipt showing—
(I) the information described in subparagraph (A);
(II) the promised date of delivery to the designated recipient; and
(III) the name and either the telephone number or the address of the designated recipient, if either the telephone number or the address of the designated recipient is provided by the sender; and
(ii) a statement containing—
(I) information about the rights of the sender under this section regarding the resolution of errors; and
(II) appropriate contact information for—
(aa) the remittance transfer provider; and
(bb) the State agency that regulates the remittance transfer provider and the Bureau, including the toll-free telephone number established under
(3) Requirements relating to disclosures
With respect to each disclosure required to be provided under paragraph (2) a remittance transfer provider shall—
(A) provide an initial notice and receipt, as required by subparagraphs (A) and (B) of paragraph (2), and an error resolution statement, as required by subsection (d), that clearly and conspicuously describe the information required to be disclosed therein; and
(B) with respect to any transaction that a sender conducts electronically, comply with the Electronic Signatures in Global and National Commerce Act (
(4) Exception for disclosures of amount received
(A) In general
Subject to the rules prescribed by the Bureau, and except as provided under subparagraph (B), the disclosures required regarding the amount of currency that will be received by the designated recipient shall be deemed to be accurate, so long as the disclosures provide a reasonably accurate estimate of the foreign currency to be received. This paragraph shall apply only to a remittance transfer provider who is an insured depository institution, as defined in
(i) a remittance transfer is conducted through a demand deposit, savings deposit, or other asset account that the sender holds with such remittance transfer provider; and
(ii) at the time at which the sender requests the transaction, the remittance transfer provider is unable to know, for reasons beyond its control, the amount of currency that will be made available to the designated recipient.
(B) Deadline
The application of subparagraph (A) shall terminate 5 years after July 21, 2010, unless the Bureau determines that termination of such provision would negatively affect the ability of remittance transfer providers described in subparagraph (A) to send remittances to locations in foreign countries, in which case, the Bureau may, by rule, extend the application of subparagraph (A) to not longer than 10 years after July 21, 2010.
(5) Exemption authority
The Bureau may, by rule, permit a remittance transfer provider to satisfy the requirements of—
(A) paragraph (2)(A) orally, if the transaction is conducted entirely by telephone;
(B) paragraph (2)(B), in the case of a transaction conducted entirely by telephone, by mailing the disclosures required under such subparagraph to the sender, not later than 1 business day after the date on which the transaction is conducted, or by including such documents in the next periodic statement, if the telephone transaction is conducted through a demand deposit, savings deposit, or other asset account that the sender holds with the remittance transfer provider;
(C) subparagraphs (A) and (B) of paragraph (2) together in one written disclosure, but only to the extent that the information provided in accordance with paragraph (3)(A) is accurate at the time at which payment is made in connection with the subject remittance transfer; and
(D) paragraph (2)(A), without compliance with section 101(c) of the Electronic Signatures in Global Commerce Act [
(6) Storefront and Internet notices
(A) In general
(i) Prominent posting
Subject to subparagraph (B), the Bureau may prescribe rules to require a remittance transfer provider to prominently post, and timely update, a notice describing a model remittance transfer for one or more amounts, as the Bureau may determine, which notice shall show the amount of currency that will be received by the designated recipient, using the values of the currency into which the funds will be exchanged.
(ii) Onsite displays
The Bureau may require the notice prescribed under this subparagraph to be displayed in every physical storefront location owned or controlled by the remittance transfer provider.
(iii) Internet notices
Subject to paragraph (3), the Bureau shall prescribe rules to require a remittance transfer provider that provides remittance transfers via the Internet to provide a notice, comparable to a storefront notice described in this subparagraph, located on the home page or landing page (with respect to such remittance transfer services) owned or controlled by the remittance transfer provider.
(iv) Rulemaking authority
In prescribing rules under this subparagraph, the Bureau may impose standards or requirements regarding the provision of the storefront and Internet notices required under this subparagraph and the provision of the disclosures required under paragraphs (2) and (3).
(B) Study and analysis
Prior to proposing rules under subparagraph (A), the Bureau shall undertake appropriate studies and analyses, which shall be consistent with
(i) to compare prices for remittance transfers; and
(ii) to understand the types and amounts of any fees or costs imposed on remittance transfers.
(b) Foreign language disclosures
The disclosures required under this section shall be made in English and in each of the foreign languages principally used by the remittance transfer provider, or any of its agents, to advertise, solicit, or market, either orally or in writing, at that office.
(c) Regulations regarding transfers to certain nations
If the Bureau determines that a recipient nation does not legally allow, or the method by which transactions are made in the recipient country do not allow, a remittance transfer provider to know the amount of currency that will be received by the designated recipient, the Bureau may prescribe rules (not later than 18 months after July 21, 2010) addressing the issue, which rules shall include standards for a remittance transfer provider to provide—
(1) a receipt that is consistent with subsections (a) and (b); and
(2) a reasonably accurate estimate of the foreign currency to be received, based on the rate provided to the sender by the remittance transfer provider at the time at which the transaction was initiated by the sender.
(d) Remittance transfer errors
(1) Error resolution
(A) In general
If a remittance transfer provider receives oral or written notice from the sender within 180 days of the promised date of delivery that an error occurred with respect to a remittance transfer, including the amount of currency designated in subsection (a)(3)(A) that was to be sent to the designated recipient of the remittance transfer, using the values of the currency into which the funds should have been exchanged, but was not made available to the designated recipient in the foreign country, the remittance transfer provider shall resolve the error pursuant to this subsection and investigate the reason for the error.
(B) Remedies
Not later than 90 days after the date of receipt of a notice from the sender pursuant to subparagraph (A), the remittance transfer provider shall, as applicable to the error and as designated by the sender—
(i) refund to the sender the total amount of funds tendered by the sender in connection with the remittance transfer which was not properly transmitted;
(ii) make available to the designated recipient, without additional cost to the designated recipient or to the sender, the amount appropriate to resolve the error;
(iii) provide such other remedy, as determined appropriate by rule of the Bureau for the protection of senders; or
(iv) provide written notice to the sender that there was no error with an explanation responding to the specific complaint of the sender.
(2) Rules
The Bureau shall establish, by rule issued not later than 18 months after July 21, 2010, clear and appropriate standards for remittance transfer providers with respect to error resolution relating to remittance transfers, to protect senders from such errors. Standards prescribed under this paragraph shall include appropriate standards regarding record keeping, as required, including documentation—
(A) of the complaint of the sender;
(B) that the sender provides the remittance transfer provider with respect to the alleged error; and
(C) of the findings of the remittance transfer provider regarding the investigation of the alleged error that the sender brought to their attention.
(3) Cancellation and refund policy rules
Not later than 18 months after July 21, 2010, the Bureau shall issue final rules regarding appropriate remittance transfer cancellation and refund policies for consumers.
(e) Applicability of this subchapter
(1) In general
A remittance transfer that is not an electronic fund transfer, as defined in
(2) Rule of construction
Nothing in this section shall be construed—
(A) to affect the application to any transaction, to any remittance provider, or to any other person of any of the provisions of subchapter II of
(B) to cause any fund transfer that would not otherwise be treated as such under paragraph (1) to be treated as an electronic fund transfer, or as otherwise subject to this subchapter, for the purposes of any of the provisions referred to in subparagraph (A) or any regulations promulgated thereunder.
(f) Acts of agents
(1) In general
A remittance transfer provider shall be liable for any violation of this section by any agent, authorized delegate, or person affiliated with such provider, when such agent, authorized delegate, or affiliate acts for that remittance transfer provider.
(2) Obligations of remittance transfer providers
The Bureau shall prescribe rules to implement appropriate standards or conditions of, liability of a remittance transfer provider, including a provider who acts through an agent or authorized delegate. An agency charged with enforcing the requirements of this section, or rules prescribed by the Bureau under this section, may consider, in any action or other proceeding against a remittance transfer provider, the extent to which the provider had established and maintained policies or procedures for compliance, including policies, procedures, or other appropriate oversight measures designed to assure compliance by an agent or authorized delegate acting for such provider.
(g) Definitions
As used in this section—
(1) the term "designated recipient" means any person located in a foreign country and identified by the sender as the authorized recipient of a remittance transfer to be made by a remittance transfer provider, except that a designated recipient shall not be deemed to be a consumer for purposes of this chapter;
(2) the term "remittance transfer"—
(A) means the electronic (as defined in section 106(2) of the Electronic Signatures in Global and National Commerce Act (
(B) does not include a transfer described in subparagraph (A) in an amount that is equal to or lesser than the amount of a small-value transaction determined, by rule, to be excluded from the requirements under
(3) the term "remittance transfer provider" means any person or financial institution that provides remittance transfers for a consumer in the normal course of its business, whether or not the consumer holds an account with such person or financial institution; and
(4) the term "sender" means a consumer who requests a remittance provider to send a remittance transfer for the consumer to a designated recipient.
(
Editorial Notes
References in Text
The Electronic Signatures in Global and National Commerce Act, referred to in subsec. (a)(3)(B), is
Prior Provisions
A prior section 919 of
Another prior section 919 of
Amendments
2010—
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by section 1084(1) of
Effective Date
Section effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of
§1693o–2. Reasonable fees and rules for payment card transactions
(a) Reasonable interchange transaction fees for electronic debit transactions
(1) Regulatory authority over interchange transaction fees
The Board may prescribe regulations, pursuant to
(2) Reasonable interchange transaction fees
The amount of any interchange transaction fee that an issuer may receive or charge with respect to an electronic debit transaction shall be reasonable and proportional to the cost incurred by the issuer with respect to the transaction.
(3) Rulemaking required
(A) In general
The Board shall prescribe regulations in final form not later than 9 months after July 21, 2010, to establish standards for assessing whether the amount of any interchange transaction fee described in paragraph (2) is reasonable and proportional to the cost incurred by the issuer with respect to the transaction.
(B) Information collection
The Board may require any issuer (or agent of an issuer) or payment card network to provide the Board with such information as may be necessary to carry out the provisions of this subsection and the Board, in issuing rules under subparagraph (A) and on at least a bi-annual basis thereafter, shall disclose such aggregate or summary information concerning the costs incurred, and interchange transaction fees charged or received, by issuers or payment card networks in connection with the authorization, clearance or settlement of electronic debit transactions as the Board considers appropriate and in the public interest.
(4) Considerations; consultation
In prescribing regulations under paragraph (3)(A), the Board shall—
(A) consider the functional similarity between—
(i) electronic debit transactions; and
(ii) checking transactions that are required within the Federal Reserve bank system to clear at par;
(B) distinguish between—
(i) the incremental cost incurred by an issuer for the role of the issuer in the authorization, clearance, or settlement of a particular electronic debit transaction, which cost shall be considered under paragraph (2); and
(ii) other costs incurred by an issuer which are not specific to a particular electronic debit transaction, which costs shall not be considered under paragraph (2); and
(C) consult, as appropriate, with the Comptroller of the Currency, the Board of Directors of the Federal Deposit Insurance Corporation, the Director of the Office of Thrift Supervision, the National Credit Union Administration Board, the Administrator of the Small Business Administration, and the Director of the Bureau of Consumer Financial Protection.
(5) Adjustments to interchange transaction fees for fraud prevention costs
(A) Adjustments
The Board may allow for an adjustment to the fee amount received or charged by an issuer under paragraph (2), if—
(i) such adjustment is reasonably necessary to make allowance for costs incurred by the issuer in preventing fraud in relation to electronic debit transactions involving that issuer; and
(ii) the issuer complies with the fraud-related standards established by the Board under subparagraph (B), which standards shall—
(I) be designed to ensure that any fraud-related adjustment of the issuer is limited to the amount described in clause (i) and takes into account any fraud-related reimbursements (including amounts from charge-backs) received from consumers, merchants, or payment card networks in relation to electronic debit transactions involving the issuer; and
(II) require issuers to take effective steps to reduce the occurrence of, and costs from, fraud in relation to electronic debit transactions, including through the development and implementation of cost-effective fraud prevention technology.
(B) Rulemaking required
(i) In general
The Board shall prescribe regulations in final form not later than 9 months after July 21, 2010, to establish standards for making adjustments under this paragraph.
(ii) Factors for consideration
In issuing the standards and prescribing regulations under this paragraph, the Board shall consider—
(I) the nature, type, and occurrence of fraud in electronic debit transactions;
(II) the extent to which the occurrence of fraud depends on whether authorization in an electronic debit transaction is based on signature, PIN, or other means;
(III) the available and economical means by which fraud on electronic debit transactions may be reduced;
(IV) the fraud prevention and data security costs expended by each party involved in electronic debit transactions (including consumers, persons who accept debit cards as a form of payment, financial institutions, retailers and payment card networks);
(V) the costs of fraudulent transactions absorbed by each party involved in such transactions (including consumers, persons who accept debit cards as a form of payment, financial institutions, retailers and payment card networks);
(VI) the extent to which interchange transaction fees have in the past reduced or increased incentives for parties involved in electronic debit transactions to reduce fraud on such transactions; and
(VII) such other factors as the Board considers appropriate.
(6) Exemption for small issuers
(A) In general
This subsection shall not apply to any issuer that, together with its affiliates, has assets of less than $10,000,000,000, and the Board shall exempt such issuers from regulations prescribed under paragraph (3)(A).
(B) Definition
For purposes of this paragraph, the term "issuer" shall be limited to the person holding the asset account that is debited through an electronic debit transaction.
(7) Exemption for government-administered payment programs and reloadable prepaid cards
(A) In general
This subsection shall not apply to an interchange transaction fee charged or received with respect to an electronic debit transaction in which a person uses—
(i) a debit card or general-use prepaid card that has been provided to a person pursuant to a Federal, State or local government-administered payment program, in which the person may only use the debit card or general-use prepaid card to transfer or debit funds, monetary value, or other assets that have been provided pursuant to such program; or
(ii) a plastic card, payment code, or device that is—
(I) linked to funds, monetary value, or assets which are purchased or loaded on a prepaid basis;
(II) not issued or approved for use to access or debit any account held by or for the benefit of the card holder (other than a subaccount or other method of recording or tracking funds purchased or loaded on the card on a prepaid basis);
(III) redeemable at multiple, unaffiliated merchants or service providers, or automated teller machines;
(IV) used to transfer or debit funds, monetary value, or other assets; and
(V) reloadable and not marketed or labeled as a gift card or gift certificate.
(B) Exception
Notwithstanding subparagraph (A), after the end of the 1-year period beginning on the effective date provided in paragraph (9), this subsection shall apply to an interchange transaction fee charged or received with respect to an electronic debit transaction described in subparagraph (A)(i) in which a person uses a general-use prepaid card, or an electronic debit transaction described in subparagraph (A)(ii), if any of the following fees may be charged to a person with respect to the card:
(i) A fee for an overdraft, including a shortage of funds or a transaction processed for an amount exceeding the account balance.
(ii) A fee imposed by the issuer for the first withdrawal per month from an automated teller machine that is part of the issuer's designated automated teller machine network.
(C) Definition
For purposes of subparagraph (B), the term "designated automated teller machine network" means either—
(i) all automated teller machines identified in the name of the issuer; or
(ii) any network of automated teller machines identified by the issuer that provides reasonable and convenient access to the issuer's customers.
(D) Reporting
Beginning 12 months after July 21, 2010, the Board shall annually provide a report to the Congress regarding —
(i) the prevalence of the use of general-use prepaid cards in Federal, State or local government-administered payment programs; and
(ii) the interchange transaction fees and cardholder fees charged with respect to the use of such general-use prepaid cards.
(8) Regulatory authority over network fees
(A) In general
The Board may prescribe regulations, pursuant to
(B) Limitation
The authority under subparagraph (A) to prescribe regulations shall be limited to regulations to ensure that—
(i) a network fee is not used to directly or indirectly compensate an issuer with respect to an electronic debit transaction; and
(ii) a network fee is not used to circumvent or evade the restrictions of this subsection and regulations prescribed under such subsection.
(C) Rulemaking required
The Board shall prescribe regulations in final form before the end of the 9-month period beginning on July 21, 2010, to carry out the authorities provided under subparagraph (A).
(9) Effective date
This subsection shall take effect at the end of the 12-month period beginning on July 21, 2010.
(b) Limitation on payment card network restrictions
(1) Prohibitions against exclusivity arrangements
(A) No exclusive network
The Board shall, before the end of the 1-year period beginning on July 21, 2010, prescribe regulations providing that an issuer or payment card network shall not directly or through any agent, processor, or licensed member of a payment card network, by contract, requirement, condition, penalty, or otherwise, restrict the number of payment card networks on which an electronic debit transaction may be processed to—
(i) 1 such network; or
(ii) 2 or more such networks which are owned, controlled, or otherwise operated by —
(I) affiliated persons; or
(II) networks affiliated with such issuer.
(B) No routing restrictions
The Board shall, before the end of the 1-year period beginning on July 21, 2010, prescribe regulations providing that an issuer or payment card network shall not, directly or through any agent, processor, or licensed member of the network, by contract, requirement, condition, penalty, or otherwise, inhibit the ability of any person who accepts debit cards for payments to direct the routing of electronic debit transactions for processing over any payment card network that may process such transactions.
(2) Limitation on restrictions on offering discounts for use of a form of payment
(A) In general
A payment card network shall not, directly or through any agent, processor, or licensed member of the network, by contract, requirement, condition, penalty, or otherwise, inhibit the ability of any person to provide a discount or in-kind incentive for payment by the use of cash, checks, debit cards, or credit cards to the extent that—
(i) in the case of a discount or in-kind incentive for payment by the use of debit cards, the discount or in-kind incentive does not differentiate on the basis of the issuer or the payment card network;
(ii) in the case of a discount or in-kind incentive for payment by the use of credit cards, the discount or in-kind incentive does not differentiate on the basis of the issuer or the payment card network; and
(iii) to the extent required by Federal law and applicable State law, such discount or in-kind incentive is offered to all prospective buyers and disclosed clearly and conspicuously.
(B) Lawful discounts
For purposes of this paragraph, the network may not penalize any person for the providing of a discount that is in compliance with Federal law and applicable State law.
(3) Limitation on restrictions on setting transaction minimums or maximums
(A) In general
A payment card network shall not, directly or through any agent, processor, or licensed member of the network, by contract, requirement, condition, penalty, or otherwise, inhibit the ability—
(i) of any person to set a minimum dollar value for the acceptance by that person of credit cards, to the extent that—
(I) such minimum dollar value does not differentiate between issuers or between payment card networks; and
(II) such minimum dollar value does not exceed $10.00; or
(ii) of any Federal agency or institution of higher education to set a maximum dollar value for the acceptance by that Federal agency or institution of higher education of credit cards, to the extent that such maximum dollar value does not differentiate between issuers or between payment card networks.
(B) Increase in minimum dollar amount
The Board may, by regulation prescribed pursuant to
(4) Rule of construction
No provision of this subsection shall be construed to authorize any person—
(A) to discriminate between debit cards within a payment card network on the basis of the issuer that issued the debit card; or
(B) to discriminate between credit cards within a payment card network on the basis of the issuer that issued the credit card.
(c) Definitions
For purposes of this section, the following definitions shall apply:
(1) Affiliate
The term "affiliate" means any company that controls, is controlled by, or is under common control with another company.
(2) Debit card
The term "debit card"—
(A) means any card, or other payment code or device, issued or approved for use through a payment card network to debit an asset account (regardless of the purpose for which the account is established), whether authorization is based on signature, PIN, or other means;
(B) includes a general-use prepaid card, as that term is defined in
(C) does not include paper checks.
(3) Credit card
The term "credit card" has the same meaning as in
(4) Discount
The term "discount"—
(A) means a reduction made from the price that customers are informed is the regular price; and
(B) does not include any means of increasing the price that customers are informed is the regular price.
(5) Electronic debit transaction
The term "electronic debit transaction" means a transaction in which a person uses a debit card.
(6) Federal agency
The term "Federal agency" means—
(A) an agency (as defined in
(B) a Government corporation (as defined in
(7) Institution of higher education
The term "institution of higher education" has the same meaning as in 1001 1 and 1002 of title 20.
(8) Interchange transaction fee
The term "interchange transaction fee" means any fee established, charged or received by a payment card network for the purpose of compensating an issuer for its involvement in an electronic debit transaction.
(9) Issuer
The term "issuer" means any person who issues a debit card, or credit card, or the agent of such person with respect to such card.
(10) Network fee
The term "network fee" means any fee charged and received by a payment card network with respect to an electronic debit transaction, other than an interchange transaction fee.
(11) Payment card network
The term "payment card network" means an entity that directly, or through licensed members, processors, or agents, provides the proprietary services, infrastructure, and software that route information and data to conduct debit card or credit card transaction authorization, clearance, and settlement, and that a person uses in order to accept as a form of payment a brand of debit card, credit card or other device that may be used to carry out debit or credit transactions.
(d) Enforcement
(1) In general
Compliance with the requirements imposed under this section shall be enforced under
(2) Exception
(
Editorial Notes
Prior Provisions
A prior section 920 of
Two other prior sections 920 of
Statutory Notes and Related Subsidiaries
Effective Date
Section effective 1 day after July 21, 2010, except as otherwise provided, see section 4 of
1 So in original. Probably should be preceded by "sections".
§1693p. Reports to Congress
(a) Not later than twelve months after the effective date of this subchapter and at one-year intervals thereafter, the Bureau shall make reports to the Congress concerning the administration of its functions under this subchapter, including such recommendations as the Bureau deems necessary and appropriate. In addition, each report of the Bureau shall include its assessment of the extent to which compliance with this subchapter is being achieved, and a summary of the enforcement actions taken under section 1693o 1 of this title. In such report, the Bureau shall particularly address the effects of this subchapter on the costs and benefits to financial institutions and consumers, on competition, on the introduction of new technology, on the operations of financial institutions, and on the adequacy of consumer protection.
(b) In the exercise of its functions under this subchapter, the Bureau may obtain upon request the views of any other Federal agency which, in the judgment of the Bureau, exercises regulatory or supervisory functions with respect to any class of persons subject to this subchapter.
(
Editorial Notes
References in Text
For effective date of this subchapter, referred to in subsec. (a), see section 921 of
Codification
Renumbering of section 918 of
Prior Provisions
Two prior sections 921 of
Another prior section 921 of
Amendments
2010—
1982—Subsec. (a).
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by section 1084(1) of
1 See References in Text note below.
§1693q. Relation to State laws
This subchapter does not annul, alter, or affect the laws of any State relating to electronic fund transfers, dormancy fees, inactivity charges or fees, service fees, or expiration dates of gift certificates, store gift cards, or general-use prepaid cards, except to the extent that those laws are inconsistent with the provisions of this subchapter, and then only to the extent of the inconsistency. A State law is not inconsistent with this subchapter if the protection such law affords any consumer is greater than the protection afforded by this subchapter. The Bureau shall, upon its own motion or upon the request of any financial institution, State, or other interested party, submitted in accordance with procedures prescribed in regulations of the Bureau, determine whether a State requirement is inconsistent or affords greater protection. If the Bureau determines that a State requirement is inconsistent, financial institutions shall incur no liability under the law of that State for a good faith failure to comply with that law, notwithstanding that such determination is subsequently amended, rescinded, or determined by judicial or other authority to be invalid for any reason. This subchapter does not extend the applicability of any such law to any class of persons or transactions to which it would not otherwise apply.
(
Editorial Notes
Codification
Another section 922 of
Renumbering of section 919 of
Prior Provisions
A prior section 922 of
Amendments
2010—
2009—
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by section 1084(1) of
Effective Date of 2009 Amendment
Amendment by
§1693r. Exemption for State regulation
The Bureau shall by regulation exempt from the requirements of this subchapter any class of electronic fund transfers within any State if the Bureau determines that under the law of that State that class of electronic fund transfers is subject to requirements substantially similar to those imposed by this subchapter, and that there is adequate provision for enforcement.
(
Editorial Notes
Codification
Another section 922 of
Renumbering of section 920 of
Prior Provisions
A prior section 922 of
Amendments
2010—
Statutory Notes and Related Subsidiaries
Effective Date of 2010 Amendment
Amendment by section 1084(1) of