Periodic Statements

When you have to send a periodic statement and when you do not

You have to send a periodic statement every monthly cycle in which an EFT occurs. [12 CFR 1005.9(b)] The cycle can vary by as much as four days from the regular day or date of the periodic statement and still be considered a regular cycle. [Commentary, 12 CFR 1005.9(b)-1] Even if no EFT occurs during a cycle, you have to send the statement at least quarterly. [12 CFR 1005.9(b)] You can allow your customers to come in and pick up their periodic statements, but you are not allowed to require them to do so.

[Commentary, 12 CFR 1005.9(b)-4]

If the account is a passbook account and the only sort of EFT that the consumer can make with respect to the account is preauthorized transfers into the account (direct deposits), then you do not have to send periodic statements if you update the passbook when the consumer presents it with the amount and date of each EFT since the last update. You can also put this information on a separate form when the passbook is presented rather than putting it in the passbook. [12 CFR 1005.9(c)(1)(i)] The exemption in this paragraph applies if the only sort of EFT the consumer can make is a direct deposit. Other means of accessing the account—non-EFTs—may be available without losing the exemption. But, if any other type of EFT is available—such as ATM transactions—the exemption does not apply. [Commentary, 12 CFR 1005.9(c)-1]

If the account is not a passbook account and the only sort of EFT that the consumer can make with respect to the account is direct deposits, then you only have to send the statement quarterly (rather than monthly), regardless how frequently the transfers occur. [12 CFR 1005.9(c)(1)(ii)] As with the exemption in the previous paragraph, the exemption in this paragraph applies if the only sort of EFT the consumer can make is a direct deposit. Other means of accessing the account—non-EFTs—may be available without losing the exemption. But if any other type of EFT is available—such as ATM transactions—the exemption does not apply. [Commentary, 12 CFR 1005.9(c)(1)-1] Reversing an erroneous direct deposit does not trigger the monthly statement requirement if the error was making the deposit in the wrong account, duplicating the deposit, or depositing the wrong amount. [Commentary, 12 CFR 1005.9(c)(1)-2]

You are not required to send periodic statements in connection with a “payroll card account.” As we said at the beginning of this chapter, a payroll card account is one into which an employee’s wages or salary are transferred by EFT, and the employee is provided a card with a magnetic stripe that the employee can use to access the account. The employee can use the card at ATMs, for point-of-sale transactions, etc. But if you choose not to send a periodic statement, you must make available the following to the consumer:
  • The consumer’s account balance, through a readily available telephone line;
  • An electronic history, such as through an Internet Web site, of the consumer’s account transactions that covers at least 60 days preceding the date the consumer electronically accesses the account;
  • A written history of the consumer’s account transactions that is provided promptly in response to an oral or written request and that covers at least 60 days preceding the date of receipt of a request by the consumer; and

You must also include some additional information in your initial Regulation E disclosure in order to avoid sending a periodic statement on a payroll card account. We discuss those additional requirements in the Regulation E chapter in the first part of this manual, Regulation E Account Opening Responsibilities. You are also required to provide a special billing error disclosure and apply some special rules when there is a billing error claim or an unauthorized funds transfer. We discuss these requirements in other places in this chapter—the sections dealing with annual or periodic billing error notices and the procedures to follow when there’s a billing error or unauthorized funds transfer. All of this is to avoid having to provide a periodic statement to a consumer with a payroll card account. [12 CFR 1005.18(b)(1)]

Finally, if your consumer has two accounts with you and you send periodic statements for both, only one of the statements needs to include any EFTs from one account to the other. [12 CFR 1005.9(c)(2)] This eliminates having to send two statements to a consumer and repeating information.

The content of the periodic statement

The periodic statement, generally, must contain the following six disclosures:
  1. A description of each EFT [12 CFR 1005.9(b)(1)];
  2. The consumer’s account number for which the statement is issued [12 CFR 1005.9(b)(2)];
  3. The amount of fees or charges (other than an open-end credit finance charge) that are assessed for the statement period for EFTs, the right to make EFTs, or for account maintenance [12 CFR 1005.9(b)(3)];
  4. The beginning and closing account balances for the statement period [12 CFR 1005.9(b)(4)];
  5. The address and telephone number for the consumer to use to make billing inquiries or give notice of billing errors [12 CFR 1005.9(b)(5)]; and
  6. A telephone number for the consumer to use to call and find out whether a direct deposit has been made. [12 CFR 1005.9(b)(6)] (If you have opted to send a notice when each deposit is made or when a scheduled deposit is not made, your periodic statement does not need to include this telephone number. We will review these options under the next subtopic “Preauthorized transfers to a consumer’s account [direct deposits].”)

1. A description of each EFT. You have to disclose the amount of each transfer (which, for terminal transfers, can include a transfer charge if you properly included one on your terminal receipt—see the receipt requirements above); the date the transfer was credited or debited to the consumer’s account; the type of transfer (preauthorized withdrawal, payment, or transfer between accounts); the type of account(s) (savings or checking) to or from which the transfer was made; and the name of any third party to or from whom the funds were transferred. [12 CFR 1005.9(b)(1)(i)-(v)] For transfers initiated at an electronic terminal, you also have to state the location of the terminal at which the transfer was initiated. [12 CFR 1005.9(b)(1)(iv)] You can do this in the same way you did on the terminal receipt. See our description in the previous section for details. (You need not state the location if the transaction is a deposit of cash or a check, draft, or similar paper instrument).

Since there are no format requirements, the “description of EFTs” requirement could be met by enclosing transaction receipts, or deposit slips, so long as all the required information ends up being disclosed.

2. The consumer’s account number for which the statement is issued. [12 CFR 1005.9(b)(2)] This requirement is self-explanatory. The only thing we have to add is that if your statement is applicable to more than one account, you should list all the account numbers.

3. The amount of fees or charges (other than an open-end credit finance charge) you assess for the statement period for EFTs, the right to make EFTs, or account maintenance. [12 CFR 1005.9(b)(3)] The maintenance charges include charges related to EFTs and those that are not. [Commentary, 12 CFR 1005.9(b)(3)-1]

4. The beginning and closing account balances for the statement period. [12 CFR 1005.9(b)(4)] These balances must take into account both electronic and nonelectronic activity for the consumer’s account. You cannot base them solely on electronic activity. [Commentary, 12 CFR 1005.9(b)(4)-1]

5. The address and telephone number for the consumer to use to make billing inquiries or give notice of billing errors. [12 CFR 1005.9(b)(5)] If, along with your periodic statement, you send a summary of the procedures and the consumer’s rights in the event of a billing error, and that summary contains this address and telephone number, then you do not have to separately include these items on your statement. [12 CFR 1005.9(b)(5)] We will describe your obligation to periodically send the consumer this summary of billing‑error rights and procedures. See below under “Annual or periodic error notices.”

6. A telephone number for the consumer to use to call and find out whether a direct deposit has been made (unless you have opted to send notice when each deposit is made or when a scheduled deposit is not made). [12 CFR 1005.9(b)(6)] As we will see later on, Regulation E gives the consumer the right to find out whether or not scheduled preauthorized transfers into his or her account have been made. One of the options available to you is to require that the consumer call you for this information. Or you can choose to send the consumer a notice when the transfer occurs or send the consumer a notice when the transfer does not occur as scheduled. If you choose the telephone number option, the number must be on the periodic statement.

Format requirements

Regulation E does not have any format requirements for the periodic statement—other than that the disclosures must be clear and readily understandable, in writing, and in a form the consumer may keep. [12 CFR 1005.4(a)] This means the required information could appear on more than one page or could be included in documents accompanying the statement. For details on the electronic communication of the periodic statement or other Regulation E information, see the earlier section in this chapter under the heading “Special rules for electronic disclosures.”

Timing requirements

Regulation E does not have strict time limits on when you must send the periodic statement. It says merely that you must send a periodic statement “for each monthly cycle in which an electronic funds transfer has occurred; and…at least quarterly if no transfer has occurred.” [12 CFR 1005.9(b)] Presumably, you should send your statement within a reasonable period following the close of the cycle to which the statement relates. If your periodic statement is in electronic form, remember that for deciding whether any disclosure is timely under Regulation E, a disclosure sent by e-mail is effective when sent. A disclosure made by posting on a location or web site is effective when the notice of the disclosure’s availability is sent or when the disclosure is actually available, whichever is later. [12 CFR 1005.17(b)-4]

Error Resolution and Limitations on Liability for PrePaid Accounts

Error Resolution and Limitations on Liability for PrePaid Accounts

Note: There are special rules for prepaid accounts. Prepaid accounts must follow Regulation E’s limited liability and error resolution requirements, but the Prepaid Rule does not require provisional credit for unverified accounts. Once a prepaid account has been verified, the financial institution generally may take longer than ten days to investigate and determine whether an error occurred only if it provisionally credits the consumer’s account in the amount of the alleged error, minus a maximum of $50.