The Initial Disclosure

When Do You Have to Give the Initial Disclosure?

Regulation E requires that you give the initial disclosure either at the time the consumer contracts for the EFT service or before the first transfer under the service. [12 CFR 1005.7(a)] So, for example, if a consumer signs up to receive an ATM card or to receive direct deposits of social security payments at the time of account opening, you could give the disclosure at that time. Or, you could delay giving the disclosure until any time prior to the first transfer, but in many cases it will be easier for you to deliver the disclosure to the customer at account opening when he or she is in the office. Some institutions arrange to have disclosures that are applicable to ATM cards delivered with the card, sometime after account opening. This satisfies the requirement, since it results in the consumer receiving the disclosures before the first transfer.

Note: There are special rules for prepaid accounts. We will address those rules in a separate section later.

What if the consumer does not sign up for an EFT service at the time of account opening? Obviously, you are under no obligation to provide any disclosure at that time. But if you do, are you excused from giving a disclosure later on if the consumer signs up for a service sometime later? The answer is “yes” in some circumstances and “no” in others.

If the service for which the consumer ends up contracting is an agreement with a third party for preauthorized withdrawals or direct deposits initiated by the third party, then you do not need to repeat any disclosures you have previously given, regardless of how much time has passed since you gave them. [Commentary, §1005.7(a)-1] (However, if any of the disclosures you give relating to these types of EFT services have changed since you first gave the disclosures, you would be required to disclose the changed items at the time of contracting for the service or before the first transfer.) On the other hand, if the service for which the consumer is contracting constitutes an agreement directly between you and the consumer—say for an ATM card or a telephone bill-payment plan—then you are subject to the usual timing requirement that the disclosure be given at the time of contracting for the service or before the first transfer. According to the Commentary to Regulation E, disclosures for these types of services “must be given in close proximity to the event requiring disclosure, for example, when the consumer contracts for a new service.” [Commentary, Section 1005.7(a)-1]

These timing rules make it possible for you to give consumer account holders an initial disclosure relating to preauthorized transfers at the time of account opening, and assuming those disclosures do not change, satisfy any disclosure requirement that might arise later on if the consumer signs up for such a service. This could be helpful in a couple of instances. First, when a consumer signs up for a preauthorized withdrawal—for example, to pay an insurance premium—he or she will usually do so without any direct, in-person contact with you, meaning that when you learn of the authorization you would have to be sure to get the disclosure to the consumer before the first transfer takes place. But, if you gave the disclosure at account opening, you don’t have that concern. Second, it is possible for some government payment direct deposit arrangements to be set up without the consumer and you filling out a direct deposit sign-up form (Standard Form (SF)-1199A, the standard direct deposit authorization form is meant for all employees of the federal government including the military (Army, Navy, Air Force, Marines, etc.) as well as beneficiaries under government needs programs.). Your first notice of the arrangement in such a case is the arrival of the payment. The Commentary says that if you have no advance notice of an EFT, you must provide the disclosure as soon as reasonably possible after the first direct deposit. [Commentary, Section 1005.7(a)-2]

This rule is helpful when you receive a direct deposit with no advance notice, but it also may be helpful when you receive no advance notice of an “e-check” transaction, a “WEB code transaction,” or a “TEL code transaction.” [See our description of these types of transactions earlier in this chapter in the section titled “General Coverage of Regulation E.”]

But again, if you have given the disclosure at account opening and there have been no changes in the disclosures in the meantime, you will have already satisfied the requirement and won’t have to send any disclosure at the time of the transfer.

What if the consumer signs up for an EFT service on-line? The timing rule is the same: provide the disclosures either at the time the consumer signs up or before the first EFT under the new service takes place. If the consumer is able to immediately make the first EFT, then the institution must somehow get the disclosures to the consumer before that first transfer. The Commentary states that the disclosures must either automatically appear on the screen before the consumer can make the first transfer, or provide a link to the disclosures, as long as the consumer must follow the link before making the transfer. [Commentary, Section 1005.17(b)-3]

If the institution is providing disclosures electronically, it must either e-mail them to the consumer or make the disclosures available on a web site along with an e-mail or postal notice of the disclosures’ availability. [12 CFR 1005.17(c)(1) and (2)] If the institution uses the e-mail option, then these timing requirements are met based on when the e-mail is sent. [Commentary, Section 1005.17(b)-3] If the institution uses the “available at a web site” option, the disclosures are timely based on when the notice is sent or the disclosures are available on the web site, whichever is later. [Commentary, Section 1005.17(b)-4]

For more details on providing Regulation E disclosures electronically, see our later section entitled “Special rules for electronic disclosures” under “In what form must the initial disclosure be?”

To Whom do You Have to Give the Initial Disclosure?

Obviously, the consumer is the one to whom you give the disclosure. But, if more than one consumer holds the account, you only need to give the disclosure to one of the consumers. [12 CFR 1005.4(b)(2)] Also, if the EFTs for which the consumer is contracting will be made to and from more than one account—for example, if a single cash card can be used for deposits and withdrawals from several accounts—then all the disclosures can be combined into a single statement. [12 CFR 1005.4(b)(1)]

Who Must Give the Initial Disclosure?

Generally, the financial institution that holds the consumer’s account must give the disclosure. [12 CFR 1005.2(i) and 1005.7(a)] However, the Regulation has a special rule that applies when one financial institution issues an access device to a consumer and the access device can be used to make EFTs to or from the consumer’s account at another financial institution. If the two financial institutions do not have an agreement regarding the EFT service, then the “service provider,” the institution that issued the access device, must supply the initial disclosure. [12 CFR 1005.14(a)(2)] Otherwise, the account-holding institution must give the disclosure. If the “service provider” gives the disclosure, the disclosure must be based on facts within the service provider’s knowledge and within the purview of its relationship with the consumer. [12 CFR 1005.14(a)(2)] In order for an agreement to exist between the two institutions, there must be a specific agreement setting forth the rights and obligations of the institutions regarding the EFT service for which the access device was issued. The fact that the institutions participate in a clearinghouse arrangement for clearing funds and agree to be bound by the rules of the arrangement does not mean, by itself, that the institutions have an agreement for purposes of this rule. [12 CFR 1005.14(c)]

This special rule also clarifies which institution must meet the other obligations of Regulation E, such as the documentation requirements, the error resolution procedures, and so forth. We go over those provisions in our Regulation E chapter in Part II of this manual.

Remember that the special rule only applies where an access device is issued. Other types of EFTs between institutions (e.g., preauthorized transfers) do not trigger the application of the special rule. And when the special rule does not apply, the institution holding the consumer’s account must make the initial disclosure. [12 CFR 1005.2(i) and 1005.7(a)]

In What Form Must the Initial Disclosure Be?

General Requirements

The initial disclosure must be in writing, in a form that the consumer can keep, and must be clear and readily understandable. [12 CFR 1005.4(a)] There are no requirements for type size, segregation from other material, number of pages, or relative conspicuousness of terms disclosed. You can, therefore, combine the disclosures with other account-opening material, have inserts with your disclosures, or arrange the disclosures in any other format you want, so long as the disclosures remain clear and readily understandable and in a form the consumer can keep. [12 CFR 1005.4(b)]

Special rules for electronic disclosures

Since March of 1998, Regulation E has allowed institutions to make disclosures by electronic communication, if the consumer agreed. [See the Federal Register for March 25, 1998, beginning at page 14527.] In June of 2000, President Clinton signed the Electronic Signatures in Global and National Commerce Act (the E-SIGN Act). [15 U.S.C. 7001 et seq.] The E-SIGN Act provided that signatures, contracts, and other records could not be denied validity solely because they are in electronic form. The E-SIGN Act also provided that laws or regulations requiring written disclosures could be satisfied by electronic disclosures if the consumer affirmatively consents. In April 2001, the Federal Reserve Board (FRB) published revisions to Regulation E to take into account the provisions of the E-SIGN Act. [See the Federal Register for April 4, 2001, beginning at page 17786.] The April 2001 revisions were effective March 30, 2001.

Let’s look first at the statutory provisions, then at the Regulation E provisions.

The E-SIGN Act authorizes a person who must provide consumer disclosures in writing to provide the disclosures by electronic communication. [15 USC 7001(c)] This authority is subject to conditions, however. The conditions, all of which must be met, are:
  • The consumer has affirmatively consented to the use of electronic communication and has not withdrawn that consent. Affirmative consent means the consumer communicates “yes.” It does not include what you might call passive or presumed consent, where a consumer consents by not objecting.
  • The person providing the disclosures has, before the consumer consents, given the consumer a clear and conspicuous statement of the following:
    • Any right the consumer has to have the disclosure delivered in paper or nonelectronic form, as well as the consumer’s right to withdraw consent to the electronic delivery of the disclosure, and any conditions on, or fees or other consequences of, withdrawing consent.
    • Whether the consumer’s consent applies only to a specific transaction or to categories of records and which categories those are.
    • How the consumer can withdraw consent and how the consumer can update information the institution needs to contact the consumer electronically.
    • How the consumer, at any point after consent, can obtain a paper copy of any disclosure and any fees that might be charged for the paper copy.
  • The institution provides—before the consumer consents—a statement of the hardware and software requirements that enable the consumer to obtain and retain electronic disclosures.
  • The consumer either consents electronically, or confirms his consent electronically, in such a way that shows the consumer will be able to obtain disclosures in electronic form.
  • If the institution changes the software or hardware requirements that the consumer must meet to access and retain the disclosures, the institution provides a statement of the new requirements and of the consumer’s right to withdraw consent without fees, conditions, or consequences that were not disclosed previously. The consumer must also either consent electronically, or confirm the consent electronically, in such a way that demonstrates the ability to obtain disclosures in electronic form.

    [15 USC 7001(c)(1)]

More rules: If the consumer withdraws consent, the institution must treat the withdrawal as effective within a reasonable period of time after receiving the withdrawal. [15 USC 7001(c)(4)] Neither oral communications nor recordings of oral communications are considered electronic messages for purposes of the E-SIGN Act. [15 USC 7001(c)(6)]

See our earlier section entitled “When do you have to give the initial disclosure?” for timing rules that apply to electronic disclosures.

What Must the Initial Disclosure Contain?

Following are the required elements of the initial disclosure. You need to include individual elements in your disclosure only if they are applicable to the EFT service for which the consumer has contracted. [12 CFR 1005.7(b)]

  1. The disclosure must contain a summary of the consumer’s liability for unauthorized EFTs, and at your option, a statement of the advisability of promptly reporting loss or theft of the access device or unauthorized transfers. [12 CFR 1005.7(b)(1) and Commentary, Section 1005.7(b)(1)-3] Regulation E has detailed rules for determining the extent to which a consumer will be liable for unauthorized EFTs from his or her account, and we go over those rules in detail in the Regulation E chapter in Part II of this manual. For initial disclosure purposes, however, you only need language summarizing the rules. Appendix A to the Regulation, and Section A-2(a) in particular, provides model language that you would normally use for this disclosure. You may, however, have to deviate from the model language if your state law or your agreement with the consumer is more protective of the consumer than Regulation E. See the Regulation E chapter in the second part of this manual (Ongoing Responsibilities) for a summary of individual state laws affecting electronic funds transfers. Your agreement with the consumer may be more protective of the consumer either because that is your normal policy or because a third-party debit card company whose cards you issue requires the more protective rule.
  2. The disclosure must contain the telephone number and address of the person or office the consumer should contact to notify you of an unauthorized EFT that has occurred or may occur. [12 CFR 1005.7(b)(2)] Again, model language is available for this disclosure [Appendix A, Section A-2(b)], and you should use it. The model language indicates that you need more than just a telephone number and address. You also need an explanation that the number and address should be used to notify you of unauthorized EFTs.
  3. The disclosure must contain a statement of your business days. [12 CFR 1005.7(b)(3)] Be careful here—Regulation E has its own definition of the term “business day,” and it is different from the definition of that term in other regulations, most notably Regulation CC, the funds availability regulation. Regulation E defines a business day as any day on which your offices are open to the public for carrying on substantially all business functions. [12 CFR 1005.2(d)] This definition includes Saturdays, Sundays, and legal holidays—if you are open to the public for carrying on substantially all business functions on those days. “Carrying on substantially all business functions” means that both your public and your back office operations are functioning. [Commentary, Section 1005.2(d)-2] For example, if you are open on Saturdays for handling some transactions (such as deposits, withdrawals, and other teller transactions), but not for performing internal functions (such as investigating account errors), then Saturday is not a business day for you. A “business day” under Regulation CC, by contrast, will never be a Saturday, Sunday, and federal legal holiday, regardless of whether you are open for business on those days or not.

    Appendix A, Section A-2(c), has model language for disclosing your business days.

  4. The disclosure must describe the types of EFTs that the consumer can make, and any limitations on the frequency or dollar amount of the transfers. [12 CFR 1005.7(b)(4)] You need not disclose the details of the limitations if their confidentiality is necessary to the security of your EFT system. [12 CFR 1005.7(b)(4)] Preauthorized transfers do not have to be listed as a type of EFT, even though the consumer may have contracted for them, but you may list them if you wish. [Commentary, Section 1005.7(b)(4)-3]

    In March of 2001, the Federal Reserve Board (FRB) amended the Commentary to deal with a new type of transaction—electronic check conversion transactions, or “e-checks.” [Federal Register, March 16, 2001, at page 15187] The amendments clarified that e-checks are EFTs. In January of 2006, the FRB again amended Regulation E and clarified how e-checks are to be disclosed on the initial disclosure. The new rules have a mandatory compliance date of January 1, 2007, but institutions can comply prior to that date.

    An “e-check” is a regular paper check that the consumer supplies to a payee, usually a retail merchant, who “converts” the check into an EFT. The merchant does this at a point-of-sale (POS) terminal by electronically scanning and capturing the Magnetic Ink Character Recognition (MICR) encoding on the check for the routing, account, and serial numbers, and entering the amount. Other times, the merchant will do the conversion when a check is mailed to the merchant or a lock box. In either case, the person converting the check into an EFT must provide a notice to the consumer that informs the consumer of the conversion. [See Appendix A-6 to Regulation E.]

    Model language for disclosing e-checks on the initial disclosure says simply:

    You may authorize a merchant or other payee to make a one-time electronic payment from your checking account using information from your check to:
    • Pay for purchases
    • Pay bills

    As we mentioned at the beginning of this chapter, two other types of transfers should probably be treated on the initial disclosure in the same way as e-checks. These are “WEB code transactions” and “TEL code transactions,” neither of which are addressed by Regulation E or the Commentary, but which are similar enough to e-checks that they should probably be treated as EFTs. (In fact, the staff of the Federal Reserve Board has said that such transactions are EFTs, but that the e-check rules do not apply to them. See Supplementary Information issued in connection with revised e-check regulations, Federal Register for January 10, 2006, at page 1640.] A WEB code transaction is an EFT authorized by a consumer over the Internet and initiated by a third party through the Automated Clearing House (ACH) network. As part of the transaction, the consumer provides the third party with their account and routing information. A TEL code transaction is similar in nature except that the transfer is authorized over the phone.

    Some types of accounts, such as money-market deposit accounts, are limited by Regulation D (the reserve requirement regulation) as to the number of certain preauthorized, automatic, and telephone transfers from the account that may occur in a month. [12 CFR 204.2(d)(2)] Whether your initial disclosure needs to list these limitations depends on the way you enforce the limitations. If you enforce them by preventing any transfers beyond the maximum number from occurring, then you need to disclose the limitations. If your procedure is to warn the consumer when too many transfers occur and to close the account if repeated abuses occur, then you do not have to list the transfer limitations imposed by Regulation D in your Regulation E initial disclosure. [Commentary, Section 1005.7(b)(4)-2]

    Appendix A, Section A-2(d), has model language for making the types and limitations of EFTs disclosure.

  5. The disclosure must list any charges for EFTs, or the right to make EFTs. [12 CFR 1005.7(b)(5)] Charges which are connected with EFTs but which are not strictly due to an EFT or the right to make EFTs need not be disclosed. For example, charges for stop-payment orders, dishonors, or overdrafts need not be disclosed, although you may if you wish. [Commentary, Section 1005.7(b)(5)-1] If certain conditions must be met before a charge is imposed, the conditions must be disclosed also. [Commentary, Section 1005.7(b)(5)-2] You do not need to disclose charges imposed on the consumer by other financial institutions (for use of a shared ATM, for example). However, if you pass along to the consumer any charges imposed on you for use of the shared ATM, you must disclose the charges passed along. [Commentary, Section 1005.7(b)(5)-3]

    Appendix A, Section A-2(e), has model language for “per transfer” charges, “fixed” charges, and “average or minimum balance” charges. (Note that charges imposed because an account balance goes below a certain minimum average balance or an absolute minimum balance are not required to be disclosed since they are not strictly due to EFTs or the right to make EFTs. The model language for “average or minimum balance” charges describes charges imposed for making an EFT during a time the account balance is below such an average or minimum.)

  6. The disclosure must contain a summary of the consumer’s right to receive documentation of certain EFTs. [12 CFR 1005.7(b)(6)] We describe in detail what these documentation rights are in the Regulation E chapter in Part II of this manual. Briefly, the consumer has the right:
    • To a receipt each time he or she uses an ATM or point-of-sale terminal;
    • To a notice when each direct deposit is made, or a notice whenever a direct deposit scheduled to be made is not made, or a telephone number which the consumer can call to find out if a scheduled direct deposit has been made;
    • To a monthly or quarterly periodic statement; and
    • To a notation in his or her passbook showing direct deposits made since the last notation, in certain circumstances.

    For purposes of preparing an initial disclosure, all you need to know is that these rights must be summarized on the disclosure. Appendix A, Section A-2(g), provides model language summarizing these rights. Within the model language are a number of alternative paragraphs and which ones you select will depend on the choices you make about the documentation you will supply. We go over those choices in detail in our Part II chapter.

  7. The disclosure must contain a summary of the consumer’s right to stop payment of a preauthorized transfer and the procedure for initiating a stop-payment order. [12 CFR 1005.7(b)(7)] We also go over this in more detail in Part II of this manual, but briefly, the consumer has the right to stop payment on a preauthorized withdrawal if he or she notifies you at any time up to three business days before the scheduled date of the transfer. The stop-payment order can be either oral or in writing, but if it is oral, you can require the consumer to submit a written confirmation of the order within 14 days of the oral notification. Appendix A, Section A-2(h), provides model language summarizing these procedures, and you should use the model language for this disclosure.
  8. The disclosure must contain a summary of your liability to the consumer in the event you fail to make or to stop certain EFTs. [12 CFR 1005.7(b)(8)] Basically, you are liable to the consumer, under Section 910 of the Electronic Fund Transfer Act, for the consumer’s losses and damages in the event you do not make a transfer at the right time, in the right amount, or you fail to stop a transfer for which the consumer has submitted a timely stop-payment order. Your initial disclosure must state this liability. Appendix A, Sections A-2(h)(3) and A-2(i), contains the model language you should use.
  9. The disclosure must describe the circumstances in which you, in the ordinary course of business, would disclose information to nonaffiliated third parties concerning the consumer’s account. [12 CFR 1005.7(b)(9)] This refers to any account information—not just information about EFTs. Appendix A, Section A-2(f), contains model language for this disclosure, and we would recommend that you use it if it correctly describes your policy. If not, you should change it accordingly.
  10. The disclosure must contain a description of Regulation E’s error-resolution procedures and the consumer’s rights under them. [12 CFR 1005.7(b)(10)] Appendix A, Section A-3(a), has a notice with language containing this description, and the Regulation requires that your disclosure contain language substantially similar to this notice. Therefore, you should not change this language except to delete inapplicable items, add trade names, or include state law or third party card company provisions allowing for more consumer protection. One other change you are permitted to make is to refer to the longer time periods allowed for dealing with errors resulting from foreign-initiated transfers (those initiated from outside the U.S., its possessions, and Puerto Rico); point-of-sale transfers; and EFTs into or out of new accounts. The notice in the Regulation refers to ten-day and 45-day time periods, and these periods are extended to 20 days instead of ten for new accounts and 90 days instead of 45 for foreign-initiated and point-of-sale transfers and transfers into or out of new accounts. If you want to take advantage of these longer time periods (and we cannot think of a reason why you wouldn’t), you should refer to them in your disclosure. [Commentary, Section 1005.7(b)(10)-2] We go into more detail as to the meaning of these time periods in the Regulation E chapter in Part II: Ongoing Responsibilities.
  11. Finally, the disclosure must contain a notice that a fee may be imposed by an automated teller machine operator when the consumer initiates an electronic fund transfer or makes a balance inquiry, and by any network used to complete the transaction. [12 CFR 1005.7(b)(11)] The Gramm-Leach-Bliley Act added this disclosure item. The FRB has added model language for the disclosure. See Appendix A-2(j).

    Those are the required elements of your initial disclosure. We have just a few more general comments about it before we’re through.

    First, you are required to disclose a telephone number in several instances throughout the disclosure (for reporting loss or theft of a card or an unauthorized transfer, for learning about receipt of a scheduled direct deposit, for stopping payment of a preauthorized transfer, and for giving notice of an error). You do not need different numbers for all of these purposes. A single number will do, or you can have different numbers if you prefer. [Commentary, Section 1005.7(b)(2)-1] Also, the telephone numbers themselves need not be on the disclosure if the number is readily available and you refer to it on your disclosure. However, you must put the number to be used for reporting a lost or stolen access device on the disclosure. [Commentary, Section 1005.7(b)(2)-2] So, if this is the same number that you use for the other purposes, the option of referring to numbers rather than including them in your disclosure is not of much value.

    Second, your disclosure form can make disclosures for all the types of EFTs that you handle, even if the consumers receiving the form have not signed up for all the services for which you disclose. [Commentary, Section 1005.7(a)-6] This rule enables you to keep the number of forms you have for initial disclosure purposes down to one.

    Third, if a consumer who has previously received the initial disclosures in connection with one account arranges for EFTs involving another account, that consumer is entitled only to disclosures that are different from those you previously supplied. [Commentary, Section 1005.7(a)-3] So, for example, if your initial disclosure form included disclosures for all types of EFTs and the form has not changed since the consumer first received it, then you do not have to give it to the consumer again when the consumer arranges for EFTs to or from the new account. Along the same line, if a consumer signs up for an EFT service and receives disclosures, then later signs up for an additional service, you only need to give additional disclosures if the added service is subject to different terms and conditions from those given in the initial disclosures. [Commentary, Section 1005.7(a)-4]

    Fourth, if you are jointly providing EFT services with another financial institution, you need only make disclosures that are within your knowledge and within the purview of your relationship with the consumer whose account you hold. [12 CFR 1005.4(e)] So, for example, you do not need to disclose the other institution’s EFT charges or limitations on frequency and dollar amount, since these are not within the purview of your relationship with the consumer.

    And finally, payroll card accounts are subject to Regulation E. Institutions can avoid having to provide a periodic statement to consumers owning a payroll card account. If the institution opts to not provide a periodic statement, then the institution must do some other things, one of which is to include some information in the initial disclosure it provides to the consumer. In particular, the institution will have to add the following to the disclosure:

    • A telephone number that the consumer may call to obtain the account balance,
    • The means by which the consumer can obtain an electronic account history, such as the address of an Internet Web site,
    • A summary of the consumer’s right to receive a written account history upon request (in place of the summary of the right to receive a periodic statement), including a telephone number to call to request a history, and
    • An error resolution notice.

    [12 CFR 1005.18(c)(1)]

    Regulation E imposes other conditions on you—after account opening—in order to avoid having to send a periodic statement for a payroll card account. We describe these additional obligations in the chapter in the second part of this manual, titled “The Electronic Fund Transfer Act and Regulation E: Responsibilities After Account Opening.”

Prepaid Accounts

Pre-acquisition Disclosures

There are two distinct pre-acquisition disclosures for prepaid accounts – a short form disclosure and a long form disclosure. There is also certain information that must be provided in close proximity to the short form disclosure. Generally, these disclosures must be provided before a consumer acquires a prepaid account.

Short form disclosure and information in close proximity

The short form disclosure includes key fees and other information about the prepaid account, and must be in a specific, tabular format. The Prepaid Rule includes several model forms for the short form disclosure.

The short form disclosure includes information on a periodic fee, per purchase fee, ATM withdrawal fees, cash reload fee, ATM balance inquiry fees, customer service fees, and inactivity fee. The short form must list all these fees (known as static fees) on the short form disclosure, even if the amount of the fee is zero or the fee relates to a feature that is not offered as part of the specific prepaid account program. The short form also includes the number of fee types in addition to the static fees (excluding any purchase price, any activation fee, and any finance charges related to credit) that the consumer may be charged under the specific prepaid account program. And it must disclose the two additional fee types that generated the highest revenue from consumers during the previous 24 months. Other information that must be provided in the short form includes a statement regarding linked overdraft credit features, registration and FDIC/NCUA insurance, the URL for the Bureau’s website where the consumer can obtain general information about prepaid accounts (i.e., cfpb.gov/prepaid), and information on where the consumer can find the long form disclosure. There are also special disclosures related to payroll cards and government benefit accounts. In close proximity to the short form disclosure, a financial institution must disclose its name, the name of the prepaid account program, any purchase price for the prepaid account, and any fee for activating the prepaid account.

Long form disclosure

The long form disclosure includes comprehensive fee information and other key information about the prepaid account. The rule includes a sample form for the long form disclosure. The long form disclosure must include: a title, information about all fees that may be imposed in connection with the account (not just fees for electronic fund transfers) and the conditions under which they may be imposed; a statement regarding registration and FDIC/NCUA insurance; a statement regarding linked overdraft credit features; a statement containing the financial institution’s contact information; a statement directing the consumer to cfpb.gov/prepaid for general information about prepaid accounts; and a statement directing the consumer to cfpb.gov/complaint and the Bureau’s telephone number (1-855-411-2372) to submit a complaint related to a prepaid account. For prepaid accounts offering an overdraft credit feature, the long form disclosure must also include specific Regulation Z disclosures.

Initial disclosures

The initial disclosure requirements (12 CFR 1005.7) also apply to prepaid accounts. In addition to the other disclosure requirements, the initial disclosure must contain all of the information contained the long form disclosure.

Conclusion

Regulation E appears at 12 CFR 1005.1 et seq. Section 1005.7 deals with the initial disclosure and Appendix A gives model language for many of the required disclosures. We recommend that you carefully read the Regulation, the Commentary to the Regulation, and Appendix A.