Introduction: The Electronic Fund Transfer Act and Reg E

The only responsibility imposed on you by Regulation E at the time of account opening is to give the account holder an initial disclosure of the terms and conditions that apply to the electronic funds transfer service for which the account holder has contracted. And, as we will see, the rule does not necessarily require that the disclosure be given at account opening. However, many institutions find it helpful to give the disclosure at account opening, even when not strictly required at that time, and so we decided to view the initial disclosure requirements as account-opening responsibilities in this manual.

After a brief reference to state-law requirements, this section will give you a general introduction to Regulation E by explaining the types of transactions to which it applies, the sorts of account holders who enjoy the benefits of it, and some of the words and phrases used by the Regulation. We will then look at the details of the initial disclosure requirement—when the disclosure must be given, to whom it must be given, who must give it, what its format must be, and what its contents must be.

Regulation E imposes many requirements besides the initial disclosure requirement. We deal with these other requirements in the Regulation E section in Part II of this manual since they are more in the nature of ongoing account responsibilities. These other requirements include documentation requirements, such as terminal receipts and periodic statements, billing error resolution procedures, restrictions on the issuance of “access devices,” notices of changes in terms, annual or periodic error notices, consumer liability for unauthorized transfers, stop-payment procedures, and rules regarding remittance transfers.