12 CFR 1005 - Electronic Funds Transfers

Bur. of Consumer Financial Protection

Pt. 1005

PART 1005—ELECTRONIC FUND
TRANSFERS (REGULATION E)
Subpart A—General
Sec.
1005.1 Authority and purpose.
1005.2 Definitions.
1005.3 Coverage.
1005.4 General
disclosure
requirements;
jointly offered services.
1005.5 Issuance of access devices.
1005.6 Liability of consumer for unauthorized transfers.
1005.7 Initial disclosures.
1005.8 Change in terms notice; error resolution notice.
1005.9 Receipts at electronic terminals;
periodic statements.
1005.10 Preauthorized transfers.
1005.11 Procedures for resolving errors.
1005.12 Relation to other laws.
1005.13 Administrative enforcement; record
retention.
1005.14 Electronic fund transfer service provider not holding consumer’s account.
1005.15 Electronic fund transfer of government benefits.
1005.16 Disclosures at automated teller machines.
1005.17 Requirements for overdraft services.
1005.18 Requirements for financial institutions offering payroll card accounts.
1005.20 Requirements for gift cards and gift
certificates.

Subpart B—Requirements for Remittance
Transfers
1005.30 Remittance transfer definitions.
1005.31 Disclosures.
1005.32 Estimates.
1005.33 Procedures for resolving errors.
1005.34 Procedures for cancellation and refund of remittance transfers.
1005.35 Acts of agents.
1005.36 Transfers scheduled before the date
of transfer.
APPENDIX A TO PART 1005—MODEL DISCLOSURE CLAUSES AND FORMS
APPENDIX B TO PART 1005 [RESERVED]
APPENDIX C TO PART 1005—ISSUANCE OF OFFICIAL INTERPRETATIONS
SUPPLEMENT I TO PART 1005—OFFICIAL INTER-

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PRETATIONS

AUTHORITY: 12 U.S.C. 5512, 5581; 15 U.S.C.
1693b.
Subpart B is also issued under 12 U.S.C.
5601.
SOURCE: 76 FR 81023, Dec. 27, 2011, unless
otherwise noted.

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§ 1005.1

12 CFR Ch. X (1–1–16 Edition)

Subpart A—General
§ 1005.1

Authority and purpose.

(a) Authority. The regulation in this
part, known as Regulation E, is issued
by the Bureau of Consumer Financial
Protection (Bureau) pursuant to the
Electronic Fund Transfer Act (15
U.S.C. 1693 et seq.). The informationcollection requirements have been approved by the Office of Management
and Budget under 44 U.S.C. 3501 et seq.
and have been assigned OMB No. 3170–
0014.
(b) Purpose. This part carries out the
purposes of the Electronic Fund Transfer Act, which establishes the basic
rights, liabilities, and responsibilities
of consumers who use electronic fund
transfer and remittance transfer services and of financial institutions or
other persons that offer these services.
The primary objective of the act and
this part is the protection of individual
consumers engaging in electronic fund
transfers and remittance transfers.
[76 FR 81023, Dec. 27, 2011, as amended at 77
FR 6285, Feb. 7, 2012]

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§ 1005.2

Definitions.

Except as otherwise provided in subpart B, for purposes of this part, the
following definitions apply:
(a)(1) ‘‘Access device’’ means a card,
code, or other means of access to a consumer’s account, or any combination
thereof, that may be used by the consumer to initiate electronic fund transfers.
(2) An access device becomes an ‘‘accepted access device’’ when the consumer:
(i) Requests and receives, or signs, or
uses (or authorizes another to use) the
access device to transfer money between accounts or to obtain money,
property, or services;
(ii) Requests validation of an access
device issued on an unsolicited basis;
or
(iii) Receives an access device in renewal of, or in substitution for, an accepted access device from either the financial institution that initially issued
the device or a successor.
(b)(1) ‘‘Account’’ means a demand deposit (checking), savings, or other consumer asset account (other than an oc-

casional or incidental credit balance in
a credit plan) held directly or indirectly by a financial institution and established primarily for personal, family, or household purposes.
(2) The term includes a ‘‘payroll card
account’’ which is an account that is
directly or indirectly established
through an employer and to which
electronic fund transfers of the consumer’s wages, salary, or other employee compensation (such as commissions), are made on a recurring basis,
whether the account is operated or
managed by the employer, a thirdparty payroll processor, a depository
institution or any other person. For
rules governing payroll card accounts,
see § 1005.18.
(3) The term does not include an account held by a financial institution
under a bona fide trust agreement.
(c) ‘‘Act’’ means the Electronic Fund
Transfer Act (Title IX of the Consumer
Credit Protection Act, 15 U.S.C. 1693 et
seq.).
(d) ‘‘Business day’’ means any day on
which the offices of the consumer’s financial institution are open to the public for carrying on substantially all
business functions.
(e) ‘‘Consumer’’ means a natural person.
(f) ‘‘Credit’’ means the right granted
by a financial institution to a consumer to defer payment of debt, incur
debt and defer its payment, or purchase
property or services and defer payment
therefor.
(g) ‘‘Electronic fund transfer’’ is defined in § 1005.3.
(h) ‘‘Electronic terminal’’ means an
electronic device, other than a telephone operated by a consumer, through
which a consumer may initiate an electronic fund transfer. The term includes, but is not limited to, point-ofsale terminals, automated teller machines (ATMs), and cash dispensing
machines.
(i) ‘‘Financial institution’’ means a
bank, savings association, credit union,
or any other person that directly or indirectly holds an account belonging to
a consumer, or that issues an access
device and agrees with a consumer to
provide electronic fund transfer services, other than a person excluded from
coverage of this part by section 1029 of

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Bur. of Consumer Financial Protection

§ 1005.3

the Consumer Financial Protection Act
of 2010, title X of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, Public Law 111–203, 124 Stat.
1376.
(j) ‘‘Person’’ means a natural person
or an organization, including a corporation, government agency, estate,
trust, partnership, proprietorship, cooperative, or association.
(k) ‘‘Preauthorized electronic fund
transfer’’ means an electronic fund
transfer authorized in advance to recur
at substantially regular intervals.
(l) ‘‘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 the thereof in
this paragraph (l).
(m) ‘‘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 the transfer and from which the
consumer receives no benefit. The term
does not include an electronic fund
transfer initiated:
(1) By a person who was furnished the
access device to the consumer’s account by the consumer, unless the consumer has notified the financial institution that transfers by that person
are no longer authorized;
(2) With fraudulent intent by the consumer or any person acting in concert
with the consumer; or
(3) By the financial institution or its
employee.
[76 FR 81023, Dec. 27, 2011, as amended at 77
FR 6285, Feb. 7, 2012]

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§ 1005.3

Coverage.

(a) General. This part applies to any
electronic fund transfer that authorizes a financial institution to debit or
credit a consumer’s account. Generally, this part applies to financial institutions. For purposes of §§ 1005.3(b)(2)
and (3), 1005.10(b), (d), and (e), 1005.13,
and 1005.20, this part applies to any person, other than a person excluded from
coverage of this part by section 1029 of
the Consumer Financial Protection Act
of 2010, Title X of the Dodd-Frank Wall
Street Reform and Consumer Protection Act, Pub. L. 111–203, 124 Stat. 1376.

The requirements of subpart B apply to
remittance transfer providers.
(b) Electronic fund transfer—(1) Definition. The term ‘‘electronic fund transfer’’ means any transfer of funds that
is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering,
instructing, or authorizing a financial
institution to debit or credit a consumer’s account. The term includes,
but is not limited to:
(i) Point-of-sale transfers;
(ii) Automated teller machine transfers;
(iii) Direct deposits or withdrawals of
funds;
(iv) Transfers initiated by telephone;
and
(v) Transfers resulting from debit
card transactions, whether or not initiated through an electronic terminal.
(2) Electronic fund transfer using information from a check. (i) This part applies where a check, draft, or similar
paper instrument is used as a source of
information to initiate a one-time electronic fund transfer from a consumer’s
account. The consumer must authorize
the transfer.
(ii) The person initiating an electronic fund transfer using the consumer’s check as a source of information for the transfer must provide a notice that the transaction will or may
be processed as an electronic fund
transfer, and obtain a consumer’s authorization for each transfer. A consumer authorizes a one-time electronic
fund transfer (in providing a check to a
merchant or other payee for the MICR
encoding, that is, the routing number
of the financial institution, the consumer’s account number and the serial
number) when the consumer receives
notice and goes forward with the underlying transaction. For point-of-sale
transfers, the notice must be posted in
a prominent and conspicuous location,
and a copy thereof, or a substantially
similar notice, must be provided to the
consumer at the time of the transaction.
(iii) A person may provide notices
that are substantially similar to those
set forth in appendix A–6 to comply
with the requirements of this paragraph (b)(2).

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§ 1005.3

12 CFR Ch. X (1–1–16 Edition)

(3) Collection of returned item fees via
electronic fund transfer—(i) General. The
person initiating an electronic fund
transfer to collect a fee for the return
of an electronic fund transfer or a
check that is unpaid, including due to
insufficient or uncollected funds in the
consumer’s account, must obtain the
consumer’s authorization for each
transfer. A consumer authorizes a onetime electronic fund transfer from his
or her account to pay the fee for the returned item or transfer if the person
collecting the fee provides notice to
the consumer stating that the person
may electronically collect the fee, and
the consumer goes forward with the
underlying transaction. The notice
must state that the fee will be collected by means of an electronic fund
transfer from the consumer’s account
if the payment is returned unpaid and
must disclose the dollar amount of the
fee. If the fee may vary due to the
amount of the transaction or due to
other factors, then, except as otherwise
provided in paragraph (b)(3)(ii) of this
section, the person collecting the fee
may disclose, in place of the dollar
amount of the fee, an explanation of
how the fee will be determined.
(ii) Point-of-sale transactions. If a fee
for an electronic fund transfer or check
returned unpaid may be collected electronically in connection with a pointof-sale transaction, the person initiating an electronic fund transfer to
collect the fee must post the notice described in paragraph (b)(3)(i) of this
section in a prominent and conspicuous
location. The person also must either
provide the consumer with a copy of
the posted notice (or a substantially
similar notice) at the time of the
transaction, or mail the copy (or a substantially similar notice) to the consumer’s address as soon as reasonably
practicable after the person initiates
the electronic fund transfer to collect
the fee. If the amount of the fee may
vary due to the amount of the transaction or due to other factors, the posted notice may explain how the fee will
be determined, but the notice provided
to the consumer must state the dollar
amount of the fee if the amount can be
calculated at the time the notice is
provided or mailed to the consumer.

(c) Exclusions from coverage. The term
‘‘electronic fund transfer’’ does not include:
(1) Checks. Any transfer of funds
originated by check, draft, or similar
paper instrument; or any payment
made by check, draft, or similar paper
instrument at an electronic terminal.
(2) Check guarantee or authorization.
Any transfer of funds that guarantees
payment or authorizes acceptance of a
check, draft, or similar paper instrument but that does not directly result
in a debit or credit to a consumer’s account.
(3) Wire or other similar transfers. Any
transfer of funds through Fedwire or
through a similar wire transfer system
that is used primarily for transfers between financial institutions or between
businesses.
(4) Securities and commodities transfers.
Any transfer of funds the primary purpose of which is the purchase or sale of
a security or commodity, if the security or commodity is:
(i) Regulated by the Securities and
Exchange Commission or the Commodity Futures Trading Commission;
(ii) Purchased or sold through a
broker-dealer regulated by the Securities and Exchange Commission or
through a futures commission merchant regulated by the Commodity Futures Trading Commission; or
(iii) Held in book-entry form by a
Federal Reserve Bank or Federal agency.
(5) Automatic transfers by accountholding institution. Any transfer of
funds under an agreement between a
consumer and a financial institution
which provides that the institution
will initiate individual transfers without a specific request from the consumer:
(i) Between a consumer’s accounts
within the financial institution;
(ii) From a consumer’s account to an
account of a member of the consumer’s
family held in the same financial institution; or
(iii) Between a consumer’s account
and an account of the financial institution, except that these transfers remain subject to § 1005.10(e) regarding
compulsory use and sections 916 and 917
of the Act regarding civil and criminal
liability.

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Bur. of Consumer Financial Protection

§ 1005.5

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(6) Telephone-initiated transfers. Any
transfer of funds that:
(i) Is initiated by a telephone communication between a consumer and a
financial institution making the transfer; and
(ii) Does not take place under a telephone bill-payment or other written
plan in which periodic or recurring
transfers are contemplated.
(7)
Small
institutions.
Any
preauthorized transfer to or from an
account if the assets of the accountholding financial institution were $100
million or less on the preceding December 31. If assets of the account-holding
institution subsequently exceed $100
million, the institution’s exemption for
preauthorized transfers terminates one
year from the end of the calendar year
in which the assets exceed $100 million.
Preauthorized transfers exempt under
this paragraph (c)(7) remain subject to
§ 1005.10(e) regarding compulsory use
and sections 916 and 917 of the Act regarding civil and criminal liability.
[76 FR 81023, Dec. 27, 2011, as amended at 77
FR 6285, Feb. 7, 2012]

in Lending Act (15 U.S.C. 1601 et seq.) or
the Truth in Savings Act (12 U.S.C. 4301
et seq.) with the disclosures required by
this part.
(c) Multiple accounts and account holders—(1) Multiple accounts. A financial
institution may combine the required
disclosures into a single statement for
a consumer who holds more than one
account at the institution.
(2) Multiple account holders. For joint
accounts held by two or more consumers, a financial institution need
provide only one set of the required
disclosures and may provide them to
any of the account holders.
(d) Services offered jointly. Financial
institutions that provide electronic
fund transfer services jointly may contract among themselves to comply
with the requirements that this part
imposes on any or all of them. An institution need make only the disclosures required by §§ 1005.7 and 1005.8
that are within its knowledge and
within the purview of its relationship
with the consumer for whom it holds
an account.

§ 1005.4 General disclosure requirements; jointly offered services.
(a)(1) Form of disclosures. Disclosures
required under this part shall be clear
and readily understandable, in writing,
and in a form the consumer may keep,
except as otherwise provided in this
part. The disclosures required by this
part may be provided to the consumer
in electronic form, subject to compliance with the consumer-consent and
other applicable provisions of the Electronic Signatures in Global and National Commerce Act (E-Sign Act) (15
U.S.C. 7001 et seq.). A financial institution may use commonly accepted or
readily understandable abbreviations
in complying with the disclosure requirements of this part.
(2) Foreign language disclosures. Disclosures required under this part may
be made in a language other than
English, provided that the disclosures
are made available in English upon the
consumer’s request.
(b) Additional information; disclosures
required by other laws. A financial institution may include additional information and may combine disclosures required by other laws (such as the Truth

§ 1005.5 Issuance of access devices.
(a) Solicited issuance. Except as provided in paragraph (b) of this section, a
financial institution may issue an access device to a consumer only:
(1) In response to an oral or written
request for the device; or
(2) As a renewal of, or in substitution
for, an accepted access device whether
issued by the institution or a successor.
(b) Unsolicited issuance. A financial
institution may distribute an access
device to a consumer on an unsolicited
basis if the access device is:
(1) Not validated, meaning that the
institution has not yet performed all
the procedures that would enable a
consumer to initiate an electronic fund
transfer using the access device;
(2) Accompanied by a clear explanation that the access device is not
validated and how the consumer may
dispose of it if validation is not desired;
(3) Accompanied by the disclosures
required by § 1005.7, of the consumer’s
rights and liabilities that will apply if
the access device is validated; and
(4) Validated only in response to the
consumer’s oral or written request for

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§ 1005.6

12 CFR Ch. X (1–1–16 Edition)

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validation, after the institution has
verified the consumer’s identity by a
reasonable means.
§ 1005.6 Liability of consumer for unauthorized transfers.
(a) Conditions for liability. A consumer
may be held liable, within the limitations described in paragraph (b) of this
section, for an unauthorized electronic
fund transfer involving the consumer’s
account only if the financial institution has provided the disclosures required by § 1005.7(b)(1), (2), and (3). If
the unauthorized transfer involved an
access device, it must be an accepted
access device and the financial institution must have provided a means to
identify the consumer to whom it was
issued.
(b) Limitations on amount of liability. A
consumer’s liability for an unauthorized electronic fund transfer or a series
of related unauthorized transfers shall
be determined as follows:
(1) Timely notice given. If the consumer notifies the financial institution
within two business days after learning
of the loss or theft of the access device,
the consumer’s liability shall not exceed the lesser of $50 or the amount of
unauthorized transfers that occur before notice to the financial institution.
(2) Timely notice not given. If the consumer fails to notify the financial institution within two business days
after learning of the loss or theft of the
access device, the consumer’s liability
shall not exceed the lesser of $500 or
the sum of:
(i) $50 or the amount of unauthorized
transfers that occur within the two
business days, whichever is less; and
(ii) The amount of unauthorized
transfers that occur after the close of
two business days and before notice to
the institution, provided the institution establishes that these transfers
would not have occurred had the consumer notified the institution within
that two-day period.
(3) Periodic statement; timely notice not
given. A consumer must report an unauthorized electronic fund transfer
that appears on a periodic statement
within 60 days of the financial institution’s transmittal of the statement to
avoid liability for subsequent transfers.
If the consumer fails to do so, the con-

sumer’s liability shall not exceed the
amount of the unauthorized transfers
that occur after the close of the 60 days
and before notice to the institution,
and that the institution establishes
would not have occurred had the consumer notified the institution within
the 60-day period. When an access device is involved in the unauthorized
transfer, the consumer may be liable
for other amounts set forth in paragraphs (b)(1) or (b)(2) of this section, as
applicable.
(4) Extension of time limits. If the consumer’s delay in notifying the financial
institution was due to extenuating circumstances, the institution shall extend the times specified above to a reasonable period.
(5) Notice to financial institution. (i)
Notice to a financial institution is
given when a consumer takes steps reasonably necessary to provide the institution with the pertinent information,
whether or not a particular employee
or agent of the institution actually receives the information.
(ii) The consumer may notify the institution in person, by telephone, or in
writing.
(iii) Written notice is considered
given at the time the consumer mails
the notice or delivers it for transmission to the institution by any other
usual means. Notice may be considered
constructively given when the institution becomes aware of circumstances
leading to the reasonable belief that an
unauthorized transfer to or from the
consumer’s account has been or may be
made.
(6) Liability under state law or agreement. If state law or an agreement between the consumer and the financial
institution imposes less liability than
is provided by this section, the consumer’s liability shall not exceed the
amount imposed under the state law or
agreement.
§ 1005.7

Initial disclosures.

(a) Timing of disclosures. A financial
institution shall make the disclosures
required by this section at the time a
consumer contracts for an electronic
fund transfer service or before the first
electronic fund transfer is made involving the consumer’s account.

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Bur. of Consumer Financial Protection

§ 1005.8

(b) Content of disclosures. A financial
institution shall provide the following
disclosures, as applicable:
(1) Liability of consumer. A summary
of the consumer’s liability, under
§ 1005.6 or under state or other applicable law or agreement, for unauthorized
electronic fund transfers.
(2) Telephone number and address. The
telephone number and address of the
person or office to be notified when the
consumer believes that an unauthorized electronic fund transfer has been
or may be made.
(3) Business days. The financial institution’s business days.
(4) Types of transfers; limitations. The
type of electronic fund transfers that
the consumer may make and any limitations on the frequency and dollar
amount of transfers. Details of the limitations need not be disclosed if confidentiality is essential to maintain
the security of the electronic fund
transfer system.
(5) Fees. Any fees imposed by the financial institution for electronic fund
transfers or for the right to make
transfers.
(6) Documentation. A summary of the
consumer’s right to receipts and periodic statements, as provided in § 1005.9
of this part, and notices regarding
preauthorized transfers as provided in
§ 1005.10(a) and (d).
(7) Stop payment. A summary of the
consumer’s right to stop payment of a
preauthorized electronic fund transfer
and the procedure for placing a stoppayment
order,
as
provided
in
§ 1005.10(c).
(8) Liability of institution. A summary
of the financial institution’s liability
to the consumer under section 910 of
the Act for failure to make or to stop
certain transfers.
(9) Confidentiality. The circumstances
under which, in the ordinary course of
business, the financial institution may
provide information concerning the
consumer’s account to third parties.
(10) Error resolution. A notice that is
substantially similar to Model Form
A–3 as set out in appendix A of this
part concerning error resolution.
(11) ATM fees. A notice that a fee may
be imposed by an automated teller machine
operator
as
defined
in
§ 1005.16(a)(1), when the consumer initi-

ates an electronic fund transfer or
makes a balance inquiry, and by any
network used to complete the transaction.
(c) Addition of electronic fund transfer
services. If an electronic fund transfer
service is added to a consumer’s account and is subject to terms and conditions different from those described
in the initial disclosures, disclosures
for the new service are required.
§ 1005.8 Change in terms notice; error
resolution notice.
(a) Change in terms notice—(1) Prior
notice required. A financial institution
shall mail or deliver a written notice
to the consumer, at least 21 days before
the effective date, of any change in a
term or condition required to be disclosed under § 1005.7(b) of this part if
the change would result in:
(i) Increased fees for the consumer;
(ii) Increased liability for the consumer;
(iii) Fewer types of available electronic fund transfers; or
(iv) Stricter limitations on the frequency or dollar amount of transfers.
(2) Prior notice exception. A financial
institution need not give prior notice if
an immediate change in terms or conditions is necessary to maintain or restore the security of an account or an
electronic fund transfer system. If the
institution makes such a change permanent and disclosure would not jeopardize the security of the account or
system, the institution shall notify the
consumer in writing on or with the
next regularly scheduled periodic
statement or within 30 days of making
the change permanent.
(b) Error resolution notice. For accounts to or from which electronic
fund transfers can be made, a financial
institution shall mail or deliver to the
consumer, at least once each calendar
year, an error resolution notice substantially similar to the model form
set forth in appendix A of this part
(Model Form A–3). Alternatively, an institution may include an abbreviated
notice substantially similar to the
model form error resolution notice set
forth in appendix A of this part (Model
Form A–3), on or with each periodic
statement required by § 1005.9(b).

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§ 1005.9

12 CFR Ch. X (1–1–16 Edition)

§ 1005.9 Receipts at electronic terminals; periodic statements.
(a) Receipts at electronic terminals—
General. Except as provided in paragraph (e) of this section, a financial institution shall make a receipt available to a consumer at the time the consumer initiates an electronic fund
transfer at an electronic terminal. The
receipt shall set forth the following information, as applicable:
(1) Amount. The amount of the transfer. A transaction fee may be included
in this amount, provided the amount of
the fee is disclosed on the receipt and
displayed on or at the terminal.
(2) Date. The date the consumer initiates the transfer.
(3) Type. The type of transfer and the
type of the consumer’s account(s) to or
from which funds are transferred. The
type of account may be omitted if the
access device used is able to access
only one account at that terminal.
(4) Identification. A number or code
that identifies the consumer’s account
or accounts, or the access device used
to initiate the transfer. The number or
code need not exceed four digits or letters to comply with the requirements
of this paragraph (a)(4).
(5) Terminal location. The location of
the terminal where the transfer is initiated, or an identification such as a
code or terminal number. Except in
limited circumstances where all terminals are located in the same city or
state, if the location is disclosed, it
shall include the city and state or foreign country and one of the following:
(i) The street address; or
(ii) A generally accepted name for
the specific location; or
(iii) The name of the owner or operator of the terminal if other than the
account-holding institution.
(6) Third party transfer. The name of
any third party to or from whom funds
are transferred.
(b) Periodic statements. For an account
to or from which electronic fund transfers can be made, a financial institution shall send a periodic statement for
each monthly cycle in which an electronic fund transfer has occurred; and
shall send a periodic statement at least
quarterly if no transfer has occurred.
The statement shall set forth the following information, as applicable:

(1) Transaction information. For each
electronic fund transfer occurring during the cycle:
(i) The amount of the transfer;
(ii) The date the transfer was credited or debited to the consumer’s account;
(iii) The type of transfer and type of
account to or from which funds were
transferred;
(iv) For a transfer initiated by the
consumer at an electronic terminal
(except for a deposit of cash or a check,
draft, or similar paper instrument), the
terminal location described in paragraph (a)(5) of this section; and
(v) The name of any third party to or
from whom funds were transferred.
(2) Account number. The number of
the account.
(3) Fees. The amount of any fees assessed against the account during the
statement period for electronic fund
transfers, the right to make transfers,
or account maintenance.
(4) Account balances. The balance in
the account at the beginning and at
the close of the statement period.
(5) Address and telephone number for
inquiries. The address and telephone
number to be used for inquiries or notice of errors, preceded by ‘‘Direct inquiries to’’ or similar language. The
address and telephone number provided
on an error resolution notice under
§ 1005.8(b) given on or with the statement satisfies this requirement.
(6) Telephone number for preauthorized
transfers. A telephone number the consumer may call to ascertain whether
preauthorized transfers to the consumer’s account have occurred, if the
financial institution uses the telephone-notice
option
under
§ 1005.10(a)(1)(iii).
(c) Exceptions to the periodic statement
requirement for certain accounts—(1)
Preauthorized transfers to accounts. For
accounts that may be accessed only by
preauthorized transfers to the account
the following rules apply:
(i) Passbook accounts. For passbook
accounts, the financial institution need
not provide a periodic statement if the
institution updates the passbook upon
presentation or enters on a separate
document the amount and date of each
electronic fund transfer since the passbook was last presented.

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Bur. of Consumer Financial Protection

§ 1005.10

(ii) Other accounts. For accounts
other than passbook accounts, the financial institution must send a periodic statement at least quarterly.
(2) Intra-institutional transfers. For an
electronic fund transfer initiated by
the consumer between two accounts of
the consumer in the same institution,
documenting the transfer on a periodic
statement for one of the two accounts
satisfies the periodic statement requirement.
(3) Relationship between paragraphs
(c)(1) and (2) of this section. An account
that is accessed by preauthorized
transfers to the account described in
paragraph (c)(1) of this section and by
intra-institutional transfers described
in paragraph (c)(2) of this section, but
by no other type of electronic fund
transfers, qualifies for the exceptions
provided by paragraph (c)(1) of this section.
(d) Documentation for foreign-initiated
transfers. The failure by a financial institution to provide a terminal receipt
for an electronic fund transfer or to
document the transfer on a periodic
statement does not violate this part if:
(1) The transfer is not initiated within a state; and
(2) The financial institution treats an
inquiry for clarification or documentation as a notice of error in accordance
with § 1005.11.
(e) Exception for receipts in small-value
transfers. A financial institution is not
subject to the requirement to make
available a receipt under paragraph (a)
of this section if the amount of the
transfer is $15 or less.

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§ 1005.10

Preauthorized transfers.

(a) Preauthorized transfers to consumer’s account—(1) Notice by financial
institution. When a person initiates
preauthorized electronic fund transfers
to a consumer’s account at least once
every 60 days, the account-holding financial institution shall provide notice
to the consumer by:
(i) Positive notice. Providing oral or
written notice of the transfer within
two business days after the transfer occurs; or
(ii) Negative notice. Providing oral or
written notice, within two business
days after the date on which the trans-

fer was scheduled to occur, that the
transfer did not occur; or
(iii) Readily-available telephone line.
Providing a readily available telephone
line that the consumer may call to determine whether the transfer occurred
and disclosing the telephone number on
the initial disclosure of account terms
and on each periodic statement.
(2) Notice by payor. A financial institution need not provide notice of a
transfer if the payor gives the consumer positive notice that the transfer
has been initiated.
(3) Crediting. A financial institution
that receives a preauthorized transfer
of the type described in paragraph
(a)(1) of this section shall credit the
amount of the transfer as of the date
the funds for the transfer are received.
(b)
Written
authorization
for
preauthorized transfers from consumer’s
account. Preauthorized electronic fund
transfers from a consumer’s account
may be authorized only by a writing
signed or similarly authenticated by
the consumer. The person that obtains
the authorization shall provide a copy
to the consumer.
(c) Consumer’s right to stop payment—
(1) Notice. A consumer may stop payment of a preauthorized electronic fund
transfer from the consumer’s account
by notifying the financial institution
orally or in writing at least three business days before the scheduled date of
the transfer.
(2) Written confirmation. The financial
institution may require the consumer
to give written confirmation of a stoppayment order within 14 days of an
oral notification. An institution that
requires written confirmation shall inform the consumer of the requirement
and provide the address where confirmation must be sent when the consumer gives the oral notification. An
oral stop-payment order ceases to be
binding after 14 days if the consumer
fails to provide the required written
confirmation.
(d) Notice of transfers varying in
amount—(1)
Notice.
When
a
preauthorized electronic fund transfer
from the consumer’s account will vary
in amount from the previous transfer
under the same authorization or from

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§ 1005.11

12 CFR Ch. X (1–1–16 Edition)

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the preauthorized amount, the designated payee or the financial institution shall send the consumer written
notice of the amount and date of the
transfer at least 10 days before the
scheduled date of transfer.
(2) Range. The designated payee or
the institution shall inform the consumer of the right to receive notice of
all varying transfers, but may give the
consumer the option of receiving notice only when a transfer falls outside
a specified range of amounts or only
when a transfer differs from the most
recent transfer by more than an
agreed-upon amount.
(e) Compulsory use—(1) Credit. No financial institution or other person
may condition an extension of credit to
a consumer on the consumer’s repayment by preauthorized electronic fund
transfers, except for credit extended
under an overdraft credit plan or extended to maintain a specified minimum balance in the consumer’s account.
(2) Employment or government benefit.
No financial institution or other person may require a consumer to establish an account for receipt of electronic
fund transfers with a particular institution as a condition of employment or
receipt of a government benefit.
§ 1005.11 Procedures for resolving errors.
(a) Definition of error—(1) Types of
transfers or inquiries covered. The term
‘‘error’’ means:
(i) An unauthorized electronic fund
transfer;
(ii) An incorrect electronic fund
transfer to or from the consumer’s account;
(iii) The omission of an electronic
fund transfer from a periodic statement;
(iv) A computational or bookkeeping
error made by the financial institution
relating to an electronic fund transfer;
(v) The consumer’s receipt of an incorrect amount of money from an electronic terminal;
(vi) An electronic fund transfer not
identified in accordance with § 1005.9 or
§ 1005.10(a); or
(vii) The consumer’s request for documentation required by § 1005.9 or
§ 1005.10(a) or for additional informa-

tion or clarification concerning an
electronic fund transfer, including a request the consumer makes to determine whether an error exists under
paragraphs (a)(1)(i) through (vi) of this
section.
(2) Types of inquiries not covered. The
term ‘‘error’’ does not include:
(i) A routine inquiry about the consumer’s account balance;
(ii) A request for information for tax
or other recordkeeping purposes; or
(iii) A request for duplicate copies of
documentation.
(b) Notice of error from consumer—(1)
Timing; contents. A financial institution
shall comply with the requirements of
this section with respect to any oral or
written notice of error from the consumer that:
(i) Is received by the institution no
later than 60 days after the institution
sends the periodic statement or provides the passbook documentation, required by § 1005.9, on which the alleged
error is first reflected;
(ii) Enables the institution to identify the consumer’s name and account
number; and
(iii) Indicates why the consumer believes an error exists and includes to
the extent possible the type, date, and
amount of the error, except for requests described in paragraph (a)(1)(vii)
of this section.
(2) Written confirmation. A financial
institution may require the consumer
to give written confirmation of an
error within 10 business days of an oral
notice. An institution that requires
written confirmation shall inform the
consumer of the requirement and provide the address where confirmation
must be sent when the consumer gives
the oral notification.
(3) Request for documentation or clarifications. When a notice of error is
based on documentation or clarification that the consumer requested
under paragraph (a)(1)(vii) of this section, the consumer’s notice of error is
timely if received by the financial institution no later than 60 days after
the institution sends the information
requested.
(c) Time limits and extent of investigation—(1) Ten-day period. A financial institution shall investigate promptly
and, except as otherwise provided in

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Bur. of Consumer Financial Protection

§ 1005.11

this paragraph (c), shall determine
whether an error occurred within 10
business days of receiving a notice of
error. The institution shall report the
results to the consumer within three
business days after completing its investigation. The institution shall correct the error within one business day
after determining that an error occurred.
(2) Forty-five day period. If the financial institution is unable to complete
its investigation within 10 business
days, the institution may take up to 45
days from receipt of a notice of error to
investigate and determine whether an
error occurred, provided the institution
does the following:
(i) Provisionally credits the consumer’s account in the amount of the
alleged error (including interest where
applicable) within 10 business days of
receiving the error notice. If the financial institution has a reasonable basis
for believing that an unauthorized electronic fund transfer has occurred and
the institution has satisfied the requirements of § 1005.6(a), the institution may withhold a maximum of $50
from the amount credited. An institution need not provisionally credit the
consumer’s account if:
(A) The institution requires but does
not receive written confirmation within 10 business days of an oral notice of
error; or
(B) The alleged error involves an account that is subject to Regulation T
of the Board of Governors of the Federal Reserve System (Securities Credit
by Brokers and Dealers, 12 CFR part
220);
(ii) Informs the consumer, within two
business days after the provisional
crediting, of the amount and date of
the provisional crediting and gives the
consumer full use of the funds during
the investigation;
(iii) Corrects the error, if any, within
one business day after determining
that an error occurred; and
(iv) Reports the results to the consumer within three business days after
completing its investigation (including, if applicable, notice that a provisional credit has been made final).
(3) Extension of time periods. The time
periods in paragraphs (c)(1) and (c)(2) of
this section are extended as follows:

(i) The applicable time is 20 business
days in place of 10 business days under
paragraphs (c)(1) and (2) of this section
if the notice of error involves an electronic fund transfer to or from the account within 30 days after the first deposit to the account was made.
(ii) The applicable time is 90 days in
place of 45 days under paragraph (c)(2)
of this section, for completing an investigation, if a notice of error involves an electronic fund transfer that:
(A) Was not initiated within a state;
(B) Resulted from a point-of-sale
debit card transaction; or
(C) Occurred within 30 days after the
first deposit to the account was made.
(4) Investigation. With the exception
of transfers covered by § 1005.14 of this
part, a financial institution’s review of
its own records regarding an alleged
error satisfies the requirements of this
section if:
(i) The alleged error concerns a
transfer to or from a third party; and
(ii) There is no agreement between
the institution and the third party for
the type of electronic fund transfer involved.
(d) Procedures if financial institution
determines no error or different error occurred. In addition to following the procedures specified in paragraph (c) of
this section, the financial institution
shall follow the procedures set forth in
this paragraph (d) if it determines that
no error occurred or that an error occurred in a manner or amount different
from that described by the consumer:
(1) Written explanation. The institution’s report of the results of its investigation shall include a written explanation of the institution’s findings and
shall note the consumer’s right to request the documents that the institution relied on in making its determination. Upon request, the institution
shall promptly provide copies of the
documents.
(2) Debiting provisional credit. Upon
debiting
a
provisionally
credited
amount, the financial institution shall:
(i) Notify the consumer of the date
and amount of the debiting;
(ii) Notify the consumer that the institution will honor checks, drafts, or
similar instruments payable to third
parties and preauthorized transfers
from the consumer’s account (without

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§ 1005.12

12 CFR Ch. X (1–1–16 Edition)

charge to the consumer as a result of
an overdraft) for five business days
after the notification. The institution
shall honor items as specified in the
notice, but need honor only items that
it would have paid if the provisionally
credited funds had not been debited.
(e) Reassertion of error. A financial institution that has fully complied with
the error resolution requirements has
no further responsibilities under this
section should the consumer later reassert the same error, except in the
case of an error asserted by the consumer following receipt of information
provided under paragraph (a)(1)(vii) of
this section.

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§ 1005.12

Relation to other laws.

(a) Relation to Truth in Lending. (1)
The Electronic Fund Transfer Act and
this part govern:
(i) The addition to an accepted credit
card, as defined in Regulation Z (12
CFR 1026.12, comment 12–2), of the capability to initiate electronic fund
transfers;
(ii) The issuance of an access device
that permits credit extensions (under a
preexisting agreement between a consumer and a financial institution) only
when the consumer’s account is overdrawn or to maintain a specified minimum balance in the consumer’s account, or under an overdraft service, as
defined in § 1005.17(a) of this part;
(iii) The addition of an overdraft
service, as defined in § 1005.17(a), to an
accepted access device; and
(iv) A consumer’s liability for an unauthorized electronic fund transfer and
the investigation of errors involving an
extension of credit that occurs under
an agreement between the consumer
and a financial institution to extend
credit when the consumer’s account is
overdrawn or to maintain a specified
minimum balance in the consumer’s
account, or under an overdraft service,
as defined in § 1005.17(a).
(2) The Truth in Lending Act and
Regulation Z (12 CFR part 1026), which
prohibit the unsolicited issuance of
credit cards, govern:
(i) The addition of a credit feature to
an accepted access device; and
(ii) Except as provided in paragraph
(a)(1)(ii) of this section, the issuance of

a credit card that is also an access device.
(b) Preemption of inconsistent state
laws—(1) Inconsistent requirements. The
Bureau shall determine, upon its own
motion or upon the request of a state,
financial institution, or other interested party, whether the Act and this
part preempt state law relating to electronic fund transfers, or dormancy, inactivity, or service fees, or expiration
dates in the case of gift certificates,
store gift cards, or general-use prepaid
cards.
(2) Standards for determination. State
law is inconsistent with the requirements of the Act and this part if state
law:
(i) Requires or permits a practice or
act prohibited by the Federal law;
(ii) Provides for consumer liability
for unauthorized electronic fund transfers that exceeds the limits imposed by
the Federal law;
(iii) Allows longer time periods than
the Federal law for investigating and
correcting alleged errors, or does not
require the financial institution to
credit the consumer’s account during
an error investigation in accordance
with § 1005.11(c)(2)(i) of this part; or
(iv) Requires initial disclosures, periodic statements, or receipts that are
different in content from those required by the Federal law except to the
extent that the disclosures relate to
consumer rights granted by the state
law and not by the Federal law.
(c) State exemptions—(1) General rule.
Any state may apply for an exemption
from the requirements of the Act or
this part for any class of electronic
fund transfers within the state. The
Bureau shall grant an exemption if it
determines that:
(i) Under state law the class of electronic fund transfers is subject to requirements substantially similar to
those imposed by the Federal law; and
(ii) There is adequate provision for
state enforcement.
(2) Exception. To assure that the Federal and state courts continue to have
concurrent jurisdiction, and to aid in
implementing the Act:
(i) No exemption shall extend to the
civil liability provisions of section 916
of the Act; and

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Bur. of Consumer Financial Protection

§ 1005.14

(ii) When the Bureau grants an exemption, the state law requirements
shall constitute the requirements of
the Federal law for purposes of section
916 of the Act, except for state law requirements not imposed by the Federal
law.
§ 1005.13 Administrative enforcement;
record retention.
(a) Enforcement by Federal agencies.
Compliance with this part is enforced
in accordance with section 918 of the
Act.
(b) Record retention. (1) Any person
subject to the Act and this part shall
retain evidence of compliance with the
requirements imposed by the Act and
this part for a period of not less than
two years from the date disclosures are
required to be made or action is required to be taken.
(2) Any person subject to the Act and
this part having actual notice that it is
the subject of an investigation or an
enforcement proceeding by its enforcement agency, or having been served
with notice of an action filed under
sections 910, 916, or 917(a) of the Act,
shall retain the records that pertain to
the investigation, action, or proceeding
until final disposition of the matter
unless an earlier time is allowed by
court or agency order.

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§ 1005.14 Electronic fund transfer service provider not holding consumer’s
account.
(a) Provider of electronic fund transfer
service. A person that provides an electronic fund transfer service to a consumer but that does not hold the consumer’s account is subject to all requirements of this part if the person:
(1) Issues a debit card (or other access device) that the consumer can use
to access the consumer’s account held
by a financial institution; and
(2) Has no agreement with the account-holding institution regarding
such access.
(b) Compliance by service provider. In
addition to the requirements generally
applicable under this part, the service
provider shall comply with the following special rules:
(1) Disclosures and documentation. The
service provider shall give the disclosures and documentation required by

§§ 1005.7, 1005.8, and 1005.9 of this part
that are within the purview of its relationship with the consumer. The service provider need not furnish the periodic statement required by § 1005.9(b) if
the following conditions are met:
(i) The debit card (or other access device) issued to the consumer bears the
service provider’s name and an address
or telephone number for making inquiries or giving notice of error;
(ii) The consumer receives a notice
concerning use of the debit card that is
substantially similar to the notice contained in appendix A of this part;
(iii) The consumer receives, on or
with the receipts required by § 1005.9(a),
the address and telephone number to be
used for an inquiry, to give notice of an
error, or to report the loss or theft of
the debit card;
(iv) The service provider transmits to
the account-holding institution the information specified in § 1005.9(b)(1), in
the format prescribed by the automated clearinghouse (ACH) system
used to clear the fund transfers;
(v) The service provider extends the
time period for notice of loss or theft of
a debit card, set forth in § 1005.6(b)(1)
and (2), from two business days to four
business days after the consumer
learns of the loss or theft; and extends
the time periods for reporting unauthorized transfers or errors, set forth
in §§ 1005.6(b)(3) and 1005.11(b)(1)(i), from
60 days to 90 days following the transmittal of a periodic statement by the
account-holding institution.
(2) Error resolution. (i) The service
provider shall extend by a reasonable
time the period in which notice of an
error must be received, specified in
§ 1005.11(b)(1)(i), if a delay resulted from
an initial attempt by the consumer to
notify the account-holding institution.
(ii) The service provider shall disclose to the consumer the date on
which it initiates a transfer to effect a
provisional credit in accordance with
§ 1005.11(c)(2)(ii).
(iii) If the service provider determines an error occurred, it shall transfer funds to or from the consumer’s account, in the appropriate amount and
within the applicable time period, in
accordance with § 1005.11(c)(2)(i).

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(iv) If funds were provisionally credited and the service provider determines no error occurred, it may reverse
the credit. The service provider shall
notify the account-holding institution
of the period during which the accountholding institution must honor debits
to the account in accordance with
§ 1005.11(d)(2)(ii). If an overdraft results,
the service provider shall promptly reimburse the account-holding institution in the amount of the overdraft.
(c) Compliance by account-holding institution. The account-holding institution need not comply with the requirements of the Act and this part with respect to electronic fund transfers initiated through the service provider except as follows:
(1) Documentation. The account-holding institution shall provide a periodic
statement that describes each electronic fund transfer initiated by the
consumer with the access device issued
by the service provider. The accountholding institution has no liability for
the failure to comply with this requirement if the service provider did not
provide the necessary information; and
(2) Error resolution. Upon request, the
account-holding institution shall provide information or copies of documents needed by the service provider
to investigate errors or to furnish copies of documents to the consumer. The
account-holding institution shall also
honor debits to the account in accordance with § 1005.11(d)(2)(ii).
§ 1005.15 Electronic fund transfer of
government benefits.
(a) Government agency subject to regulation. (1) A government agency is
deemed to be a financial institution for
purposes of the Act and this part if directly or indirectly it issues an access
device to a consumer for use in initiating an electronic fund transfer of
government benefits from an account,
other than needs-tested benefits in a
program established under state or
local law or administered by a state or
local agency. The agency shall comply
with all applicable requirements of the
Act and this part, except as provided in
this section.
(2) For purposes of this section, the
term ‘‘account’’ means an account established by a government agency for

distributing government benefits to a
consumer
electronically,
such
as
through automated teller machines or
point-of-sale terminals, but does not
include an account for distributing
needs-tested benefits in a program established under state or local law or
administered by a state or local agency.
(b) Issuance of access devices. For purposes of this section, a consumer is
deemed to request an access device
when the consumer applies for government benefits that the agency disburses or will disburse by means of an
electronic fund transfer. The agency
shall verify the identity of the consumer receiving the device by reasonable means before the device is activated.
(c) Alternative to periodic statement. A
government agency need not furnish
the periodic statement required by
§ 1005.9(b) if the agency makes available
to the consumer:
(1) The consumer’s account balance,
through a readily available telephone
line and at a terminal (such as by providing balance information at a balance-inquiry terminal or providing it,
routinely or upon request, on a terminal receipt at the time of an electronic fund transfer); and
(2) 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 a
request by the consumer.
(d) Modified requirements. A government agency that does not furnish
periodic statements, in accordance
with paragraph (c) of this section, shall
comply with the following special
rules:
(1) Initial disclosures. The agency shall
modify the disclosures under § 1005.7(b)
by disclosing:
(i) Account balance. The means by
which the consumer may obtain information concerning the account balance, including a telephone number.
The agency provides a notice substantially similar to the notice contained
in paragraph A–5 in appendix A of this
part.
(ii) Written account history. A summary of the consumer’s right to receive

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a written account history upon request, in place of the periodic statement required by § 1005.7(b)(6), and the
telephone number to call to request an
account history. This disclosure may
be made by providing a notice substantially similar to the notice contained
in paragraph A–5 in appendix A of this
part.
(iii) Error resolution. A notice concerning error resolution that is substantially similar to the notice contained in paragraph A–5 in appendix A
of this part, in place of the notice required by § 1005.7(b)(10).
(2) Annual error resolution notice. The
agency shall provide an annual notice
concerning error resolution that is substantially similar to the notice contained in paragraph A–5 in appendix A,
in place of the notice required by
§ 1005.8(b).
(3) Limitations on liability. For purposes of § 1005.6(b)(3), regarding a 60-day
period for reporting any unauthorized
transfer that appears on a periodic
statement, the 60-day period shall
begin with transmittal of a written account history or other account information provided to the consumer under
paragraph (c) of this section.
(4) Error resolution. The agency shall
comply with the requirements of
§ 1005.11 of this part in response to an
oral or written notice of an error from
the consumer that is received no later
than 60 days after the consumer obtains the written account history or
other account information, under paragraph (c) of this section, in which the
error is first reflected.
§ 1005.16 Disclosures
at
automated
teller machines.
(a) Definition. ‘‘Automated teller machine operator’’ means any person that
operates an automated teller machine
at which a consumer initiates an electronic fund transfer or a balance inquiry and that does not hold the account to or from which the transfer is
made, or about which an inquiry is
made.
(b) General. An automated teller machine operator that imposes a fee on a
consumer for initiating an electronic
fund transfer or a balance inquiry must
provide a notice that a fee will be imposed for providing electronic fund

transfer services or a balance inquiry
that discloses the amount of the fee.
(c) Notice requirement. An automated
teller machine operator must provide
the notice required by paragraph (b) of
this section either by showing it on the
screen of the automated teller machine
or by providing it on paper, before the
consumer is committed to paying a fee.
(d) Imposition of fee. An automated
teller machine operator may impose a
fee on a consumer for initiating an
electronic fund transfer or a balance
inquiry only if:
(1) The consumer is provided the notice required under paragraph (c) of
this section, and
(2) The consumer elects to continue
the transaction or inquiry after receiving such notice.
[76 FR 81023, Dec. 27, 2011, as amended at 78
FR 18224, Mar. 26, 2013]

§ 1005.17 Requirements for overdraft
services.
(a) Definition. For purposes of this
section, the term ‘‘overdraft service’’
means a service under which a financial institution assesses a fee or charge
on a consumer’s account held by the
institution for paying a transaction
(including a check or other item) when
the consumer has insufficient or unavailable funds in the account. The
term ‘‘overdraft service’’ does not include any payment of overdrafts pursuant to:
(1) A line of credit subject to Regulation Z (12 CFR part 1026), including
transfers from a credit card account,
home equity line of credit, or overdraft
line of credit;
(2) A service that transfers funds
from another account held individually
or jointly by a consumer, such as a savings account; or
(3) A line of credit or other transaction exempt from Regulation Z (12
CFR part 1026) pursuant to 12 CFR
1026.3(d).
(b) Opt-in requirement—(1) General.
Except as provided under paragraph (c)
of this section, a financial institution
holding a consumer’s account shall not
assess a fee or charge on a consumer’s
account for paying an ATM or one-time
debit card transaction pursuant to the
institution’s overdraft service, unless
the institution:

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§ 1005.17

12 CFR Ch. X (1–1–16 Edition)

(i) Provides the consumer with a notice in writing, or if the consumer
agrees, electronically, segregated from
all other information, describing the
institution’s overdraft service;
(ii) Provides a reasonable opportunity for the consumer to affirmatively consent, or opt in, to the service
for ATM and one-time debit card transactions;
(iii) Obtains the consumer’s affirmative consent, or opt-in, to the institution’s payment of ATM or one-time
debit card transactions; and
(iv) Provides the consumer with confirmation of the consumer’s consent in
writing, or if the consumer agrees,
electronically, which includes a statement informing the consumer of the
right to revoke such consent.
(2) Conditioning payment of other overdrafts on consumer’s affirmative consent.
A financial institution shall not:
(i) Condition the payment of any
overdrafts for checks, ACH transactions, and other types of transactions on the consumer affirmatively
consenting to the institution’s payment of ATM and one-time debit card
transactions pursuant to the institution’s overdraft service; or
(ii) Decline to pay checks, ACH
transactions, and other types of transactions that overdraw the consumer’s
account because the consumer has not
affirmatively consented to the institution’s overdraft service for ATM and
one-time debit card transactions.
(3) Same account terms, conditions, and
features. A financial institution shall
provide to consumers who do not affirmatively consent to the institution’s
overdraft service for ATM and onetime debit card transactions the same
account terms, conditions, and features
that it provides to consumers who affirmatively consent, except for the
overdraft service for ATM and onetime debit card transactions.
(c) Timing—(1) Existing account holders. For accounts opened prior to July
1, 2010, the financial institution must
not assess any fees or charges on a consumer’s account on or after August 15,
2010, for paying an ATM or one-time
debit card transaction pursuant to the
overdraft service, unless the institution has complied with § 1005.17(b)(1)

and obtained the consumer’s affirmative consent.
(2) New account holders. For accounts
opened on or after July 1, 2010, the financial institution must comply with
§ 1005.17(b)(1) and obtain the consumer’s
affirmative consent before the institution assesses any fee or charge on the
consumer’s account for paying an ATM
or one-time debit card transaction pursuant to the institution’s overdraft
service.
(d) Content and format. The notice required by paragraph (b)(1)(i) of this section shall be substantially similar to
Model Form A–9 set forth in appendix
A of this part, include all applicable
items in this paragraph, and may not
contain any information not specified
in or otherwise permitted by this paragraph.
(1) Overdraft service. A brief description of the financial institution’s overdraft service and the types of transactions for which a fee or charge for
paying an overdraft may be imposed,
including ATM and one-time debit card
transactions.
(2) Fees imposed. The dollar amount of
any fees or charges assessed by the financial institution for paying an ATM
or one-time debit card transaction pursuant to the institution’s overdraft
service, including any daily or other
overdraft fees. If the amount of the fee
is determined on the basis of the number of times the consumer has overdrawn the account, the amount of the
overdraft, or other factors, the institution must disclose the maximum fee
that may be imposed.
(3) Limits on fees charged. The maximum number of overdraft fees or
charges that may be assessed per day,
or, if applicable, that there is no limit.
(4) Disclosure of opt-in right. An explanation of the consumer’s right to affirmatively consent to the financial institution’s payment of overdrafts for
ATM and one-time debit card transactions pursuant to the institution’s
overdraft service, including the methods by which the consumer may consent to the service; and
(5) Alternative plans for covering overdrafts. If the institution offers a line of
credit subject to Regulation Z (12 CFR
part 1026) or a service that transfers

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Bur. of Consumer Financial Protection

§ 1005.18

funds from another account of the consumer held at the institution to cover
overdrafts, the institution must state
that fact. An institution may, but is
not required to, list additional alternatives for the payment of overdrafts.
(6) Permitted modifications and additional content. If applicable, the institution may modify the content required
by § 1005.17(d) to indicate that the consumer has the right to opt into, or opt
out of, the payment of overdrafts under
the institution’s overdraft service for
other types of transactions, such as
checks, ACH transactions, or automatic bill payments; to provide a
means for the consumer to exercise
this choice; and to disclose the associated returned item fee and that additional merchant fees may apply. The
institution may also disclose the consumer’s right to revoke consent. For
notices provided to consumers who
have opened accounts prior to July 1,
2010, the financial institution may describe the institution’s overdraft service with respect to ATM and one-time
debit card transactions with a statement such as ‘‘After August 15, 2010, we
will not authorize and pay overdrafts
for the following types of transactions
unless you ask us to (see below).’’
(e) Joint relationships. If two or more
consumers jointly hold an account, the
financial institution shall treat the affirmative consent of any of the joint
consumers as affirmative consent for
that account. Similarly, the financial
institution shall treat a revocation of
affirmative consent by any of the joint
consumers as revocation of consent for
that account.
(f) Continuing right to opt in or to revoke the opt-in. A consumer may affirmatively consent to the financial institution’s overdraft service at any
time in the manner described in the notice required by paragraph (b)(1)(i) of
this section. A consumer may also revoke consent at any time in the manner made available to the consumer for
providing consent. A financial institution must implement a consumer’s revocation of consent as soon as reasonably practicable.
(g) Duration and revocation of opt-in.
A consumer’s affirmative consent to
the institution’s overdraft service is effective until revoked by the consumer,

or unless the financial institution terminates the service.
§ 1005.18 Requirements for financial
institutions offering payroll card
accounts.
(a) Coverage. A financial institution
shall comply with all applicable requirements of the Act and this part
with respect to payroll card accounts
except as provided in this section.
(b) Alternative to periodic statements.
(1) A financial institution need not furnish periodic statements required by
§ 1005.9(b) if the institution makes
available to the consumer:
(i) The consumer’s account balance,
through a readily available telephone
line;
(ii) An electronic history of the consumer’s account transactions, such as
through a Web site, that covers at least
60 days preceding the date the consumer electronically accesses the account; and
(iii) 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 the
financial institution receives the consumer’s request.
(2) The history of account transactions provided under paragraphs
(b)(1)(ii) and (iii) of this section must
include the information set forth in
§ 1005.9(b).
(c) Modified requirements. A financial
institution that provides information
under paragraph (b) of this section,
shall comply with the following:
(1) Initial disclosures. The financial institution shall modify the disclosures
under § 1005.7(b) by disclosing:
(i) Account information. 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 a Web site, and 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 required by § 1005.7(b)(6)), including a
telephone number to call to request a
history. The disclosure required by this
paragraph (c)(1)(i) may be made by providing a notice substantially similar to

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§ 1005.20

12 CFR Ch. X (1–1–16 Edition)

the notice contained in paragraph A–
7(a) in appendix A of this part.
(ii) Error resolution. A notice concerning error resolution that is substantially similar to the notice contained in paragraph A–7(b) in appendix
A of this part, in place of the notice required by § 1005.7(b)(10).
(2) Annual error resolution notice. The
financial institution shall provide an
annual notice concerning error resolution that is substantially similar to
the notice contained in paragraph A–
7(b) in appendix A of this part, in place
of the notice required by § 1005.8(b). Alternatively, a financial institution
may include on or with each electronic
and written history provided in accordance with § 1005.18(b)(1), a notice substantially similar to the abbreviated
notice for periodic statements contained in paragraph A–3(b) in appendix
A of this part, modified as necessary to
reflect the error resolution provisions
set forth in this section.
(3) Limitations on liability. (i) For purposes of § 1005.6(b)(3), the 60-day period
for reporting any unauthorized transfer
shall begin on the earlier of:
(A) The date the consumer electronically accesses the consumer’s account
under paragraph (b)(1)(ii) of this section, provided that the electronic history made available to the consumer
reflects the transfer; or
(B) The date the financial institution
sends a written history of the consumer’s account transactions requested
by the consumer under paragraph
(b)(1)(iii) of this section in which the
unauthorized transfer is first reflected.
(ii) A financial institution may comply with paragraph (c)(3)(i) of this section by limiting the consumer’s liability for an unauthorized transfer as provided under § 1005.6(b)(3) for any transfer reported by the consumer within 120
days after the transfer was credited or
debited to the consumer’s account.
(4) Error resolution. (i) The financial
institution shall comply with the requirements of § 1005.11 in response to an
oral or written notice of an error from
the consumer that is received by the
earlier of:
(A) Sixty days after the date the consumer electronically accesses the consumer’s account under paragraph
(b)(1)(ii) of this section, provided that

the electronic history made available
to the consumer reflects the alleged
error; or
(B) Sixty days after the date the financial institution sends a written history of the consumer’s account transactions requested by the consumer
under paragraph (b)(1)(iii) of this section in which the alleged error is first
reflected.
(ii) In lieu of following the procedures in paragraph (c)(4)(i) of this section, a financial institution complies
with the requirements for resolving errors in § 1005.11 if it investigates any
oral or written notice of an error from
the consumer that is received by the
institution within 120 days after the
transfer allegedly in error was credited
or debited to the consumer’s account.
§ 1005.20 Requirements for gift cards
and gift certificates.
(a) Definitions. For purposes of this
section, except as excluded under paragraph (b), the following definitions
apply:
(1) ‘‘Gift certificate’’ means a card,
code, or other device that is:
(i) Issued on a prepaid basis primarily
for personal, family, or household purposes to a consumer in a specified
amount that may not be increased or
reloaded in exchange for payment; and
(ii) Redeemable upon presentation at
a single merchant or an affiliated
group of merchants for goods or services.
(2) ‘‘Store gift card’’ means a card,
code, or other device that is:
(i) Issued on a prepaid basis primarily
for personal, family, or household purposes to a consumer in a specified
amount, whether or not that amount
may be increased or reloaded, in exchange for payment; and
(ii) Redeemable upon presentation at
a single merchant or an affiliated
group of merchants for goods or services.
(3) ‘‘General-use prepaid card’’ means
a card, code, or other device that is:
(i) Issued on a prepaid basis primarily
for personal, family, or household purposes to a consumer in a specified
amount, whether or not that amount
may be increased or reloaded, in exchange for payment; and

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Bur. of Consumer Financial Protection

§ 1005.20

(ii) Redeemable upon presentation at
multiple, unaffiliated merchants for
goods or services, or usable at automated teller machines.
(4) ‘‘Loyalty, award, or promotional
gift card’’ means a card, code, or other
device that:
(i) Is issued on a prepaid basis primarily for personal, family, or household purposes to a consumer in connection with a loyalty, award, or promotional program;
(ii) Is redeemable upon presentation
at one or more merchants for goods or
services, or usable at automated teller
machines; and
(iii) Sets forth the following disclosures, as applicable:
(A) A statement indicating that the
card, code, or other device is issued for
loyalty, award, or promotional purposes, which must be included on the
front of the card, code, or other device;
(B) The expiration date for the underlying funds, which must be included on
the front of the card, code, or other device;
(C) The amount of any fees that may
be imposed in connection with the
card, code, or other device, and the
conditions under which they may be
imposed, which must be provided on or
with the card, code, or other device;
and
(D) A toll-free telephone number and,
if one is maintained, a Web site, that a
consumer may use to obtain fee information, which must be included on the
card, code, or other device.
(5) Dormancy or inactivity fee. The
terms ‘‘dormancy fee’’ and ‘‘inactivity
fee’’ mean a fee for non-use of or inactivity on a gift certificate, store gift
card, or general-use prepaid card.
(6) Service fee. The term ‘‘service fee’’
means a periodic fee for holding or use
of a gift certificate, store gift card, or
general-use prepaid card. A periodic fee
includes any fee that may be imposed
on a gift certificate, store gift card, or
general-use prepaid card from time to
time for holding or using the certificate or card.
(7) Activity. The term ‘‘activity’’
means any action that results in an increase or decrease of the funds underlying a certificate or card, other than
the imposition of a fee, or an adjust-

ment due to an error or a reversal of a
prior transaction.
(b) Exclusions. The terms ‘‘gift certificate,’’ ‘‘store gift card,’’ and ‘‘general-use prepaid card’’, as defined in
paragraph (a) of this section, do not include any card, code, or other device
that is:
(1) Useable solely for telephone services;
(2) Reloadable and not marketed or
labeled as a gift card or gift certificate.
For purposes of this paragraph (b)(2),
the term ‘‘reloadable’’ includes a temporary non-reloadable card issued solely in connection with a reloadable
card, code, or other device;
(3) A loyalty, award, or promotional
gift card;
(4) Not marketed to the general public;
(5) Issued in paper form only; or
(6) Redeemable solely for admission
to events or venues at a particular location or group of affiliated locations,
or to obtain goods or services in conjunction with admission to such events
or venues, either at the event or venue
or at specific locations affiliated with
and in geographic proximity to the
event or venue.
(c) Form of disclosures—(1) Clear and
conspicuous. Disclosures made under
this section must be clear and conspicuous. The disclosures may contain
commonly accepted or readily understandable abbreviations or symbols.
(2) Format. Disclosures made under
this section generally must be provided
to the consumer in written or electronic form. Except for the disclosures
in paragraphs (c)(3) and (h)(2) of this
section, written and electronic disclosures made under this section must be
in a retainable form. Only disclosures
provided under paragraphs (c)(3) and
(h)(2) may be given orally.
(3) Disclosures prior to purchase. Before a gift certificate, store gift card,
or general-use prepaid card is purchased, a person that issues or sells
such certificate or card must disclose
to the consumer the information required by paragraphs (d)(2), (e)(3), and
(f)(1) of this section. The fees and terms
and conditions of expiration that are
required to be disclosed prior to purchase may not be changed after purchase.

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§ 1005.20

12 CFR Ch. X (1–1–16 Edition)

(4) Disclosures on the certificate or
card. Disclosures required by paragraphs (a)(4)(iii), (d)(2), (e)(3), and (f)(2)
of this section must be made on the
certificate or card, or in the case of a
loyalty, award, or promotional gift
card, on the card, code, or other device.
A disclosure made in an accompanying
terms and conditions document, on
packaging surrounding a certificate or
card, or on a sticker or other label affixed to the certificate or card does not
constitute a disclosure on the certificate or card. For an electronic certificate or card, disclosures must be provided electronically on the certificate
or card provided to the consumer. An
issuer that provides a code or confirmation to a consumer orally must
provide to the consumer a written or
electronic copy of the code or confirmation promptly, and the applicable
disclosures must be provided on the
written copy of the code or confirmation.
(d) Prohibition on imposition of fees or
charges. No person may impose a dormancy, inactivity, or service fee with
respect to a gift certificate, store gift
card, or general-use prepaid card, unless:
(1) There has been no activity with
respect to the certificate or card, in
the one-year period ending on the date
on which the fee is imposed;
(2) The following are stated, as applicable, clearly and conspicuously on the
gift certificate, store gift card, or general-use prepaid card:
(i) The amount of any dormancy, inactivity, or service fee that may be
charged;
(ii) How often such fee may be assessed; and
(iii) That such fee may be assessed
for inactivity; and
(3) Not more than one dormancy, inactivity, or service fee is imposed in
any given calendar month.
(e) Prohibition on sale of gift certificates or cards with expiration dates. No
person may sell or issue a gift certificate, store gift card, or general-use prepaid card with an expiration date, unless:
(1) The person has established policies and procedures to provide consumers with a reasonable opportunity
to purchase a certificate or card with

at least five years remaining until the
certificate or card expiration date;
(2) The expiration date for the underlying funds is at least the later of:
(i) Five years after the date the gift
certificate was initially issued, or the
date on which funds were last loaded to
a store gift card or general-use prepaid
card; or
(ii) The certificate or card expiration
date, if any;
(3) The following disclosures are provided on the certificate or card, as applicable:
(i) The expiration date for the underlying funds or, if the underlying funds
do not expire, that fact;
(ii) A toll-free telephone number and,
if one is maintained, a Web site that a
consumer may use to obtain a replacement certificate or card after the certificate or card expires if the underlying funds may be available; and
(iii) Except where a non-reloadable
certificate or card bears an expiration
date that is at least seven years from
the date of manufacture, a statement,
disclosed with equal prominence and in
close proximity to the certificate or
card expiration date, that:
(A) The certificate or card expires,
but the underlying funds either do not
expire or expire later than the certificate or card, and;
(B) The consumer may contact the
issuer for a replacement card; and
(4) No fee or charge is imposed on the
cardholder for replacing the gift certificate, store gift card, or general-use
prepaid card or for providing the certificate or card holder with the remaining balance in some other manner prior
to the funds expiration date, unless
such certificate or card has been lost or
stolen.
(f) Additional disclosure requirements
for gift certificates or cards. The following disclosures must be provided in
connection with a gift certificate, store
gift card, or general-use prepaid card,
as applicable:
(1) Fee disclosures. For each type of
fee that may be imposed in connection
with the certificate or card (other than
a dormancy, inactivity, or service fee
subject to the disclosure requirements
under paragraph (d)(2) of this section),
the following information must be provided on or with the certificate or card:

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Bur. of Consumer Financial Protection

§ 1005.30

(i) The type of fee;
(ii) The amount of the fee (or an explanation of how the fee will be determined); and
(iii) The conditions under which the
fee may be imposed.
(2) Telephone number for fee information. A toll-free telephone number and,
if one is maintained, a Web site, that a
consumer may use to obtain information about fees described in paragraphs
(d)(2) and (f)(1) of this section must be
disclosed on the certificate or card.
(g) Compliance dates—(1) Effective date
for gift certificates, store gift cards, and
general-use prepaid cards. Except as provided in paragraph (h) of this section,
the requirements of this section apply
to any gift certificate, store gift card,
or general-use prepaid card sold to a
consumer on or after August 22, 2010, or
provided to a consumer as a replacement for such certificate or card.
(2) Effective date for loyalty, award, or
promotional gift cards. The requirements
in paragraph (a)(4)(iii) of this section
apply to any card, code, or other device
provided to a consumer in connection
with a loyalty, award, or promotional
program if the period of eligibility for
such program began on or after August
22, 2010.
(h) Temporary exemption—(1) Delayed
mandatory compliance date. For any gift
certificate, store gift card, or generaluse prepaid card produced prior to
April 1, 2010, the mandatory compliance date of the requirements of paragraphs (c)(3), (d)(2), (e)(1), (e)(3), and (f)
of this section is January 31, 2011, provided that an issuer of such certificate
or card:
(i) Complies with all other provisions
of this section;
(ii) Does not impose an expiration
date with respect to the funds underlying such certificate or card;
(iii) At the consumer’s request, replaces such certificate or card if it has
funds remaining at no cost to the consumer; and
(iv) Satisfies the requirements of
paragraph (h)(2) of this section.
(2) Additional disclosures. Issuers relying on the delayed effective date in
§ 1005.20(h)(1) must disclose through instore signage, messages during customer service calls, Web sites, and general advertising, that:

(i) The underlying funds of such certificate or card do not expire;
(ii) Consumers holding such certificate or card have a right to a free replacement certificate or card, which
must be accompanied by the packaging
and materials typically associated with
such certificate or card; and
(iii) Any dormancy, inactivity, or
service fee for such certificate or card
that might otherwise be charged will
not be charged if such fees do not comply with section 916 of the Act.
(3) Expiration of additional disclosure
requirements. The disclosures in paragraph (h)(2) of this section:
(i) Are not required to be provided on
or after January 31, 2011, with respect
to in-store signage and general advertising.
(ii) Are not required to be provided
on or after January 31, 2013, with respect to messages during customer
service calls and Web sites.

Subpart B—Requirements for
Remittance Transfers
SOURCE: 77 FR 6285, Feb. 7, 2012, unless otherwise noted.

§ 1005.30 Remittance transfer definitions.
Except as otherwise provided, for
purposes of this subpart, the following
definitions apply:
(a) ‘‘Agent’’ means an agent, authorized delegate, or person affiliated with
a remittance transfer provider, as defined under State or other applicable
law, when such agent, authorized delegate, or affiliate acts for that remittance transfer provider.
(b) ‘‘Business day’’ means any day on
which the offices of a remittance transfer provider are open to the public for
carrying on substantially all business
functions.
(c) ‘‘Designated recipient’’ means any
person specified by the sender as the
authorized recipient of a remittance
transfer to be received at a location in
a foreign country.
(d) ‘‘Preauthorized remittance transfer’’ means a remittance transfer authorized in advance to recur at substantially regular intervals.
(e) Remittance transfer—(1) General
definition. A ‘‘remittance transfer’’

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§ 1005.31

12 CFR Ch. X (1–1–16 Edition)

means the electronic transfer of funds
requested by a sender to a designated
recipient that is sent by a remittance
transfer provider. The term applies regardless of whether the sender holds an
account with the remittance transfer
provider, and regardless of whether the
transaction is also an electronic fund
transfer, as defined in § 1005.3(b).
(2) Exclusions from coverage. The term
‘‘remittance transfer’’ does not include:
(i) Small value transactions. Transfer
amounts,
as
described
in
§ 1005.31(b)(1)(i), of $15 or less.
(ii) Securities and commodities transfers. Any transfer that is excluded from
the definition of electronic fund transfer under § 1005.3(c)(4).
(f) Remittance transfer provider—(1)
General definition. ‘‘Remittance transfer provider’’ or ‘‘provider’’ means any
person that provides remittance transfers for a consumer in the normal
course of its business, regardless of
whether the consumer holds an account with such person.
(2) Normal course of business—(i) Safe
harbor. For purposes of paragraph (f)(1)
of this section, a person is deemed not
to be providing remittance transfers
for a consumer in the normal course of
its business if the person:
(A) Provided 100 or fewer remittance
transfers in the previous calendar year;
and
(B) Provides 100 or fewer remittance
transfers in the current calendar year.
(ii) Transition period. If a person that
provided 100 or fewer remittance transfers in the previous calendar year provides more than 100 remittance transfers in the current calendar year, and if
that person is then providing remittance transfers for a consumer in the
normal course of its business pursuant
to paragraph (f)(1) of this section, the
person has a reasonable period of time,
not to exceed six months, to begin
complying with this subpart. Compliance with this subpart will not be required for any remittance transfers for
which payment is made during that
reasonable period of time.
(g) ‘‘Sender’’ means a consumer in a
State who primarily for personal, family, or household purposes requests a
remittance transfer provider to send a

remittance transfer to a designated recipient.
(h) Third-party fees. (1) ‘‘Covered
third-party fees.’’ The term ‘‘covered
third-party fees’’ means any fees imposed on the remittance transfer by a
person other than the remittance
transfer provider except for fees described in paragraph (h)(2) of this section.
(2) ‘‘Non-covered third-party fees.’’
The term ‘‘non-covered third-party
fees’’ means any fees imposed by the
designated recipient’s institution for
receiving a remittance transfer into an
account except if the institution acts
as an agent of the remittance transfer
provider.
[77 FR 6285, Feb. 7, 2012, as amended at 77 FR
50282, Aug. 20, 2012; 78 FR 30703, May 22, 2013]

§ 1005.31

Disclosures.

(a) General form of disclosures—(1)
Clear and conspicuous. Disclosures required by this subpart or permitted by
paragraph (b)(1)(viii) of this section or
§ 1005.33(h)(3) must be clear and conspicuous. Disclosures required by this
subpart or permitted by paragraph
(b)(1)(viii)
of
this
section
or
§ 1005.33(h)(3) may contain commonly
accepted or readily understandable abbreviations or symbols.
(2) Written and electronic disclosures.
Disclosures required by this subpart
generally must be provided to the sender in writing. Disclosures required by
paragraph (b)(1) of this section may be
provided electronically, if the sender
electronically requests the remittance
transfer provider to send the remittance transfer. Written and electronic
disclosures required by this subpart
generally must be made in a retainable
form. Disclosures provided via mobile
application or text message, to the extent permitted by paragraph (a)(5) of
this section, need not be retainable.
(3) Disclosures for oral telephone transactions. The information required by
paragraph (b)(1) of this section may be
disclosed orally if:
(i) The transaction is conducted orally and entirely by telephone;
(ii) The remittance transfer provider
complies with the requirements of
paragraph (g)(2) of this section;

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Bur. of Consumer Financial Protection

§ 1005.31

(iii) The provider discloses orally a
statement about the rights of the sender regarding cancellation required by
paragraph (b)(2)(iv) of this section pursuant to the timing requirements in
paragraph (e)(1) of this section; and
(iv) The provider discloses orally, as
each is applicable, the information required by paragraph (b)(2)(vii) of this
section and the information required
by § 1005.36(d)(1)(i)(A), with respect to
transfers subject to § 1005.36(d)(2)(ii),
pursuant to the timing requirements in
paragraph (e)(1) of this section.
(4) Oral disclosures for certain error resolution notices. The information required by § 1005.33(c)(1) may be disclosed orally if:
(i) The remittance transfer provider
determines that an error occurred as
described by the sender; and
(ii) The remittance transfer provider
complies with the requirements of
paragraph (g)(2) of this section.
(5) Disclosures for mobile application or
text message transactions. The information required by paragraph (b)(1) of this
section may be disclosed orally or via
mobile application or text message if:
(i) The transaction is conducted entirely by telephone via mobile application or text message;
(ii) The remittance transfer provider
complies with the requirements of
paragraph (g)(2) of this section;
(iii) The provider discloses orally or
via mobile application or text message
a statement about the rights of the
sender regarding cancellation required
by paragraph (b)(2)(iv) of this section
pursuant to the timing requirements in
paragraph (e)(1) of this section; and
(iv) The provider discloses orally or
via mobile application or text message,
as each is applicable, the information
required by paragraph (b)(2)(vii) of this
section and the information required
by § 1005.36(d)(1)(i)(A), with respect to
transfers subject to § 1005.36(d)(2)(ii),
pursuant to the timing requirements in
paragraph (e)(1) of this section.
(b) Disclosure requirements—(1) Prepayment disclosure. A remittance transfer provider must disclose to a sender,
as applicable:
(i) The amount that will be transferred to the designated recipient, in
the currency in which the remittance
transfer is funded, using the term

‘‘Transfer Amount’’ or a substantially
similar term;
(ii) Any fees imposed and any taxes
collected on the remittance transfer by
the provider, in the currency in which
the remittance transfer is funded,
using the terms ‘‘Transfer Fees’’ for
fees and ‘‘Transfer Taxes’’ for taxes, or
substantially similar terms;
(iii) The total amount of the transaction, which is the sum of paragraphs
(b)(1)(i) and (ii) of this section, in the
currency in which the remittance
transfer is funded, using the term
‘‘Total’’ or a substantially similar
term;
(iv) The exchange rate used by the
provider for the remittance transfer,
rounded consistently for each currency
to no fewer than two decimal places
and no more than four decimal places,
using the term ‘‘Exchange Rate’’ or a
substantially similar term;
(v) The amount in paragraph (b)(1)(i)
of this section, in the currency in
which the funds will be received by the
designated recipient, but only if covered third-party fees are imposed under
paragraph (b)(1)(vi) of this section,
using the term ‘‘Transfer Amount’’ or
a substantially similar term. The exchange rate used to calculate this
amount is the exchange rate in paragraph (b)(1)(iv) of this section, including an estimated exchange rate to the
extent permitted by § 1005.32, prior to
any rounding of the exchange rate;
(vi) Any covered third-party fees, in
the currency in which the funds will be
received by the designated recipient,
using the term ‘‘Other Fees,’’ or a substantially similar term. The exchange
rate used to calculate any covered
third-party fees is the exchange rate in
paragraph (b)(1)(iv) of this section, including an estimated exchange rate to
the extent permitted by § 1005.32, prior
to any rounding of the exchange rate;
(vii) The amount that will be received by the designated recipient, in
the currency in which the funds will be
received, using the term ‘‘Total to Recipient’’ or a substantially similar
term except that this amount shall not
include non-covered third party fees or
taxes collected on the remittance
transfer by a person other than the
provider regardless of whether such
fees or taxes are disclosed pursuant to

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§ 1005.31

12 CFR Ch. X (1–1–16 Edition)

paragraph (b)(1)(viii) of this section.
The exchange rate used to calculate
this amount is the exchange rate in
paragraph (b)(1)(iv) of this section, including an estimated exchange rate to
the extent permitted by § 1005.32, prior
to any rounding of the exchange rate.
(viii) A statement indicating that
non-covered third-party fees or taxes
collected on the remittance transfer by
a person other than the provider may
apply to the remittance transfer and
result in the designated recipient receiving less than the amount disclosed
pursuant to paragraph (b)(1)(vii) of this
section. A provider may only include
this statement to the extent that such
fees or taxes do or may apply to the
transfer, using the language set forth
in Model Forms A–30(a) through (c) of
Appendix A to this part, as appropriate, or substantially similar language. In this statement, a provider
also may, but is not required, to disclose any applicable non-covered thirdparty fees or taxes collected by a person other than the provider. Any such
figure must be disclosed in the currency in which the funds will be received, using the language set forth in
Model Forms A–30(b) through (d) of Appendix A to this part, as appropriate,
or substantially similar language. The
exchange rate used to calculate any
disclosed non-covered third-party fees
or taxes collected on the remittance
transfer by a person other than the
provider is the exchange rate in paragraph (b)(1)(iv) of this section, including an estimated exchange rate to the
extent permitted by § 1005.32, prior to
any rounding of the exchange rate;
(2) Receipt. A remittance transfer provider must disclose to a sender, as applicable:
(i) The disclosures described in paragraphs (b)(1)(i) through (viii) of this
section;
(ii) The date in the foreign country
on which funds will be available to the
designated recipient, using the term
‘‘Date Available’’ or a substantially
similar term. A provider may provide a
statement that funds may be available
to the designated recipient earlier than
the date disclosed, using the term
‘‘may be available sooner’’ or a substantially similar term;

(iii) The name and, if provided by the
sender, the telephone number and/or
address of the designated recipient,
using the term ‘‘Recipient’’ or a substantially similar term;
(iv) A statement about the rights of
the sender regarding the resolution of
errors and cancellation, using language
set forth in Model Form A–37 of Appendix A to this part or substantially
similar language. For any remittance
transfer scheduled by the sender at
least three business days before the
date of the transfer, the statement
about the rights of the sender regarding cancellation must instead reflect
the requirements of § 1005.36(c);
(v) The name, telephone number(s),
and Web site of the remittance transfer
provider;
(vi) A statement that the sender can
contact the State agency that licenses
or charters the remittance transfer
provider with respect to the remittance
transfer and the Consumer Financial
Protection Bureau for questions or
complaints about the remittance transfer provider, using language set forth
in Model Form A–37 of Appendix A to
this part or substantially similar language. The disclosure must provide the
name, telephone number(s), and Web
site of the State agency that licenses
or charters the remittance transfer
provider with respect to the remittance
transfer and the name, toll-free telephone number(s), and Web site of the
Consumer Financial Protection Bureau; and
(vii) For any remittance transfer
scheduled by the sender at least three
business days before the date of the
transfer, or the first transfer in a series
of preauthorized remittance transfers,
the date the remittance transfer provider will make or made the remittance transfer, using the term ‘‘Transfer Date,’’ or a substantially similar
term.
(3) Combined disclosure—(i) In general.
As an alternative to providing the disclosures described in paragraph (b)(1)
and (2) of this section, a remittance
transfer provider may provide the disclosures described in paragraph (b)(2)
of this section, as applicable, in a single disclosure pursuant to the timing
requirements in paragraph (e)(1) of this

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Bur. of Consumer Financial Protection

§ 1005.31

section. Except as provided in paragraph (b)(3)(ii) of this section, if the remittance transfer provider provides the
combined disclosure and the sender
completes the transfer, the remittance
transfer provider must provide the
sender with proof of payment when
payment is made for the remittance
transfer. The proof of payment must be
clear and conspicuous, provided in
writing or electronically, and provided
in a retainable form.
(ii) Transfers scheduled before the date
of transfer. If the disclosure described
in paragraph (b)(3)(i) of this section is
provided
in
accordance
with
§ 1005.36(a)(1)(i) and payment is not
processed by the remittance transfer
provider at the time the remittance
transfer is scheduled, a remittance
transfer provider may provide confirmation that the transaction has
been scheduled in lieu of the proof of
payment otherwise required by paragraph (b)(3)(i) of this section. The confirmation of scheduling must be clear
and conspicuous, provided in writing or
electronically, and provided in a
retainable form.
(4) Long form error resolution and cancellation notice. Upon the sender’s request, a remittance transfer provider
must promptly provide to the sender a
notice describing the sender’s error resolution and cancellation rights, using
language set forth in Model Form A–36
of Appendix A to this part or substantially similar language. For any remittance transfer scheduled by the sender
at least three business days before the
date of the transfer, the description of
the rights of the sender regarding cancellation must instead reflect the requirements of § 1005.36(c).
(c) Specific format requirements—(1)
Grouping. The information required by
paragraphs (b)(1)(i), (ii), and (iii) of this
section generally must be grouped together. The information required by
paragraphs (b)(1)(v), (vi), (vii), and
(viii) of this section generally must be
grouped together. Disclosures provided
via mobile application or text message,
to the extent permitted by paragraph
(a)(5) of this section, generally need
not comply with the grouping requirements of this paragraph, however information required or permitted by paragraph (b)(1)(viii) of this section must

be grouped with information required
by paragraph (b)(1)(vii) of this section.
(2) Proximity. The information required by paragraph (b)(1)(iv) of this
section generally must be disclosed in
close proximity to the other information required by paragraph (b)(1) of this
section. The information required by
paragraph (b)(2)(iv) of this section generally must be disclosed in close proximity to the other information required by paragraph (b)(2) of this section. The information required or permitted by paragraph (b)(1)(viii) must
be in close proximity to the information required by paragraph (b)(1)(vii) of
this section. Disclosures provided via
mobile application or text message, to
the extent permitted by paragraph
(a)(5) of this section, generally need
not comply with the proximity requirements of this paragraph, however information required or permitted by paragraph (b)(1)(viii) of this section must
follow the information required by
paragraph (b)(1)(vii) of this section.
(3) Prominence and size. Written disclosures required by this subpart or
permitted by paragraph (b)(1)(viii) of
this section must be provided on the
front of the page on which the disclosure is printed. Disclosures required by
this subpart or permitted by paragraph
(b)(1)(viii) of this section that are provided in writing or electronically must
be in a minimum eight-point font, except for disclosures provided via mobile
application or text message, to the extent permitted by paragraph (a)(5) of
this section. Disclosures required by
paragraph (b) of this section or permitted by paragraph (b)(1)(viii) of this
section that are provided in writing or
electronically must be in equal prominence to each other.
(4) Segregation. Except for disclosures
provided via mobile application or text
message, to the extent permitted by
paragraph (a)(5) of this section, disclosures required by this subpart that are
provided in writing or electronically
must be segregated from everything
else and must contain only information
that is directly related to the disclosures required under this subpart.
(d) Estimates. Estimated disclosures
may be provided to the extent permitted by § 1005.32. Estimated disclosures must be described using the term

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§ 1005.32

12 CFR Ch. X (1–1–16 Edition)

‘‘Estimated’’ or a substantially similar
term in close proximity to the estimated term or terms.
(e) Timing. (1) Except as provided in
§ 1005.36(a), a pre-payment disclosure
required by paragraph (b)(1) of this section or a combined disclosure required
by paragraph (b)(3) of this section must
be provided to the sender when the
sender requests the remittance transfer, but prior to payment for the transfer.
(2) Except as provided in § 1005.36(a), a
receipt required by paragraph (b)(2) of
this section generally must be provided
to the sender when payment is made
for the remittance transfer. If a transaction is conducted entirely by telephone, a receipt required by paragraph
(b)(2) of this section may be mailed or
delivered to the sender no later than
one business day after the date on
which payment is made for the remittance transfer. If a transaction is conducted entirely by telephone and involves the transfer of funds from the
sender’s account held by the provider,
the receipt required by paragraph (b)(2)
of this section may be provided on or
with the next regularly scheduled periodic statement for that account or
within 30 days after payment is made
for the remittance transfer if a periodic statement is not provided. The
statement about the rights of the sender regarding cancellation required by
paragraph (b)(2)(iv) of this section
may, but need not, be disclosed pursuant to the timing requirements of this
paragraph if a provider discloses this
information pursuant to paragraphs
(a)(3)(iii) or (a)(5)(iii) of this section.
(f) Accurate when payment is made. Except as provided in § 1005.36(b), disclosures required by this section or permitted by paragraph (b)(1)(viii) of this
section must be accurate when a sender
makes payment for the remittance
transfer, except to the extent estimates are permitted by § 1005.32.
(g) Foreign language disclosures—(1)
General. Except as provided in paragraph (g)(2) of this section, disclosures
required by this subpart or permitted
by paragraph (b)(1)(viii) of this section
or § 1005.33(h)(3) must be made in
English and, if applicable, either in:
(i) Each of the foreign languages
principally used by the remittance

transfer provider to advertise, solicit,
or market remittance transfer services,
either orally, in writing, or electronically, at the office in which a sender
conducts a transaction or asserts an
error; or
(ii) The foreign language primarily
used by the sender with the remittance
transfer provider to conduct the transaction (or for written or electronic disclosures made pursuant to § 1005.33, in
the foreign language primarily used by
the sender with the remittance transfer provider to assert the error), provided that such foreign language is
principally used by the remittance
transfer provider to advertise, solicit,
or market remittance transfer services,
either orally, in writing, or electronically, at the office in which a sender
conducts a transaction or asserts an
error, respectively.
(2) Oral, mobile application, or text message disclosures. Disclosures provided
orally for transactions conducted orally and entirely by telephone under
paragraph (a)(3) of this section or orally or via mobile application or text
message for transactions conducted via
mobile application or text message
under paragraph (a)(5) of this section
shall be made in the language primarily used by the sender with the remittance transfer provider to conduct
the transaction. Disclosures provided
orally under paragraph (a)(4) of this
section for error resolution purposes
shall be made in the language primarily used by the sender with the remittance transfer provider to assert
the error.
[77 FR 6285, Feb. 7, 2012, as amended at 77 FR
50282, Aug. 20, 2012; 77 FR 30703, May 22, 2013]

§ 1005.32

Estimates.

(a) Temporary exception for insured institutions—(1) General. For disclosures
described in §§ 1005.31(b)(1) through (3)
and 1005.36(a)(1) and (2), estimates may
be provided in accordance with paragraph (c) of this section for the
amounts required to be disclosed under
§ 1005.31(b)(1)(iv) through (vii), if:
(i) A remittance transfer provider
cannot determine the exact amounts
for reasons beyond its control;
(ii) A remittance transfer provider is
an insured institution; and

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Bur. of Consumer Financial Protection

§ 1005.32

(iii) The remittance transfer is sent
from the sender’s account with the institution.
(2) Sunset date. Paragraph (a)(1) of
this section expires on July 21, 2020.
(3) Insured institution. For purposes of
this section, the term ‘‘insured institution’’ means insured depository institutions (which includes uninsured U.S.
branches and agencies of foreign depository institutions) as defined in section
3 of the Federal Deposit Insurance Act
(12 U.S.C. 1813), and insured credit
unions as defined in section 101 of the
Federal Credit Union Act (12 U.S.C.
1752).
(b) Permanent exceptions—(1) Permanent exception for transfers to certain
countries—(i) General. For disclosures
described in §§ 1005.31(b)(1) through
(b)(3) and 1005.36(a)(1) and (a)(2), estimates may be provided for transfers to
certain countries in accordance with
paragraph (c) of this section for the
amounts required to be disclosed under
§ 1005.31(b)(1)(iv) through (b)(1)(vii), if a
remittance transfer provider cannot
determine the exact amounts when the
disclosure is required because:
(A) The laws of the recipient country
do not permit such a determination, or
(B) The method by which transactions are made in the recipient country does not permit such determination.
(ii) Safe harbor. A remittance transfer
provider may rely on the list of countries published by the Bureau to determine whether estimates may be provided under paragraph (b)(1) of this section, unless the provider has information that a country’s laws or the method by which transactions are conducted
in that country permits a determination of the exact disclosure amount.
(2) Permanent exception for transfers
scheduled before the date of transfer. (i)
Except as provided in paragraph
(b)(2)(ii) of this section, for disclosures
described
in
§§ 1005.36(a)(1)(i)
and
(a)(2)(i), estimates may be provided in
accordance with paragraph (d) of this
section for the amounts to be disclosed
under §§ 1005.31(b)(1)(iv) through (vii) if
the remittance transfer is scheduled by
a sender five or more business days before the date of the transfer. In addition, if, at the time the sender schedules such a transfer, the provider

agrees to a sender’s request to fix the
amount to be transferred in the currency in which the remittance transfer
will be received and not the currency
in which it is funded, estimates may
also be provided for the amounts to be
disclosed
under
§§ 1005.31(b)(1)(i)
through (iii), except as provided in
paragraph (b)(2)(iii) of this section.
(ii) Covered third-party fees described in § 1005.31(b)(1)(vi) may be estimated under paragraph (b)(2)(i) of this
section only if the exchange rate is
also estimated under paragraph (b)(2)(i)
of this section and the estimated exchange rate affects the amount of such
fees.
(iii) Fees and taxes described in
§ 1005.31(b)(1)(ii) may be estimated
under paragraph (b)(2)(i) of this section
only if the amount that will be transferred in the currency in which it is
funded is also estimated under paragraph (b)(2)(i) of this section, and the
estimated amount affects the amount
of such fees and taxes.
(3) Permanent exception for optional
disclosure of non-covered third-party fees
and taxes collected by a person other than
the provider. For disclosures described
in §§ 1005.31(b)(1) through (3) and
1005.36(a)(1) and (2), estimates may be
provided for applicable non-covered
third-party fees and taxes collected on
the remittance transfer by a person
other than the provider, which are permitted
to
be
disclosed
under
§ 1005.31(b)(1)(viii), provided such estimates are based on reasonable sources
of information.
(c) Bases for estimates generally. Estimates provided pursuant to the exceptions in paragraph (a) or (b)(1) of this
section must be based on the belowlisted approach or approaches, except
as otherwise permitted by this paragraph. If a remittance transfer provider
bases an estimate on an approach that
is not listed in this paragraph, the provider is deemed to be in compliance
with this paragraph so long as the designated recipient receives the same, or
greater, amount of funds than the remittance transfer provider disclosed
under § 1005.31(b)(1)(vii).
(1) Exchange rate. In disclosing the
exchange rate as required under
§ 1005.31(b)(1)(iv), an estimate must be
based on one of the following:

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§ 1005.33

12 CFR Ch. X (1–1–16 Edition)

(i) For remittance transfers sent via
international ACH that qualify for the
exception in paragraph (b)(1)(ii) of this
section, the most recent exchange rate
set by the recipient country’s central
bank or other governmental authority
and reported by a Federal Reserve
Bank;
(ii) The most recent publicly available wholesale exchange rate and, if
applicable, any spread that the remittance transfer provider or its correspondent typically applies to such a
wholesale rate for remittance transfers
for that currency; or
(iii) The most recent exchange rate
offered or used by the person making
funds available directly to the designated recipient or by the person setting the exchange rate.
(2) Transfer amount in the currency in
which the funds will be received by the
designated recipient. In disclosing the
transfer amount in the currency in
which the funds will be received by the
designated recipient, as required under
§ 1005.31(b)(1)(v), an estimate must be
based on the estimated exchange rate
provided in accordance with paragraph
(c)(1) of this section, prior to any
rounding of the estimated exchange
rate.
(3) Covered third-party fees—(i) Imposed as percentage of amount transferred. In disclosing covered third-party
fees,
as
described
under
§ 1005.31(b)(1)(vi), that are a percentage
of the amount transferred to the designated recipient, an estimated exchange rate must be based on the estimated exchange rate provided in accordance with paragraph (c)(1) of this
section, prior to any rounding of the
estimated exchange rate.
(ii) Imposed by the intermediary or final
institution. In disclosing covered thirdparty fees pursuant to § 1005.31(b)(1)(vi),
an estimate must be based on one of
the following:
(A) The remittance transfer provider’s most recent remittance transfer
to the designated recipient’s institution, or
(B) A representative transmittal
route identified by the remittance
transfer provider.
(4) Amount of currency that will be
received by the designated recipient. In
disclosing the amount of currency that

will be received by the designated recipient
as
required
under
§ 1005.31(b)(1)(vii), an estimate must be
based on the information provided in
accordance with paragraphs (c)(1)
through (3) of this section, as applicable.
(d) Bases for estimates for transfers
scheduled before the date of transfer. Estimates provided pursuant to paragraph (b)(2) of this section must be
based on the exchange rate or, where
applicable, the estimated exchange
rate based on an estimation methodology permitted under paragraph (c) of
this section that the provider would
have used or did use that day in providing disclosures to a sender requesting such a remittance transfer to be
made on the same day. If, in accordance with this paragraph, a remittance
transfer provider uses a basis described
in paragraph (c) of this section but not
listed in paragraph (c)(1) of this section, the provider is deemed to be in
compliance with this paragraph regardless of the amount received by the designated recipient, so long as the estimation methodology is the same that
the provider would have used or did use
in providing disclosures to a sender requesting such a remittance transfer to
be made on the same day.
[77 FR 6285, Feb. 7, 2012, as amended at 77 FR
50283, Aug. 20, 2012; 78 FR 30704, May 22, 2013;
79 FR 55991, Sept. 18, 2014]

§ 1005.33 Procedures for resolving errors.
(a) Definition of error—(1) Types of
transfers or inquiries covered. For purposes of this section, the term error
means:
(i) An incorrect amount paid by a
sender in connection with a remittance
transfer unless the disclosure stated an
estimate of the amount paid by a sender in accordance with § 1005.32(b)(2) and
the difference results from application
of the actual exchange rate, fees, and
taxes, rather than any estimated
amount;
(ii) A computational or bookkeeping
error made by the remittance transfer
provider relating to a remittance
transfer;
(iii) The failure to make available to
a designated recipient the amount of
currency
disclosed
pursuant
to

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Bur. of Consumer Financial Protection

§ 1005.33

§ 1005.31(b)(1)(vii) and stated in the disclosure provided to the sender under
§ 1005.31(b)(2) or (3) for the remittance
transfer, unless:
(A) The disclosure stated an estimate
of the amount to be received in accordance with § 1005.32(a), (b)(1) or (b)(2) and
the difference results from application
of the actual exchange rate, fees, and
taxes, rather than any estimated
amounts; or
(B) The failure resulted from extraordinary circumstances outside the remittance transfer provider’s control
that could not have been reasonably
anticipated; or
(C) The difference results from the
application of non-covered third-party
fees or taxes collected on the remittance transfer by a person other than
the provider and the provider provided
the
disclosure
required
by
§ 1005.31(b)(1)(viii).
(iv) The failure to make funds available to a designated recipient by the
date of availability stated in the disclosure provided to the sender under
§ 1005.31(b)(2) or (3) for the remittance
transfer, unless the failure to make the
funds available resulted from:
(A) Extraordinary circumstances outside the remittance transfer provider’s
control that could not have been reasonably anticipated;
(B) Delays related to a necessary investigation or other special action by
the remittance transfer provider or a
third party as required by the provider’s fraud screening procedures or in
accordance with the Bank Secrecy Act,
31 U.S.C. 5311 et seq., Office of Foreign
Assets Control requirements, or similar laws or requirements;
(C) The remittance transfer being
made with fraudulent intent by the
sender or any person acting in concert
with the sender; or
(D) The sender having provided the
remittance transfer provider an incorrect account number or recipient institution identifier for the designated recipient’s account or institution, provided that the remittance transfer provider meets the conditions set forth in
paragraph (h) of this section;
(v) The sender’s request for documentation required by § 1005.31 or for
additional information or clarification
concerning a remittance transfer, in-

cluding a request a sender makes to determine whether an error exists under
paragraphs (a)(1)(i) through (iv) of this
section.
(2) Types of transfers or inquiries not
covered. The term error does not include:
(i) An inquiry about the status of a
remittance transfer, except where the
funds from the transfer were not made
available to a designated recipient by
the disclosed date of availability as described in paragraph (a)(1)(iv) of this
section;
(ii) A request for information for tax
or other recordkeeping purposes;
(iii) A change requested by the designated recipient; or
(iv) A change in the amount or type
of currency received by the designated
recipient from the amount or type of
currency stated in the disclosure provided to the sender under § 1005.31(b)(2)
or (3) if the remittance transfer provider relied on information provided by
the sender as permitted under § 1005.31
in making such disclosure.
(b) Notice of error from sender—(1) Timing; contents. A remittance transfer
provider shall comply with the requirements of this section with respect to
any oral or written notice of error from
a sender that:
(i) Is received by the remittance
transfer provider no later than 180 days
after the disclosed date of availability
of the remittance transfer;
(ii) Enables the provider to identify:
(A) The sender’s name and telephone
number or address;
(B) The recipient’s name, and if
known, the telephone number or address of the recipient; and
(C) The remittance transfer to which
the notice of error applies; and
(iii) Indicates why the sender believes an error exists and includes to
the extent possible the type, date, and
amount of the error, except for requests for documentation, additional
information, or clarification described
in paragraph (a)(1)(v) of this section.
(2) Request for documentation or clarification. When a notice of error is based
on documentation, additional information, or clarification that the sender
previously requested under paragraph
(a)(1)(v) of this section, the sender’s notice of error is timely if received by the

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§ 1005.33

12 CFR Ch. X (1–1–16 Edition)

remittance transfer provider the later
of 180 days after the disclosed date of
availability of the remittance transfer
or 60 days after the provider sent the
documentation, information, or clarification that had been requested.
(c) Time limits and extent of investigation—(1) Time limits for investigation and
report to consumer of error. A remittance
transfer provider shall investigate
promptly and determine whether an
error occurred within 90 days of receiving a notice of error. The remittance
transfer provider shall report the results to the sender, including notice of
any remedies available for correcting
any error that the provider determines
has occurred, within three business
days after completing its investigation.
(2) Remedies. Except as provided in
paragraph (c)(2)(iii) of this section, if,
following an assertion of an error by a
sender, the remittance transfer provider determines an error occurred, the
provider shall, within one business day
of, or as soon as reasonably practicable
after, receiving the sender’s instructions regarding the appropriate remedy, correct the error as designated by
the sender by:
(i) In the case of any error under
paragraphs (a)(1)(i) through (iii) of this
section, as applicable, either:
(A) Refunding to the sender the
amount of funds provided by the sender
in connection with a remittance transfer which was not properly transmitted, or the amount appropriate to
resolve the error; or
(B) Making available to the designated recipient, without additional
cost to the sender or to the designated
recipient, the amount appropriate to
resolve the error;
(ii) Except as provided in paragraph
(c)(2)(iii) of this section, in the case of
an error under paragraph (a)(1)(iv) of
this section
(A) As applicable, either:
(1) Refunding to the sender the
amount of funds provided by the sender
in connection with a remittance transfer which was not properly transmitted, or the amount appropriate to
resolve the error; or
(2) Making available to the designated recipient the amount appropriate to resolve the error. Such
amount must be made available to the

designated recipient without additional cost to the sender or to the designated recipient; and
(B) Refunding to the sender any fees
imposed and, to the extent not prohibited by law, taxes collected on the remittance transfer;
(iii) In the case of an error under
paragraph (a)(1)(iv) of this section that
occurred because the sender provided
incorrect or insufficient information in
connection with the remittance transfer, the remittance transfer provider
shall provide the remedies required by
paragraphs
(c)(2)(ii)(A)(1)
and
(c)(2)(ii)(B) of this section within three
business days of providing the report
required by paragraph (c)(1) or (d)(1) of
this section except that the provider
may agree to the sender’s request,
upon receiving the results of the error
investigation, that the funds be applied
towards a new remittance transfer,
rather than be refunded, if the provider
has not yet processed a refund. The
provider may deduct from the amount
refunded or applied towards a new
transfer any fees actually imposed on
or, to the extent not prohibited by law,
taxes actually collected on the remittance transfer as part of the first unsuccessful remittance transfer attempt
except that the provider shall not deduct its own fee.
(iv) In the case of a request under
paragraph (a)(1)(v) of this section, providing the requested documentation,
information, or clarification.
(d) Procedures if remittance transfer
provider determines no error or different
error occurred. In addition to following
the procedures specified in paragraph
(c) of this section, the remittance
transfer provider shall follow the procedures set forth in this paragraph (d)
if it determines that no error occurred
or that an error occurred in a manner
or amount different from that described by the sender.
(1) Explanation of results of investigation. The remittance transfer provider’s
report of the results of the investigation shall include a written explanation of the provider’s findings and
shall note the sender’s right to request
the documents on which the provider
relied in making its determination.
The explanation shall also address the
specific complaint of the sender.

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Bur. of Consumer Financial Protection

§ 1005.33

(2) Copies of documentation. Upon the
sender’s request, the remittance transfer provider shall promptly provide
copies of the documents on which the
provider relied in making its error determination.
(e) Reassertion of error. A remittance
transfer provider that has fully complied with the error resolution requirements of this section has no further responsibilities under this section should
the sender later reassert the same
error, except in the case of an error asserted by the sender following receipt
of information provided under paragraph (a)(1)(v) of this section.
(f) Relation to other laws—(1) Relation
to Regulation E § 1005.11 for incorrect
EFTs from a sender’s account. If an alleged error involves an incorrect electronic fund transfer from a sender’s account in connection with a remittance
transfer, and the sender provides a notice of error to the account-holding institution, the account-holding institution shall comply with the requirements of § 1005.11 governing error resolution rather than the requirements of
this section, provided that the accountholding institution is not also the remittance transfer provider. If the remittance transfer provider is also the
financial institution that holds the
consumer’s account, then the error-resolution provisions of this section apply
when the sender provides such notice of
error.
(2) Relation to Truth in Lending Act
and Regulation Z. If an alleged error involves an incorrect extension of credit
in connection with a remittance transfer, an incorrect amount received by
the designated recipient under paragraph (a)(1)(iii) of this section that is
an extension of credit for property or
services not delivered as agreed, or the
failure to make funds available by the
disclosed date of availability under
paragraph (a)(1)(iv) of this section that
is an extension of credit for property or
services not delivered as agreed, and
the sender provides a notice of error to
the creditor extending the credit, the
provisions of Regulation Z, 12 CFR
1026.13, governing error resolution
apply to the creditor, rather than the
requirements of this section, even if
the creditor is the remittance transfer
provider. However, if the creditor is the

remittance transfer provider, paragraph (b) of this section will apply instead of 12 CFR 1026.13(b). If the sender
instead provides a notice of error to
the remittance transfer provider that
is not also the creditor, then the errorresolution provisions of this section
apply to the remittance transfer provider.
(3) Unauthorized remittance transfers.
If an alleged error involves an unauthorized electronic fund transfer for
payment in connection with a remittance transfer, §§ 1005.6 and 1005.11
apply with respect to the account-holding institution. If an alleged error involves an unauthorized use of a credit
account for payment in connection
with a remittance transfer, the provisions of Regulation Z, 12 CFR
1026.12(b), if applicable, and § 1026.13,
apply with respect to the creditor.
(g) Error resolution standards and recordkeeping requirements—(1) Compliance
program. A remittance transfer provider shall develop and maintain written policies and procedures that are designed to ensure compliance with the
error resolution requirements applicable to remittance transfers under this
section.
(2) Retention of error-related documentation. The remittance transfer provider’s policies and procedures required
under paragraph (g)(1) of this section
shall include policies and procedures
regarding the retention of documentation related to error investigations.
Such policies and procedures must ensure, at a minimum, the retention of
any notices of error submitted by a
sender, documentation provided by the
sender to the provider with respect to
the alleged error, and the findings of
the remittance transfer provider regarding the investigation of the alleged
error. Remittance transfer providers
are subject to the record retention requirements under § 1005.13.
(h) Incorrect account number or recipient institution identifier provided by the
sender. The exception in paragraph
(a)(1)(iv)(D) of this section applies if:
(1) The remittance transfer provider
can demonstrate that the sender provided an incorrect account number or
recipient institution identifier to the
provider in connection with the remittance transfer;

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§ 1005.34

12 CFR Ch. X (1–1–16 Edition)

(2) For any instance in which the
sender provided the incorrect recipient
institution identifier, prior to or when
sending the transfer, the provider used
reasonably available means to verify
that the recipient institution identifier
provided by the sender corresponded to
the recipient institution name provided by the sender;
(3) The provider provided notice to
the sender before the sender made payment for the remittance transfer that,
in the event the sender provided an incorrect account number or recipient institution identifier, the sender could
lose the transfer amount. For purposes
of
providing
this
disclosure,
§ 1005.31(a)(2) applies to this notice unless the notice is given at the same
time as other disclosures required by
this subpart for which information is
permitted to be disclosed orally or via
mobile application or text message, in
which case this disclosure may be
given in the same medium as those
other disclosures;
(4) The incorrect account number or
recipient institution identifier resulted
in the deposit of the remittance transfer into a customer’s account that is
not the designated recipient’s account;
and
(5) The provider promptly used reasonable efforts to recover the amount
that was to be received by the designated recipient.

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[77 FR 6285, Feb. 7, 2012, as amended at 77 FR
50284, Aug. 20, 2012; 78 FR 30704, May 22, 2013;
78 FR 49366, Aug. 14, 2013; 79 FR 55991, Sept.
18, 2014]

§ 1005.34 Procedures for cancellation
and refund of remittance transfers.
(a) Sender right of cancellation and refund. Except as provided in § 1005.36(c),
a remittance transfer provider shall
comply with the requirements of this
section with respect to any oral or
written request to cancel a remittance
transfer from the sender that is received by the provider no later than 30
minutes after the sender makes payment in connection with the remittance transfer if:
(1) The request to cancel enables the
provider to identify the sender’s name
and address or telephone number and
the particular transfer to be cancelled;
and

(2) The transferred funds have not
been picked up by the designated recipient or deposited into an account of
the designated recipient.
(b) Time limits and refund requirements.
A remittance transfer provider shall
refund, at no additional cost to the
sender, the total amount of funds provided by the sender in connection with
a remittance transfer, including any
fees and, to the extent not prohibited
by law, taxes imposed in connection
with the remittance transfer, within
three business days of receiving a sender’s request to cancel the remittance
transfer.
§ 1005.35 Acts of agents.
A remittance transfer provider is liable for any violation of this subpart by
an agent when such agent acts for the
provider.
§ 1005.36 Transfers scheduled before
the date of transfer.
(a) Timing. (1) For a one-time transfer
scheduled five or more business days
before the date of transfer or for the
first in a series of preauthorized remittance transfers, the remittance transfer provider must:
(i) Provide either the pre-payment
disclosure described in § 1005.31(b)(1)
and
the
receipt
described
in
§ 1005.31(b)(2) or the combined disclosure described in § 1005.31(b)(3), in accordance with the timing requirements
set forth in § 1005.31(e); and
(ii) If any of the disclosures provided
pursuant to paragraph (a)(1)(i) of this
section contain estimates as permitted
by § 1005.32(b)(2), mail or deliver to the
sender an additional receipt meeting
the
requirements
described
in
§ 1005.31(b)(2) no later than one business
day after the date of the transfer. If
the transfer involves the transfer of
funds from the sender’s account held
by the provider, the receipt required by
this paragraph may be provided on or
with the next periodic statement for
that account, or within 30 days after
the date of the transfer if a periodic
statement is not provided.
(2)
For
each
subsequent
preauthorized remittance transfer:
(i) If any of the information on the
most recent receipt provided pursuant
to paragraph (a)(1)(i) of this section, or

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Bur. of Consumer Financial Protection

§ 1005.36

by this paragraph (a)(2)(i), other than
the temporal disclosures required by
§ 1005.31(b)(2)(ii) and (b)(2)(vii), is no
longer accurate with respect to a subsequent
preauthorized
remittance
transfer for reasons other than as permitted by § 1005.32, then the remittance
transfer provider must provide an updated receipt meeting the requirements described in § 1005.31(b)(2) to the
sender. The provider must mail or deliver this receipt to the sender within a
reasonable time prior to the scheduled
date
of
the
next
subsequent
preauthorized
remittance
transfer.
Such receipt must clearly and conspicuously indicate that it contains updated disclosures.
(ii) Unless a receipt was provided in
accordance with paragraph (a)(2)(i) of
this section that contained no estimates pursuant to § 1005.32, the remittance transfer provider must mail or
deliver to the sender a receipt meeting
the
requirements
described
in
§ 1005.31(b)(2) no later than one business
day after the date of the transfer. If
the remittance transfer involves the
transfer of funds from the sender’s account held by the provider, the receipt
required by this paragraph may be provided on or with the next periodic
statement for that account, or within
30 days after the date of the transfer if
a periodic statement is not provided.
(iii) A remittance transfer provider
must provide the disclosures required
by paragraph (d) of this section in accordance with the timing requirements
of that section.
(b) Accuracy. (1) For a one-time
transfer scheduled five or more business days in advance or for the first in
a series of preauthorized remittance
transfers, disclosures provided pursuant to paragraph (a)(1)(i) of this section
must comply with § 1005.31(f) by being
accurate when a sender makes payment except to the extent estimates
are permitted by § 1005.32.
(2)
For
each
subsequent
preauthorized remittance transfer, the
most recent receipt provided pursuant
to paragraph (a)(1)(i) or (a)(2)(i) of this
section must be accurate as of when
such transfer is made, except:
(i) The temporal elements required
by § 1005.31(b)(2)(ii) and (b)(2)(vii) must
be accurate only if the transfer is the

first transfer to occur after the disclosure was provided; and
(ii) To the extent estimates are permitted by § 1005.32.
(3) Disclosures provided pursuant to
paragraph (a)(1)(ii) or (a)(2)(ii) of this
section must be accurate as of when
the remittance transfer to which it
pertains is made, except to the extent
estimates are permitted by § 1005.32(a)
or (b)(1).
(c) Cancellation. For any remittance
transfer scheduled by the sender at
least three business days before the
date of the transfer, a remittance
transfer provider shall comply with
any oral or written request to cancel
the remittance transfer from the sender if the request to cancel:
(1) Enables the provider to identify
the sender’s name and address or telephone number and the particular transfer to be cancelled; and
(2) Is received by the provider at
least three business days before the
scheduled date of the remittance transfer.
(d) Additional requirements for subsequent preauthorized remittance transfers—(1) Disclosure requirement. (i) For
any subsequent transfer in a series of
preauthorized remittance transfers, the
remittance transfer provider must disclose to the sender:
(A) The date the provider will make
the subsequent transfer, using the term
‘‘Future Transfer Date,’’ or a substantially similar term;
(B) A statement about the rights of
the sender regarding cancellation as
described in § 1005.31(b)(2)(iv); and
(C) The name, telephone number(s),
and Web site of the remittance transfer
provider.
(ii) If the future date or dates of
transfer are described as occurring in
regular periodic intervals, e.g., the 15th
of every month, rather than as a specific calendar date or dates, the remittance transfer provider must disclose
any future date or dates of transfer
that do not conform to the described
interval.
(2) Notice requirements. (i) Except as
described in paragraph (d)(2)(ii) of this
section, the disclosures required by
paragraph (d)(1) of this section must be
received by the sender no more than 12
months, and no less than five business

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Pt. 1005, App. A

12 CFR Ch. X (1–1–16 Edition)

days prior to the date of any subsequent transfer to which it pertains.
The disclosures required by paragraph
(d)(1) of this section may be provided in
a separate disclosure or may be provided on one or more disclosures required by this subpart related to the
same series of preauthorized transfers,
so long as the consumer receives the
required information for each subsequent preauthorized remittance transfer in accordance with the timing requirements of this paragraph (d)(2)(i).
(ii) For any subsequent preauthorized
remittance transfer for which the date
of transfer is four or fewer business
days after the date payment is made
for that transfer, the information required by paragraph (d)(1) of this section must be provided on or with the
receipt described in § 1005.31(b)(2), or
disclosed as permitted by § 1005.31(a)(3)
or (a)(5), for the initial transfer in that
series in accordance with paragraph
(a)(1)(i) of this section.
(3) Specific format requirement. The information
required
by
paragraph
(d)(1)(i)(A) of this section generally
must be disclosed in close proximity to
the other information required by
paragraph (d)(1)(i)(B) of this section.
(4) Accuracy. Any disclosure required
by paragraph (d)(1) of this section must
be accurate as of the date the
preauthorized remittance transfer to
which it pertains is made.
[76 FR 81023, Dec. 27, 2011, as amended at 77
FR 50284, Aug. 20, 2012]

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APPENDIX A TO PART 1005—MODEL
DISCLOSURE CLAUSES AND FORMS
A–1—Model Clauses for Unsolicited Issuance
(§ 1005.5(b)(2))
A–2—Model Clauses for Initial Disclosures
(§ 1005.7(b))
A–3—Model Forms for Error Resolution Notice (§§ 1005.7(b)(10) and 1005.8(b))
A–4—Model Form for Service-Providing Institutions (§ 1005.14(b)(1)(ii))
A–5—Model Forms for Government Agencies
(§ 1005.15(d)(1) and (2))
A–6—Model Clauses for Authorizing OneTime Electronic Fund Transfers Using
Information From a Check (§ 1005.3(b)(2))
A–7—Model Clauses for Financial Institutions Offering Payroll Card Accounts
(§ 1005.18(c))
A–8—Model Clause for Electronic Collection
of Returned Item Fees (§ 1005.3(b)(3))
A–9—Model Consent Form for Overdraft
Services (§ 1005.17)

A–10 through A–30 [Reserved]
A–30(a)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency including a
disclaimer where non-covered third-party
fees and foreign taxes may apply
(§ 1005.31(b)(1))
A–30(b) —Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency including a
disclaimer with estimate for non-covered
third-party
fees
(§ 1005.31(b)(1)
and
§ 1005.32(b)(3))
A–30(c)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency including a
disclaimer with estimate for foreign taxes
(§ 1005.31(b)(1) and § 1005.32(b)(3))
A–30(d)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into Local Currency, including a
disclaimer with estimates for non-covered
third-party
fees
and
foreign
taxes
(§ 1005.31(b)(1) and § 1005.32(b)(3))
A–31—Model Form for Receipts for Remittance Transfers Exchanged into Local Currency (§ 1005.31(b)(2))
A–32—Model Form for Combined Disclosures
for Remittance Transfers Exchanged into
Local Currency (§ 1005.31(b)(3))
A–34—Model Form for Receipts for Dollar-toDollar
Remittance
Transfers
(§ 1005.31(b)(2))
A–35—Model Form for Combined Disclosures
for Dollar-to-Dollar Remittance Transfers
(§ 1005.31(b)(3))
A–36—Model Form for Error Resolution and
Cancellation
Disclosures
(Long)
(§ 1005.31(b)(4))
A–37—Model Form for Error Resolution and
Cancellation
Disclosures
(Short)
(§ 1005.31(b)(2)(iv) and (b)(2)(vi))
A–39—Model Form for Receipts for Remittance Transfers Exchanged into Local Currency—Spanish (§ 1005.31(b)(2))
A–40—Model Form for Combined Disclosures
for Remittance Transfers Exchanged into
Local Currency—Spanish (§ 1005.31(b)(3))
A–41—Model Form for Error Resolution and
Cancellation Disclosures (Long)—Spanish
(§ 1005.31(b)(4))
A–1—MODEL CLAUSES FOR UNSOLICITED
ISSUANCE (§ 1005.5(b)(2))
(a) Accounts using cards. You cannot use
the enclosed card to transfer money into or
out of your account until we have validated
it. If you do not want to use the card, please
(destroy it at once by cutting it in half).
[Financial institution may add validation
instructions here.]
(b) Accounts using codes. You cannot use
the enclosed code to transfer money into or
out of your account until we have validated
it. If you do not want to use the code, please
(destroy this notice at once).

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Bur. of Consumer Financial Protection

Pt. 1005, App. A

[Financial institution may add validation
instructions here.]

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A–2—MODEL CLAUSES FOR INITIAL
DISCLOSURES (§ 1005.7(b))
(a) Consumer Liability (§ 1005.7(b)(1)).
(Tell us AT ONCE if you believe your
[card] [code] has been lost or stolen, or if you
believe that an electronic fund transfer has
been made without your permission using information from your check. Telephoning is
the best way of keeping your possible losses
down. You could lose all the money in your
account (plus your maximum overdraft line
of credit). If you tell us within 2 business
days after you learn of the loss or theft of
your [card] [code], you can lose no more than
$50 if someone used your [card][code] without
your permission.)
If you do NOT tell us within 2 business
days after you learn of the loss or theft of
your [card] [code], and we can prove we could
have stopped someone from using your [card]
[code] without your permission if you had
told us, you could lose as much as $500.
Also, if your statement shows transfers
that you did not make, including those made
by card, code or other means, tell us at once.
If you do not tell us within 60 days after the
statement was mailed to you, you may not
get back any money you lost after the 60
days if we can prove that we could have
stopped someone from taking the money if
you had told us in time. If a good reason
(such as a long trip or a hospital stay) kept
you from telling us, we will extend the time
periods.
(b) Contact in event of unauthorized transfer
(§ 1005.7(b)(2)). If you believe your [card]
[code] has been lost or stolen, call: [Telephone number] or write: [Name of person or
office to be notified] [Address].
You should also call the number or write
to the address listed above if you believe a
transfer has been made using the information from your check without your permission.
(c) Business days (§ 1005.7(b)(3)). For purposes of these disclosures, our business days
are (Monday through Friday) (Monday
through Saturday) (any day including Saturdays and Sundays). Holidays are (not) included.
(d)
Transfer
types
and
limitations
(§ 1005.7(b)(4)) (1) Account access. You may use
your [card][code] to:
(i) Withdraw cash from your [checking]
[or] [savings] account.
(ii) Make deposits to your [checking] [or]
[savings] account.
(iii) Transfer funds between your checking
and savings accounts whenever you request.
(iv) Pay for purchases at places that have
agreed to accept the [card] [code].
(v) Pay bills directly [by telephone] from
your [checking] [or] [savings] account in the
amounts and on the days you request.

Some of these services may not be available at all terminals.
(2) Electronic check conversion. 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:
(i) Pay for purchases.
(ii) Pay bills.
(3) Limitations on frequency of transfers. (i)
You may make only [insert number, e.g., 3]
cash withdrawals from our terminals each
[insert time period, e.g., week].
(ii) You can use your telephone bill-payment service to pay [insert number] bills
each [insert time period] [telephone call].
(iii) You can use our point-of-sale transfer
service for [insert number] transactions each
[insert time period].
(iv) For security reasons, there are limits
on the number of transfers you can make
using our [terminals] [telephone bill-payment service] [point-of-sale transfer service].
(4) Limitations on dollar amounts of transfers
(i) You may withdraw up to [insert dollar
amount] from our terminals each [insert
time period] time you use the [card] [code].
(ii) You may buy up to [insert dollar
amount] worth of goods or services each [insert time period] time you use the [card]
[code] in our point-of-sale transfer service.
(e) Fees (§ 1005.7(b)(5)) (1) Per transfer charge.
We will charge you [insert dollar amount] for
each transfer you make using our [automated teller machines] [telephone bill-payment service] [point-of-sale transfer service].
(2) Fixed charge. We will charge you [insert
dollar amount] each [insert time period] for
our [automated teller machine service] [telephone bill-payment service] [point-of-sale
transfer service].
(3) Average or minimum balance charge. We
will only charge you for using our [automated teller machines] [telephone bill-payment service] [point-of-sale transfer service]
if the [average] [minimum] balance in your
[checking account] [savings account] [accounts] falls below [insert dollar amount]. If
it does, we will charge you [insert dollar
amount] each [transfer] [insert time period].
(f) Confidentiality (§ 1005.7(b)(9)). We will
disclose information to third parties about
your account or the transfers you make:
(i) Where it is necessary for completing
transfers, or
(ii) In order to verify the existence and
condition of your account for a third party,
such as a credit bureau or merchant, or
(iii) In order to comply with government
agency or court orders, or
(iv) If you give us your written permission.
(g) Documentation (§ 1005.7(b)(6)) (1) Terminal
transfers. You can get a receipt at the time
you make any transfer to or from your account using one of our [automated teller machines] [or] [point-of-sale terminals].

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12 CFR Ch. X (1–1–16 Edition)

(2) Preauthorized credits. If you have arranged to have direct deposits made to your
account at least once every 60 days from the
same person or company, (we will let you
know if the deposit is [not] made.) [the person or company making the deposit will tell
you every time they send us the money] [you
can call us at (insert telephone number) to
find out whether or not the deposit has been
made].
(3) Periodic statements. You will get a
[monthly] [quarterly] account statement
(unless there are no transfers in a particular
month. In any case you will get the statement at least quarterly).
(4) Passbook account where the only possible
electronic fund transfers are preauthorized credits. If you bring your passbook to us, we will
record any electronic deposits that were
made to your account since the last time
you brought in your passbook.
(h) Preauthorized payments (§ 1005.7(b) (6), (7)
and (8); § 1005.10(d)) (1) Right to stop payment
and procedure for doing so. If you have told us
in advance to make regular payments out of
your account, you can stop any of these payments. Here’s how:
Call us at [insert telephone number], or
write us at [insert address], in time for us to
receive your request 3 business days or more
before the payment is scheduled to be made.
If you call, we may also require you to put
your request in writing and get it to us within 14 days after you call. (We will charge you
[insert amount] for each stop-payment order
you give.)
(2) Notice of varying amounts. If these regular payments may vary in amount, [we]
[the person you are going to pay] will tell
you, 10 days before each payment, when it
will be made and how much it will be. (You
may choose instead to get this notice only
when the payment would differ by more than
a certain amount from the previous payment, or when the amount would fall outside
certain limits that you set.)
(3) Liability for failure to stop payment of
preauthorized transfer. If you order us to stop
one of these payments 3 business days or
more before the transfer is scheduled, and we
do not do so, we will be liable for your losses
or damages.
(i)
Financial
institution’s
liability
(§ 1005.7(b)(8)). If we do not complete a transfer to or from your account on time or in the
correct amount according to our agreement
with you, we will be liable for your losses or
damages. However, there are some exceptions. We will not be liable, for instance:
(1) If, through no fault of ours, you do not
have enough money in your account to make
the transfer.
(2) If the transfer would go over the credit
limit on your overdraft line.
(3) If the automated teller machine where
you are making the transfer does not have
enough cash.

(4) If the [terminal] [system] was not working properly and you knew about the breakdown when you started the transfer.
(5) If circumstances beyond our control
(such as fire or flood) prevent the transfer,
despite reasonable precautions that we have
taken.
(6) There may be other exceptions stated in
our agreement with you.
(j) ATM fees (§ 1005.7(b)(11)). When you use
an ATM not owned by us, you may be
charged a fee by the ATM operator [or any
network used] (and you may be charged a fee
for a balance inquiry even if you do not complete a fund transfer).
A–3—MODEL FORMS FOR ERROR RESOLUTION
NOTICE (§§ 1005.7(b)(10) AND 1005.8(b))
(a) Initial and annual error resolution notice
(§§ 1005.7(b)(10) and 1005.8(b)).
In Case of Errors or Questions About Your
Electronic Transfers Telephone us at [insert
telephone number] Write us at [insert address] [or email us at [insert email address]]
as soon as you can, if you think your statement or receipt is wrong or if you need more
information about a transfer listed on the
statement or receipt. We must hear from you
no later than 60 days after we sent the
FIRST statement on which the problem or
error appeared.
(1) Tell us your name and account number
(if any).
(2) Describe the error or the transfer you
are unsure about, and explain as clearly as
you can why you believe it is an error or why
you need more information.
(3) Tell us the dollar amount of the suspected error.
If you tell us orally, we may require that
you send us your complaint or question in
writing within 10 business days.
We will determine whether an error occurred within 10 business days after we hear
from you and will correct any error promptly. If we need more time, however, we may
take up to 45 days to investigate your complaint or question. If we decide to do this, we
will credit your account within 10 business
days for the amount you think is in error, so
that you will have the use of the money during the time it takes us to complete our investigation. If we ask you to put your complaint or question in writing and we do not
receive it within 10 business days, we may
not credit your account.
For errors involving new accounts, pointof-sale, or foreign-initiated transactions, we
may take up to 90 days to investigate your
complaint or question. For new accounts, we
may take up to 20 business days to credit
your account for the amount you think is in
error.
We will tell you the results within three
business days after completing our investigation. If we decide that there was no error, we
will send you a written explanation. You

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Bur. of Consumer Financial Protection

Pt. 1005, App. A

may ask for copies of the documents that we
used in our investigation.
(b) Error resolution notice on periodic statements (§ 1005.8(b)).
In Case of Errors or Questions About Your
Electronic Transfers Telephone us at [insert
telephone number] or Write us at [insert address] as soon as you can, if you think your
statement or receipt is wrong or if you need
more information about a transfer on the
statement or receipt. We must hear from you
no later than 60 days after we sent you the
FIRST statement on which the error or problem appeared.
(1) Tell us your name and account number
(if any).
(2) Describe the error or the transfer you
are unsure about, and explain as clearly as
you can why you believe it is an error or why
you need more information.
(3) Tell us the dollar amount of the suspected error.
We will investigate your complaint and
will correct any error promptly. If we take
more than 10 business days to do this, we
will credit your account for the amount you
think is in error, so that you will have the
use of the money during the time it takes us
to complete our investigation.

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A–4—MODEL FORM FOR SERVICE-PROVIDING
INSTITUTIONS (§ 1005.14(b)(1)(ii))
ALL
QUESTIONS
ABOUT
TRANSACTIONS MADE WITH YOUR (NAME OF
CARD) CARD MUST BE DIRECTED TO US
(NAME OF SERVICE PROVIDER), AND NOT
TO THE BANK OR OTHER FINANCIAL INSTITUTION WHERE YOU HAVE YOUR ACCOUNT. We are responsible for the [name of
service] service and for resolving any errors
in transactions made with your [name of
card] card.
We will not send you a periodic statement
listing transactions that you make using
your [name of card] card. The transactions
will appear only on the statement issued by
your bank or other financial institution.
SAVE THE RECEIPTS YOU ARE GIVEN
WHEN YOU USE YOUR [NAME OF CARD]
CARD, AND CHECK THEM AGAINST THE
ACCOUNT STATEMENT YOU RECEIVE
FROM YOUR BANK OR OTHER FINANCIAL
INSTITUTION. If you have any questions
about one of these transactions, call or write
us at [telephone number and address] [the
telephone number and address indicated
below].
IF YOUR [NAME OF CARD] CARD IS
LOST OR STOLEN, NOTIFY US AT ONCE
by calling or writing to us at [telephone
number and address].

A–5—MODEL FORMS FOR GOVERNMENT
AGENCIES (§ 1005.15(d)(1) AND (2))
(a) Disclosure by government agencies of information about obtaining account balances and
account histories (§ 1005.15(d)(1)(i) and (ii)).
You may obtain information about the
amount of benefits you have remaining by
calling [telephone number]. That information is also available [on the receipt you get
when you make a transfer with your card at
(an ATM)(a POS terminal)][when you make
a balance inquiry at an ATM][when you
make a balance inquiry at specified locations].
You also have the right to receive a written summary of transactions for the 60 days
preceding your request by calling [telephone
number]. [Optional: Or you may request the
summary by contacting your caseworker.]
(b) Disclosure of error resolution procedures
for government agencies that do not provide
periodic statements (§ 1005.15(d)(1)(iii) and
(d)(2)).
In Case of Errors or Questions About Your
Electronic Transfers Telephone us at [telephone number] Write us at [insert address]
[or email us at [insert email address]] as
soon as you can, if you think an error has occurred in your [EBT][agency’s name for program] account. We must hear from you no
later than 60 days after you learn of the
error. You will need to tell us:
• Your name and [case] [file] number.
• Why you believe there is an error, and
the dollar amount involved.
• Approximately when the error took
place.
If you tell us orally, we may require that
you send us your complaint or question in
writing within 10 business days.
We will determine whether an error occurred within 10 business days after we hear
from you and will correct any error promptly. If we need more time, however, we may
take up to 45 days to investigate your complaint or question. If we decide to do this, we
will credit your account within 10 business
days for the amount you think is in error, so
that you will have the use of the money during the time it takes us to complete our investigation. If we ask you to put your complaint or question in writing and we do not
receive it within 10 business days, we may
not credit your account.
For errors involving new accounts, pointof-sale, or foreign-initiated transactions, we
may take up to 90 days to investigate your
complaint or question. For new accounts, we
may take up to 20 business days to credit
your account for the amount you think is in
error.
We will tell you the results within three
business days after completing our investigation. If we decide that there was no error, we
will send you a written explanation. You

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Pt. 1005, App. A

12 CFR Ch. X (1–1–16 Edition)

may ask for copies of the documents that we
used in our investigation.
If you need more information about our
error resolution procedures, call us at [telephone number][the telephone number shown
above].
A–6—MODEL CLAUSES FOR AUTHORIZING ONETIME ELECTRONIC FUND TRANSFERS USING
INFORMATION FROM A CHECK (§ 1005.3(b)(2))
(a) Notice About Electronic Check Conversion.
When you provide a check as payment, you
authorize us either to use information from
your check to make a one-time electronic
fund transfer from your account or to process the payment as a check transaction.
(b) Alternative Notice About Electronic Check
Conversion (Optional).
When you provide a check as payment, you
authorize us to use information from your
check to make a one-time electronic fund
transfer from your account. In certain circumstances, such as for technical or processing reasons, we may process your payment as a check transaction.
[Specify other circumstances (at payee’s option).]
(c) Notice For Providing Additional Information About Electronic Check Conversion.
When we use information from your check
to make an electronic fund transfer, funds
may be withdrawn from your account as
soon as the same day [you make] [we receive] your payment[, and you will not receive your check back from your financial
institution].

lpowell on DSK54DXVN1OFR with $$_JOB

A–7—MODEL CLAUSES FOR FINANCIAL INSTITUTIONS OFFERING PAYROLL CARD ACCOUNTS
(§ 1005.18(c))
(a) Disclosure by financial institutions of information about obtaining account information
for payroll card accounts. § 1005.18(c)(1).
You may obtain information about the
amount of money you have remaining in
your payroll card account by calling [telephone number]. This information, along with
a 60-day history of account transactions, is
also available online at [internet address].
You also have the right to obtain a 60-day
written history of account transactions by
calling [telephone number], or by writing us
at [address].
(b) Disclosure of error-resolution procedures
for financial institutions that provide alternative means of obtaining payroll card account
information (§ 1005.18(c)(1)(ii) and (c)(2)).
In Case of Errors or Questions About Your
Payroll Card Account Telephone us at [telephone number] or Write us at [address] [or
email us at [email address]] as soon as you
can, if you think an error has occurred in
your payroll card account. We must allow

you to report an error until 60 days after the
earlier of the date you electronically access
your account, if the error could be viewed in
your electronic history, or the date we sent
the FIRST written history on which the
error appeared. You may request a written
history of your transactions at any time by
calling us at [telephone number] or writing
us at [address]. You will need to tell us:
Your name and [payroll card account]
number.
Why you believe there is an error, and the
dollar amount involved.
Approximately when the error took place.
If you tell us orally, we may require that
you send us your complaint or question in
writing within 10 business days.
We will determine whether an error occurred within 10 business days after we hear
from you and will correct any error promptly. If we need more time, however, we may
take up to 45 days to investigate your complaint or question. If we decide to do this, we
will credit your account within 10 business
days for the amount you think is in error, so
that you will have the money during the
time it takes us to complete our investigation. If we ask you to put your complaint or
question in writing and we do not receive it
within 10 business days, we may not credit
your account.
For errors involving new accounts, pointof-sale, or foreign-initiated transactions, we
may take up to 90 days to investigate your
complaint or question. For new accounts, we
may take up to 20 business days to credit
your account for the amount you think is in
error.
We will tell you the results within three
business days after completing our investigation. If we decide that there was no error, we
will send you a written explanation.
You may ask for copies of the documents
that we used in our investigation.
If you need more information about our
error-resolution procedures, call us at [telephone number] [the telephone number shown
above] [or visit [internet address]].
A–8—MODEL CLAUSE FOR ELECTRONIC COLLECTION
OF
RETURNED
ITEM
FEES
(§ 1005.3(b)(3))
If your payment is returned unpaid, you
authorize [us/name of person collecting the
fee electronically] to make a one-time electronic fund transfer from your account to
collect a fee of [$llll]. [If your payment
is returned unpaid, you authorize [us/name
of person collecting the fee electronically] to
make a one-time electronic fund transfer
from your account to collect a fee. The fee
will be determined [by]/[as follows]:

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ER27DE11.000

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A–10 THROUGH A–29 [RESERVED]

Pt. 1005, App. A

12 CFR Ch. X (1–1–16 Edition)

A–30(a)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into
Local Currency (§ 1005.31(b)(1))

ER22MY13.243

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A–30(b)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into
Local Currency (§ 1005.31(b)(1))

Bur. of Consumer Financial Protection

Pt. 1005, App. A

A–30(c)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into
Local Currency (§ 1005.31(b)(1))

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A–30(d)—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into
Local Currency (§ 1005.31(b)(1))

Pt. 1005, App. A

12 CFR Ch. X (1–1–16 Edition)

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A–31—Model Form for Receipts for Remittance Transfers Exchanged into Local Currency
(§ 1005.31(b)(2))

Bur. of Consumer Financial Protection

Pt. 1005, App. A

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A–32—Model Form for Combined Disclosures for Remittance Transfers Exchanged into Local
Currency (§ 1005.31(b)(3))

Pt. 1005, App. A

12 CFR Ch. X (1–1–16 Edition)

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A–33—Model Form for Pre-Payment Disclosures for Dollar-to-Dollar Remittance Transfers
(§ 1005.31(b)(1))

Bur. of Consumer Financial Protection

Pt. 1005, App. A

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A–34—Model Form for Receipts for Dollar-to-Dollar Remittance Transfers (§ 1005.31(b)(2))

Pt. 1005, App. A

12 CFR Ch. X (1–1–16 Edition)

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A–35—Model Form for Combined Disclosures for Dollar-to-Dollar Remittance Transfers
(§ 1005.31(b)(3))

Bur. of Consumer Financial Protection

Pt. 1005, App. A

A–36—Model Form for Error Resolution and Cancellation Disclosures (Long) (§ 1005.31(b)(4))

and

Cancellation

Disclosures

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A–37—Model Form for Error
(§ 1005.31(b)(2)(iv) and (b)(2)(vi))

Pt. 1005, App. A

12 CFR Ch. X (1–1–16 Edition)

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A–38—Model Form for Pre-Payment Disclosures for Remittance Transfers Exchanged into
Local Currency—Spanish (§ 1005.31(b)(1))

Bur. of Consumer Financial Protection

Pt. 1005, App. A

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A–39—Model Form for Receipts for Remittance Transfers Exchanged into Local Currency—
Spanish (§ 1005.31(b)(2))

12 CFR Ch. X (1–1–16 Edition)

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Pt. 1005, App. A

Bur. of Consumer Financial Protection

Pt. 1005, App. A

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A–40—Model Form for Combined Disclosures for Remittance Transfers Exchanged into Local
Currency—Spanish (§ 1005.31(b)(3))

Pt. 1005, App. C

12 CFR Ch. X (1–1–16 Edition)

A–41—Model Form for Error Resolution and Cancellation Disclosures (Long)—Spanish
(§ 1005.31(b)(4))

[76 FR 81023, Dec. 27, 2011, as amended at 77 FR 6290, Feb. 7, 2012; 77 FR 40459, July 10, 2012;
78 FR 30705, May 22, 2013; 79 FR 55991, Sept. 18, 2014]

tor and other officials of the Division of Research, Markets, and Regulations as officials
‘‘duly authorized’’ to issue, at their discretion, official interpretations of this part. Except in unusual circumstances, such interpretations will not be issued separately but

APPENDIX B TO PART 1005 [RESERVED]

OFFICIAL INTERPRETATIONS
Pursuant to section 916(d) of the Act, the
Bureau has designated the Associate Direc-

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APPENDIX C TO PART 1005—ISSUANCE OF
OFFICIAL INTERPRETATIONS

Bur. of Consumer Financial Protection

Pt. 1005, Supp. I

will be incorporated in an official commentary to this part, which will be amended
periodically.
REQUESTS FOR ISSUANCE OF OFFICIAL
INTERPRETATIONS
A request for an official interpretation
shall be in writing and addressed to the Bureau of Consumer Financial Protection, 1700
G Street NW., Washington, DC 20006. The request shall contain a complete statement of
all relevant facts concerning the issue, including copies of all pertinent documents.
SCOPE OF INTERPRETATIONS
No interpretations will be issued approving
financial institutions’ forms or statements.
This restriction does not apply to forms or
statements whose use is required or sanctioned by a government agency.

SUPPLEMENT I TO PART 1005—OFFICIAL
INTERPRETATIONS
SECTION 1005.2

DEFINITIONS

2(a) Access Device
1. Examples. The term ‘‘access device’’ includes debit cards, personal identification
numbers (PINs), telephone transfer and telephone bill payment codes, and other means
that may be used by a consumer to initiate
an electronic fund transfer (EFT) to or from
a consumer account. The term does not include magnetic tape or other devices used internally by a financial institution to initiate
electronic transfers.
2. Checks used to capture information. The
term ‘‘access device’’ does not include a
check or draft used to capture the Magnetic
Ink Character Recognition (MICR) encoding
to initiate a one-time automated clearinghouse (ACH) debit. For example, if a consumer authorizes a one-time ACH debit from
the consumer’s account using a blank, partially completed, or fully completed and
signed check for the merchant to capture the
routing, account, and serial numbers to initiate the debit, the check is not an access device. (Although the check is not an access
device under Regulation E, the transaction
is nonetheless covered by the regulation. See
comment 3(b)(1)–1.v.)

tion by a consumer that is collateralized by
government or government-insured securities.
2. Certain employment-related cards not covered. The term ‘‘payroll card account’’ does
not include a card used solely to disburse incentive-based payments (other than commissions which can represent the primary means
through which a consumer is paid), such as
bonuses, which are unlikely to be a consumer’s primary source of salary or other
compensation. The term also does not include a card used solely to make disbursements unrelated to compensation, such as
petty cash reimbursements or travel per
diem payments. Similarly, a payroll card account does not include a card that is used in
isolated instances to which an employer
typically does not make recurring payments,
such as when providing final payments or in
emergency situations when other payment
methods are unavailable. However, all transactions involving the transfer of funds to or
from a payroll card account are covered by
the regulation, even if a particular transaction involves payment of a bonus, other incentive-based payment, or reimbursement,
or the transaction does not represent a
transfer of wages, salary, or other employee
compensation.
3. Examples of accounts not covered by
Regulation E (12 CFR part 1005) include:
i. Profit-sharing and pension accounts established under a trust agreement, which are
exempt under § 1005.2(b)(2).
ii. Escrow accounts, such as those established to ensure payment of items such as
real estate taxes, insurance premiums, or
completion of repairs or improvements.
iii. Accounts for accumulating funds to
purchase U.S. savings bonds.
Paragraph 2(b)(2)
1. Bona fide trust agreements. The term
‘‘bona fide trust agreement’’ is not defined
by the Act or regulation; therefore, financial
institutions must look to state or other applicable law for interpretation.
2. Custodial agreements. An account held
under a custodial agreement that qualifies as
a trust under the Internal Revenue Code,
such as an individual retirement account, is
considered to be held under a trust agreement for purposes of Regulation E.

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2(b) Account
1. Consumer asset account. The term ‘‘consumer asset account’’ includes:
i. Club accounts, such as vacation clubs. In
many cases, however, these accounts are exempt from the regulation under § 1005.3(c)(5)
because all electronic transfers to or from
the account have been preauthorized by the
consumer and involve another account of the
consumer at the same institution.
ii. A retail repurchase agreement (repo),
which is a loan made to a financial institu-

2(d) Business Day
1. Duration. A business day includes the entire 24-hour period ending at midnight, and a
notice required by the regulation is effective
even if given outside normal business hours.
The regulation does not require, however,
that a financial institution make telephone
lines available on a 24-hour basis.
2. Substantially all business functions. Substantially all business functions include both
the public and the back-office operations of

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the institution. For example, if the offices of
an institution are open on Saturdays for
handling some consumer 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 that institution. In this case, Saturday
does not count toward the business-day
standard set by the regulation for reporting
lost or stolen access devices, resolving errors, etc.
3. Short hours. A financial institution may
determine, at its election, whether an abbreviated day is a business day. For example, if
an institution engages in substantially all
business functions until noon on Saturdays
instead of its usual 3 p.m. closing, it may
consider Saturday a business day.
4. Telephone line. If a financial institution
makes a telephone line available on Sundays
for reporting the loss or theft of an access
device, but performs no other business functions, Sunday is not a business day under the
substantially all business functions standard.
2(h) Electronic Terminal
1. Point-of-sale (POS) payments initiated by
telephone. Because the term ‘‘electronic terminal’’ excludes a telephone operated by a
consumer, a financial institution need not
provide a terminal receipt when:
i. A consumer uses a debit card at a public
telephone to pay for the call.
ii. A consumer initiates a transfer by a
means analogous in function to a telephone,
such as by home banking equipment or a facsimile machine.
2. POS terminals. A POS terminal that captures data electronically, for debiting or
crediting to a consumer’s asset account, is
an electronic terminal for purposes of Regulation E even if no access device is used to
initiate the transaction. See § 1005.9 for receipt requirements.
3. Teller-operated terminals. A terminal or
other computer equipment operated by an
employee of a financial institution is not an
electronic terminal for purposes of the regulation. However, transfers initiated at such
terminals by means of a consumer’s access
device (using the consumer’s PIN, for example) are EFTs and are subject to other requirements of the regulation. If an access device is used only for identification purposes
or for determining the account balance, the
transfers are not EFTs for purposes of the
regulation.

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2(k) Preauthorized Electronic Fund Transfer
1. Advance authorization. A preauthorized
electronic fund transfer under Regulation E
is one authorized by the consumer in advance of a transfer that will take place on a
recurring basis, at substantially regular in-

tervals, and will require no further action by
the consumer to initiate the transfer. In a
bill-payment system, for example, if the consumer authorizes a financial institution to
make monthly payments to a payee by
means of EFTs, and the payments take place
without further action by the consumer, the
payments are preauthorized EFTs. In contrast, if the consumer must take action each
month to initiate a payment (such as by entering instructions on a touch-tone telephone or home computer), the payments are
not preauthorized EFTs.
2(m) Unauthorized Electronic Fund Transfer
1. Transfer by institution’s employee. A consumer has no liability for erroneous or fraudulent transfers initiated by an employee of a
financial institution.
2. Authority. If a consumer furnishes an access device and grants authority to make
transfers to a person (such as a family member or co-worker) who exceeds the authority
given, the consumer is fully liable for the
transfers unless the consumer has notified
the financial institution that transfers by
that person are no longer authorized.
3. Access device obtained through robbery or
fraud. An unauthorized EFT includes a
transfer initiated by a person who obtained
the access device from the consumer through
fraud or robbery.
4. Forced initiation. An EFT at an ATM is
an unauthorized transfer if the consumer has
been induced by force to initiate the transfer.
5. Reversal of direct deposits. The reversal of
a direct deposit made in error is not an unauthorized EFT when it involves:
i. A credit made to the wrong consumer’s
account;
ii. A duplicate credit made to a consumer’s
account; or
iii. A credit in the wrong amount (for example, when the amount credited to the consumer’s account differs from the amount in
the transmittal instructions).
SECTION 1005.3

COVERAGE

3(a) General
1. Accounts covered. The requirements of
the regulation apply only to an account for
which an agreement for EFT services to or
from the account has been entered into between:
i. The consumer and the financial institution (including an account for which an access device has been issued to the consumer,
for example);
ii. The consumer and a third party (for
preauthorized debits or credits, for example),
when the account-holding institution has received notice of the agreement and the fund
transfers have begun.
2. Automated clearing house (ACH) membership. The fact that membership in an ACH

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requires a financial institution to accept
EFTs to accounts at the institution does not
make every account of that institution subject to the regulation.
3. Foreign applicability. Regulation E applies to all persons (including branches and
other offices of foreign banks located in the
United States) that offer EFT services to
residents of any state, including resident
aliens. It covers any account located in the
United States through which EFTs are offered to a resident of a state. This is the case
whether or not a particular transfer takes
place in the United States and whether or
not the financial institution is chartered in
the United States or a foreign country. The
regulation does not apply to a foreign branch
of a U.S. bank unless the EFT services are
offered in connection with an account in a
state as defined in § 1005.2(l).
3(b) Electronic Fund Transfer

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3(b)(1) Definition
1. Fund transfers covered. The term ‘‘electronic fund transfer’’ includes:
i. A deposit made at an ATM or other electronic terminal (including a deposit in cash
or by check) provided a specific agreement
exists between the financial institution and
the consumer for EFTs to or from the account to which the deposit is made.
ii. A transfer sent via ACH. For example,
social security benefits under the U.S. Treasury’s direct-deposit program are covered,
even if the listing of payees and payment
amounts reaches the account-holding institution by means of a computer printout from
a correspondent bank.
iii. A preauthorized transfer credited or
debited to an account in accordance with instructions contained on magnetic tape, even
if the financial institution holding the account sends or receives a composite check.
iv. A transfer from the consumer’s account
resulting from a debit-card transaction at a
merchant location, even if no electronic terminal is involved at the time of the transaction, if the consumer’s asset account is
subsequently debited for the amount of the
transfer.
v. A transfer via ACH where a consumer
has provided a check to enable the merchant
or other payee to capture the routing, account, and serial numbers to initiate the
transfer, whether the check is blank, partially completed, or fully completed and
signed; whether the check is presented at
POS or is mailed to a merchant or other
payee or lockbox and later converted to an
EFT; or whether the check is retained by the
consumer, the merchant or other payee, or
the payee’s financial institution.
vi. A payment made by a bill payer under
a bill-payment service available to a consumer via computer or other electronic
means, unless the terms of the bill-payment

service explicitly state that all payments, or
all payments to a particular payee or payees,
will be solely by check, draft, or similar
paper instrument drawn on the consumer’s
account, and the payee or payees that will be
paid in this manner are identified to the consumer.
2. Fund transfers not covered. The term
‘‘electronic fund transfer’’ does not include:
i. A payment that does not debit or credit
a consumer asset account, such as a payroll
allotment to a creditor to repay a credit extension (which is deducted from salary).
ii. A payment made in currency by a consumer to another person at an electronic terminal.
iii. A preauthorized check drawn by the financial institution on the consumer’s account (such as an interest or other recurring
payment to the consumer or another party),
even if the check is computer-generated.
iv. Transactions arising from the electronic collection, presentment, or return of
checks through the check collection system,
such as through transmission of electronic
check images.
3(b)(2) Electronic Fund Transfer Using
Information From a Check
1. Notice at POS not furnished due to inadvertent error. If the copy of the notice under
section 1005.3(b)(2)(ii) for electronic check
conversion (ECK) transactions is not provided to the consumer at POS because of a
bona fide unintentional error, such as when
a terminal printing mechanism jams, no violation results if the payee maintains procedures reasonably adapted to avoid such occurrences.
2. Authorization to process a transaction as
an EFT or as a check. In order to process a
transaction as an EFT, or alternatively as a
check, the payee must obtain the consumer’s
authorization to do so. A payee may, at its
option, specify the circumstances under
which a check may not be converted to an
EFT. See model clauses in appendix A–6.
3. Notice for each transfer. Generally, a notice to authorize an electronic check conversion transaction must be provided for each
transaction. For example, a consumer must
receive a notice that the transaction will be
processed as an EFT for each transaction at
POS or each time a consumer mails a check
in an accounts receivable (ARC) transaction
to pay a bill, such as a utility bill, if the
payee intends to convert a check received as
payment. Similarly, the consumer must receive notice if the payee intends to collect a
service fee for insufficient or uncollected
funds via an EFT for each transaction
whether at POS or if the consumer mails a
check to pay a bill. The notice about when
funds may be debited from a consumer’s account and the non-return of consumer

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checks by the consumer’s financial institution must also be provided for each transaction. However, if in an ARC transaction, a
payee provides a coupon book to a consumer,
for example, for mortgage loan payments,
and the payment dates and amounts are set
out in the coupon book, the payee may provide a single notice on the coupon book stating all of the required disclosures under
paragraph (b)(2) of this section in order to
obtain authorization for each conversion of a
check and any debits via EFT to the consumer’s account to collect any service fees
imposed by the payee for insufficient or uncollected funds in the consumer’s account.
The notice must be placed on a conspicuous
location of the coupon book that a consumer
can retain—for example, on the first page, or
inside the front cover.
4. Multiple payments/multiple consumers. If a
merchant or other payee will use information from a consumer’s check to initiate an
EFT from the consumer’s account, notice to
a consumer listed on the billing account that
a check provided as payment during a single
billing cycle or after receiving an invoice or
statement will be processed as a one-time
EFT or as a check transaction constitutes
notice for all checks provided in payment for
the billing cycle or the invoice for which notice has been provided, whether the check(s)
is submitted by the consumer or someone
else. The notice applies to all checks provided in payment for the billing cycle or invoice until the provision of notice on or with
the next invoice or statement. Thus, if a
merchant or other payee receives a check as
payment for the consumer listed on the billing account after providing notice that the
check will be processed as a one-time EFT,
the authorization from that consumer constitutes authorization to convert any other
checks provided for that invoice or statement. Other notices required under this
paragraph (b)(2) (for example, to collect a
service fee for insufficient or uncollected
funds via an EFT) provided to the consumer
listed on the billing account also constitutes
notice to any other consumer who may provide a check for the billing cycle or invoice.
5. Additional disclosures about ECK transactions at POS. When a payee initiates an
EFT at POS using information from the consumer’s check, and returns the check to the
consumer at POS, the payee need not provide
a notice to the consumer that the check will
not be returned by the consumer’s financial
institution.

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3(b)(3) Collection of Returned Item Fees via
Electronic Fund Transfer
1. Fees imposed by account-holding institution. The requirement to obtain a consumer’s
authorization to collect a fee via EFT for the
return of an EFT or check unpaid applies
only to the person that intends to initiate an

EFT to collect the returned item fee from
the consumer’s account. The authorization
requirement does not apply to any fees assessed by the consumer’s account-holding financial institution when it returns the unpaid underlying EFT or check or pays the
amount of an overdraft.
2. Accounts receivable transactions. In an
ARC transaction where a consumer sends in
a payment for amounts owed (or makes an
in-person payment at a biller’s physical location, such as when a consumer makes a loan
payment at a bank branch or places a payment in a drop box), a person seeking to electronically collect a fee for items returned
unpaid must obtain the consumer’s authorization to collect the fee in this manner. A
consumer authorizes a person to electronically collect a returned item fee when the
consumer receives notice, typically on an invoice or statement, that the person may collect the fee through an EFT to the consumer’s account, and the consumer goes forward with the underlying transaction by providing payment. The notice must also state
the dollar amount of the fee. However, an explanation of how that fee will be determined
may be provided in place of the dollar
amount of the fee if the fee may vary due to
the amount of the transaction or due to
other factors, such as the number of days the
underlying transaction is left outstanding.
For example, if a state law permits a maximum fee of $30 or 10% of the underlying
transaction, whichever is greater, the person
collecting the fee may explain how the fee is
determined, rather than state a specific dollar amount for the fee.
3. Disclosure of dollar amount of fee for POS
transactions. The notice provided to the consumer in connection with a POS transaction
under § 1005.3(b)(3)(ii) must state the amount
of the fee for a returned item if the dollar
amount of the fee can be calculated at the
time the notice is provided or mailed. For
example, if notice is provided to the consumer at the time of the transaction, if the
applicable state law sets a maximum fee
that may be collected for a returned item
based on the amount of the underlying transaction (such as where the amount of the fee
is expressed as a percentage of the underlying transaction), the person collecting the
fee must state the actual dollar amount of
the fee on the notice provided to the consumer. Alternatively, if the amount of the
fee to be collected cannot be calculated at
the time of the transaction (for example,
where the amount of the fee will depend on
the number of days a debt continues to be
owed), the person collecting the fee may provide a description of how the fee will be determined on both the posted notice as well as
on the notice provided at the time of the
transaction. However, if the person collecting the fee elects to send the consumer
notice after the person has initiated an EFT

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Bur. of Consumer Financial Protection

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to collect the fee, that notice must state the
amount of the fee to be collected.
4. Third party providing notice. The person
initiating an EFT to a consumer’s account
to electronically collect a fee for an item returned unpaid may obtain the authorization
and provide the notices required under
§ 1005.3(b)(3) through third parties, such as
merchants.
3(c) Exclusions From Coverage
3(c)(1) Checks
1. Re-presented checks. The electronic representment of a returned check is not covered by Regulation E because the transaction originated by check. Regulation E
does apply, however, to any fee debited via
an EFT from a consumer’s account by the
payee because the check was returned for insufficient or uncollected funds. The person
debiting the fee electronically must obtain
the consumer’s authorization.
2. Check used to capture information for a
one-time EFT. See comment 3(b)(1)–1.v.
3(c)(2) Check Guarantee or Authorization
1. Memo posting. Under a check guarantee
or check authorization service, debiting of
the consumer’s account occurs when the
check or draft is presented for payment.
These services are exempt from coverage,
even when a temporary hold on the account
is memo-posted electronically at the time of
authorization.

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3(c)(3) Wire or Other Similar Transfers
1. Fedwire and ACH. If a financial institution makes a fund transfer to a consumer’s
account after receiving funds through
Fedwire or a similar network, the transfer
by ACH is covered by the regulation even
though the Fedwire or network transfer is
exempt.
2. Article 4A. Financial institutions that
offer telephone-initiated Fedwire payments
are subject to the requirements of UCC section 4A–202, which encourages verification of
Fedwire payment orders pursuant to a security procedure established by agreement between the consumer and the receiving bank.
These transfers are not subject to Regulation E and the agreement is not considered a
telephone plan if the service is offered separately from a telephone bill-payment or
other prearranged plan subject to Regulation
E. Regulation J of the Board of Governors of
the Federal Reserve System (12 CFR part
210) specifies the rules applicable to funds
handled by Federal Reserve Banks. To ensure that the rules for all fund transfers
through Fedwire are consistent, the Board of
Governors used its preemptive authority
under UCC section 4A–107 to determine that
subpart B of the Board’s Regulation J, including the provisions of Article 4A, applies

to all fund transfers through Fedwire, even if
a portion of the fund transfer is governed by
the EFTA. The portion of the fund transfer
that is governed by the EFTA is not governed by subpart B of the Board’s Regulation
J.
3. Similar fund transfer systems. Fund transfer systems that are similar to Fedwire include the Clearing House Interbank Payments System (CHIPS), Society for Worldwide Interbank Financial Telecommunication (SWIFT), Telex, and transfers made
on the books of correspondent banks.
3(c)(4) Securities and Commodities Transfers
1. Coverage. The securities exemption applies to securities and commodities that may
be sold by a registered broker-dealer or futures commission merchant, even when the
security or commodity itself is not regulated
by the Securities and Exchange Commission
or the Commodity Futures Trading Commission.
2. Example of exempt transfer. The exemption applies to a transfer involving a transfer
initiated by a telephone order to a stockbroker to buy or sell securities or to exercise
a margin call.
3. Examples of nonexempt transfers. The exemption does not apply to a transfer involving:
i. A debit card or other access device that
accesses a securities or commodities account
such as a money market mutual fund and
that the consumer uses for purchasing goods
or services or for obtaining cash.
ii. A payment of interest or dividends into
the consumer’s account (for example, from a
brokerage firm or from a Federal Reserve
Bank for government securities).
3(c)(5) Automatic Transfers by Account-Holding
Institution
1. Automatic transfers exempted. The exemption applies to:
i. Electronic debits or credits to consumer
accounts for check charges, stop-payment
charges, non-sufficient funds (NSF) charges,
overdraft charges, provisional credits, error
adjustments, and similar items that are initiated automatically on the occurrence of
certain events.
ii. Debits to consumer accounts for group
insurance available only through the financial institution and payable only by means
of an aggregate payment from the institution to the insurer.
iii. EFTs between a thrift institution and
its paired commercial bank in the state of
Rhode Island, which are deemed under state
law to be intra-institutional.
iv. Automatic transfers between a consumer’s accounts within the same financial
institution, even if the account holders on
the two accounts are not identical.

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2. Automatic transfers not exempted. Transfers between accounts of the consumer at affiliated institutions (such as between a bank
and its subsidiary or within a holding company) are not intra-institutional transfers,
and thus do not qualify for the exemption.
3(c)(6) Telephone-Initiated Transfers
1. Written plan or agreement. A transfer that
the consumer initiates by telephone is covered by Regulation E if the transfer is made
under a written plan or agreement between
the consumer and the financial institution
making the transfer. A written statement
available to the public or to account holders
that describes a service allowing a consumer
to initiate transfers by telephone constitutes
a plan; for example, a brochure, or material
included with periodic statements. The following, however, do not by themselves constitute a written plan or agreement:
i. A hold-harmless agreement on a signature card that protects the institution if the
consumer requests a transfer.
ii. A legend on a signature card, periodic
statement, or passbook that limits the number of telephone-initiated transfers the consumer can make from a savings account because of reserve requirements under Regulation D of the Board of Governors of the Federal Reserve System (12 CFR part 204).
iii. An agreement permitting the consumer
to approve by telephone the rollover of funds
at the maturity of an instrument.
2. Examples of covered transfers. When a
written plan or agreement has been entered
into, a transfer initiated by a telephone call
from a consumer is covered even though:
i. An employee of the financial institution
completes the transfer manually (for example, by means of a debit memo or deposit
slip).
ii. The consumer is required to make a separate request for each transfer.
iii. The consumer uses the plan infrequently.
iv. The consumer initiates the transfer via
a facsimile machine.
v. The consumer initiates the transfer
using a financial institution’s audio-response
or voice-response telephone system.

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3(c)(7) Small Institutions
1. Coverage. This exemption is limited to
preauthorized transfers; institutions that
offer other EFTs must comply with the applicable sections of the regulation as to such
services. The preauthorized transfers remain
subject to sections 913, 916, and 917 of the Act
and § 1005.10(e), and are therefore exempt
from UCC Article 4A.

SECTION 1005.4 GENERAL DISCLOSURE
REQUIREMENTS; JOINTLY OFFERED SERVICES
4(a) Form of Disclosures
1. General. Although no particular rules
govern type size, number of pages, or the relative conspicuousness of various terms, the
disclosures must be in a clear and readily understandable written form that the consumer
may retain. Numbers or codes are considered
readily understandable if explained elsewhere on the disclosure form.
2. Foreign language disclosures. Disclosures
may be made in languages other than
English, provided they are available in
English upon request.
SECTION 1005.5

ISSUANCE OF ACCESS DEVICES

1. Coverage. The provisions of this section
limit the circumstances under which a financial institution may issue an access device to
a consumer. Making an additional account
accessible through an existing access device
is equivalent to issuing an access device and
is subject to the limitations of this section.
5(a) Solicited Issuance
Paragraph 5(a)(1)
1. Joint account. For a joint account, a financial institution may issue an access device to each account holder if the requesting
holder specifically authorizes the issuance.
2. Permissible forms of request. The request
for an access device may be written or oral
(for example, in response to a telephone solicitation by a card issuer).
Paragraph 5(a)(2)
1. One-for-one rule. In issuing a renewal or
substitute access device, only one renewal or
substitute device may replace a previously
issued device. For example, only one new
card and PIN may replace a card and PIN
previously issued. A financial institution
may provide additional devices at the time it
issues the renewal or substitute access device, however, provided the institution complies with § 1005.5(b). See comment 5(b)–5. If
the replacement device or the additional device permits either fewer or additional types
of electronic fund transfer services, a
change-in-terms notice or new disclosures
are required.
2. Renewal or substitution by a successor institution. A successor institution is an entity
that replaces the original financial institution (for example, following a corporate
merger or acquisition) or that acquires accounts or assumes the operation of an EFT
system.
5(b) Unsolicited Issuance
1. Compliance. A financial institution may
issue an unsolicited access device (such as
the combination of a debit card and PIN) if

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the institution’s ATM system has been programmed not to accept the access device
until after the consumer requests and the institution validates the device. Merely instructing a consumer not to use an unsolicited debit card and PIN until after the institution verifies the consumer’s identity does
not comply with the regulation.
2. PINs. A financial institution may impose
no liability on a consumer for unauthorized
transfers involving an unsolicited access device until the device becomes an ‘‘accepted
access device’’ under the regulation. A card
and PIN combination may be treated as an
accepted access device once the consumer
has used it to make a transfer.
3. Functions of PIN. If an institution issues
a PIN at the consumer’s request, the
issuance may constitute both a way of validating the debit card and the means to identify the consumer (required as a condition of
imposing liability for unauthorized transfers).
4. Verification of identity. To verify the consumer’s identity, a financial institution may
use any reasonable means, such as a photograph, fingerprint, personal visit, signature
comparison, or personal information about
the consumer. However, even if reasonable
means were used, if an institution fails to
verify correctly the consumer’s identity and
an imposter succeeds in having the device
validated, the consumer is not liable for any
unauthorized transfers from the account.
5. Additional access devices in a renewal or
substitution. A financial institution may
issue more than one access device in connection with the renewal or substitution of a
previously issued accepted access device,
provided that any additional access device
(beyond the device replacing the accepted access device) is not validated at the time it is
issued, and the institution complies with the
other requirements of § 1005.5(b). The institution may, if it chooses, set up the validation
procedure such that both the device replacing the previously issued device and the additional device are not validated at the time
they are issued, and validation will apply to
both devices. If the institution sets up the
validation procedure in this way, the institution should provide a clear and readily understandable disclosure to the consumer that
both devices are unvalidated and that validation will apply to both devices.
SECTION 1005.6 LIABILITY OF CONSUMER FOR
UNAUTHORIZED TRANSFERS

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6(a) Conditions for Liability
1. Means of identification. A financial institution may use various means for identifying
the consumer to whom the access device is
issued, including but not limited to:
i. Electronic or mechanical confirmation
(such as a PIN).

ii. Comparison of the consumer’s signature, fingerprint, or photograph.
2. Multiple users. When more than one access device is issued for an account, the financial institution may, but need not, provide a separate means to identify each user
of the account.
6(b) Limitations on Amount of Liability
1. Application of liability provisions. There
are three possible tiers of consumer liability
for unauthorized EFTs depending on the situation. A consumer may be liable for: (1) up
to $50; (2) up to $500; or (3) an unlimited
amount depending on when the unauthorized
EFT occurs. More than one tier may apply to
a given situation because each corresponds
to a different (sometimes overlapping) time
period or set of conditions.
2. Consumer negligence. Negligence by the
consumer cannot be used as the basis for imposing greater liability than is permissible
under Regulation E. Thus, consumer behavior that may constitute negligence under
state law, such as writing the PIN on a debit
card or on a piece of paper kept with the
card, does not affect the consumer’s liability
for unauthorized transfers. (However, refer
to comment 2(m)–2 regarding termination of
the authority of given by the consumer to
another person.)
3. Limits on liability. The extent of the consumer’s liability is determined solely by the
consumer’s promptness in reporting the loss
or theft of an access device. Similarly, no
agreement between the consumer and an institution may impose greater liability on the
consumer for an unauthorized transfer than
the limits provided in Regulation E.
6(b)(1) Timely Notice Given
1. $50 limit applies. The basic liability limit
is $50. For example, the consumer’s card is
lost or stolen on Monday and the consumer
learns of the loss or theft on Wednesday. If
the consumer notifies the financial institution within two business days of learning of
the loss or theft (by midnight Friday), the
consumer’s liability is limited to $50 or the
amount of the unauthorized transfers that
occurred before notification, whichever is
less.
2. Knowledge of loss or theft of access device.
The fact that a consumer has received a periodic statement that reflects unauthorized
transfers may be a factor in determining
whether the consumer had knowledge of the
loss or theft, but cannot be deemed to represent conclusive evidence that the consumer had such knowledge.
3. Two business day rule. The two business
day period does not include the day the consumer learns of the loss or theft or any day

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12 CFR Ch. X (1–1–16 Edition)

that is not a business day. The rule is calculated based on two 24-hour periods, without regard to the financial institution’s business hours or the time of day that the consumer learns of the loss or theft. For example, a consumer learns of the loss or theft at
6 p.m. on Friday. Assuming that Saturday is
a business day and Sunday is not, the two
business day period begins on Saturday and
expires at 11:59 p.m. on Monday, not at the
end of the financial institution’s business
day on Monday.
6(b)(2) Timely Notice Not Given
1. $500 limit applies. The second tier of liability is $500. For example, the consumer’s
card is stolen on Monday and the consumer
learns of the theft that same day. The consumer reports the theft on Friday. The $500
limit applies because the consumer failed to
notify the financial institution within two
business days of learning of the theft (which
would have been by midnight Wednesday).
How much the consumer is actually liable
for, however, depends on when the unauthorized transfers take place. In this example, assume a $100 unauthorized transfer was made
on Tuesday and a $600 unauthorized transfer
on Thursday. Because the consumer is liable
for the amount of the loss that occurs within
the first two business days (but no more than
$50), plus the amount of the unauthorized
transfers that occurs after the first two business days and before the consumer gives notice, the consumer’s total liability is $500
($50 of the $100 transfer plus $450 of the $600
transfer, in this example). But if $600 was
taken on Tuesday and $100 on Thursday, the
consumer’s maximum liability would be $150
($50 of the $600 plus $100).

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6(b)(3) Periodic Statement; Timely Notice Not
Given
1. Unlimited liability applies. The standard of
unlimited liability applies if unauthorized
transfers appear on a periodic statement,
and may apply in conjunction with the first
two tiers of liability. If a periodic statement
shows an unauthorized transfer made with a
lost or stolen debit card, the consumer must
notify the financial institution within 60 calendar days after the periodic statement was
sent; otherwise, the consumer faces unlimited liability for all unauthorized transfers
made after the 60-day period. The consumer’s
liability for unauthorized transfers before
the statement is sent, and up to 60 days following, is determined based on the first two
tiers of liability: up to $50 if the consumer
notifies the financial institution within two
business days of learning of the loss or theft
of the card and up to $500 if the consumer notifies the institution after two business days
of learning of the loss or theft.
2. Transfers not involving access device. The
first two tiers of liability do not apply to un-

authorized transfers from a consumer’s account made without an access device. If,
however, the consumer fails to report such
unauthorized transfers within 60 calendar
days of the financial institution’s transmittal of the periodic statement, the consumer may be liable for any transfers occurring after the close of the 60 days and before
notice is given to the institution. For example, a consumer’s account is electronically
debited for $200 without the consumer’s authorization and by means other than the
consumer’s access device. If the consumer
notifies the institution within 60 days of the
transmittal of the periodic statement that
shows the unauthorized transfer, the consumer has no liability. However, if in addition to the $200, the consumer’s account is
debited for a $400 unauthorized transfer on
the 61st day and the consumer fails to notify
the institution of the first unauthorized
transfer until the 62nd day, the consumer
may be liable for the full $400.
6(b)(4) Extension of Time Limits
1. Extenuating circumstances. Examples of
circumstances that require extension of the
notification periods under this section include the consumer’s extended travel or hospitalization.
6(b)(5) Notice to Financial Institution
1. Receipt of notice. A financial institution
is considered to have received notice for purposes of limiting the consumer’s liability if
notice is given in a reasonable manner, even
if the consumer notifies the institution but
uses an address or telephone number other
than the one specified by the institution.
2. Notice by third party. Notice to a financial institution by a person acting on the
consumer’s behalf is considered valid under
this section. For example, if a consumer is
hospitalized and unable to report the loss or
theft of an access device, notice is considered
given when someone acting on the consumer’s behalf notifies the bank of the loss
or theft. A financial institution may require
appropriate documentation from the person
representing the consumer to establish that
the person is acting on the consumer’s behalf.
3. Content of notice. Notice to a financial institution is considered given when a consumer takes reasonable steps to provide the
institution with the pertinent account information. Even when the consumer is unable
to provide the account number or the card
number in reporting a lost or stolen access
device or an unauthorized transfer, the notice effectively limits the consumer’s liability if the consumer otherwise identifies sufficiently the account in question. For example, the consumer may identify the account
by the name on the account and the type of
account in question.

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Bur. of Consumer Financial Protection
SECTION 1005.7

Pt. 1005, Supp. I

INITIAL DISCLOSURES

7(a) Timing of Disclosures
1. Early disclosures. Disclosures given by a
financial institution earlier than the regulation requires (for example, when the consumer opens a checking account) need not be
repeated when the consumer later enters
into an agreement with a third party to initiate preauthorized transfers to or from the
consumer’s account, unless the terms and
conditions differ from those that the institution previously disclosed. This interpretation also applies to any notice provided
about one-time EFTs from a consumer’s account initiated using information from the
consumer’s check. On the other hand, if an
agreement for EFT services to be provided
by an account-holding institution is directly
between the consumer and the account-holding institution, disclosures must be given in
close proximity to the event requiring disclosure, for example, when the consumer
contracts for a new service.
2. Lack of advance notice of a transfer.
Where a consumer authorizes a third party
to debit or credit the consumer’s account, an
account-holding institution that has not received advance notice of the transfer or
transfers must provide the required disclosures as soon as reasonably possible after the
first debit or credit is made, unless the institution has previously given the disclosures.
3. Addition of new accounts. If a consumer
opens a new account permitting EFTs at a financial institution, and the consumer already has received Regulation E disclosures
for another account at that institution, the
institution need only disclose terms and conditions that differ from those previously
given.
4. Addition of service in interchange systems.
If a financial institution joins an interchange or shared network system (which
provides access to terminals operated by
other institutions), disclosures are required
for additional EFT services not previously
available to consumers if the terms and conditions differ from those previously disclosed.
5. Disclosures covering all EFT services offered. An institution may provide disclosures
covering all EFT services that it offers, even
if some consumers have not arranged to use
all services.
7(b) Content of Disclosures

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7(b)(1) Liability of Consumer
1. No liability imposed by financial institution. If a financial institution chooses to impose zero liability for unauthorized EFTs, it
need not provide the liability disclosures. If
the institution later decides to impose liability, however, it must first provide the disclosures.

2. Preauthorized transfers. If the only EFTs
from an account are preauthorized transfers,
liability could arise if the consumer fails to
report unauthorized transfers reflected on a
periodic statement. To impose such liability
on the consumer, the institution must have
disclosed the potential liability and the telephone number and address for reporting unauthorized transfers.
3. Additional information. At the institution’s option, the summary of the consumer’s liability may include advice on
promptly reporting unauthorized transfers
or the loss or theft of the access device.
7(b)(2) Telephone Number and Address
1. Disclosure of telephone numbers. An institution may use the same or different telephone numbers in the disclosures for the purpose of:
i. Reporting the loss or theft of an access
device or possible unauthorized transfers;
ii. Inquiring about the receipt of a
preauthorized credit;
iii. Stopping payment of a preauthorized
debit;
iv. Giving notice of an error.
2. Location of telephone number. The telephone number need not be incorporated into
the text of the disclosure; for example, the
institution may instead insert a reference to
a telephone number that is readily available
to the consumer, such as ‘‘Call your branch
office. The number is shown on your periodic
statement.’’ However, an institution must
provide a specific telephone number and address, on or with the disclosure statement,
for reporting a lost or stolen access device or
a possible unauthorized transfer.
7(b)(4) Types of Transfers; Limitations
1. Security limitations. Information about
limitations on the frequency and dollar
amount of transfers generally must be disclosed in detail, even if related to security
aspects of the system. If the confidentiality
of certain details is essential to the security
of an account or system, these details may
be withheld (but the fact that limitations
exist must still be disclosed). For example,
an institution limits cash ATM withdrawals
to $100 per day. The institution may disclose
that daily withdrawal limitations apply and
need not disclose that the limitations may
not always be in force (such as during periods when its ATMs are off-line).
2. Restrictions on certain deposit accounts. A
limitation on account activity that restricts
the consumer’s ability to make EFTs must
be disclosed even if the restriction also applies to transfers made by non-electronic
means. For example, Regulation D of the
Board of Governors of the Federal Reserve
System (12 CFR part 204) restricts the number of payments to third parties that may be
made from a money market deposit account;

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12 CFR Ch. X (1–1–16 Edition)

an institution that does not execute fund
transfers in excess of those limits must disclose the restriction as a limitation on the
frequency of EFTs.
3. Preauthorized transfers. Financial institutions are not required to list preauthorized
transfers among the types of transfers that a
consumer can make.
4. One-time EFTs initiated using information
from a check. Financial institutions must disclose the fact that one-time EFTs initiated
using information from a consumer’s check
are among the types of transfers that a consumer can make. See appendix A–2.
7(b)(5) Fees
1. Disclosure of EFT fees. An institution is
required to disclose all fees for EFTs or the
right to make them. Others fees (for example, minimum-balance fees, stop-payment
fees, or account overdrafts) may, but need
not, be disclosed. But see Regulation DD, 12
CFR part 1030. An institution is not required
to disclose fees for inquiries made at an ATM
since no transfer of funds is involved.
2. Fees also applicable to non-EFT. A peritem fee for EFTs must be disclosed even if
the same fee is imposed on non-electronic
transfers. If a per-item fee is imposed only
under certain conditions, such as when the
transactions in the cycle exceed a certain
number, those conditions must be disclosed.
Itemization of the various fees may be provided on the disclosure statement or on an
accompanying document that is referenced
in the statement.
3. Interchange system fees. Fees paid by the
account-holding institution to the operator
of a shared or interchange ATM system need
not be disclosed, unless they are imposed on
the consumer by the account-holding institution. Fees for use of an ATM that are debited directly from the consumer’s account by
an institution other than the account-holding institution (for example, fees included in
the transfer amount) need not be disclosed.
See § 1005.7(b)(11) for the general notice requirement regarding fees that may be imposed by ATM operators and by a network
used to complete the transfer.
7(b)(9) Confidentiality

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1. Information provided to third parties. An
institution must describe the circumstances
under which any information relating to an
account to or from which EFTs are permitted will be made available to third parties, not just information concerning those
EFTs. The term ‘‘third parties’’ includes affiliates such as other subsidiaries of the
same holding company.
7(b)(10) Error Resolution
1. Substantially similar. The error resolution
notice must be substantially similar to the
model form in appendix A of part 1005. An in-

stitution may use different wording so long
as the substance of the notice remains the
same, may delete inapplicable provisions (for
example, the requirement for written confirmation of an oral notification), and may
substitute substantive state law requirements affording greater consumer protection
than Regulation E.
2. Extended time-period for certain transactions. To take advantage of the longer time
periods
for
resolving
errors
under
§ 1005.11(c)(3) (for new accounts as defined in
Regulation CC of the Board of Governors of
the Federal Reserve System (12 CFR part
229), transfers initiated outside the United
States, or transfers resulting from POS
debit-card transactions), a financial institution must have disclosed these longer time
periods. Similarly, an institution that relies
on the exception from provisional crediting
in § 1005.11(c)(2) for accounts subject to Regulation T of the Board of Governors of the
Federal Reserve System (12 CFR part 220)
must have disclosed accordingly.
7(c) Addition of Electronic Fund Transfer
Services
1. Addition of electronic check conversion
services. One-time EFTs initiated using information from a consumer’s check are a new
type of transfer requiring new disclosures, as
applicable. See appendix A–2.
SECTION 1005.8 CHANGE-IN-TERMS NOTICE;
ERROR RESOLUTION NOTICE
8(a) Change-in-Terms Notice
1. Form of notice. No specific form or wording is required for a change-in-terms notice.
The notice may appear on a periodic statement, or may be given by sending a copy of
a revised disclosure statement, provided attention is directed to the change (for example, in a cover letter referencing the changed
term).
2. Changes not requiring notice. The following changes do not require disclosure:
i. Closing some of an institution’s ATMs;
ii. Cancellation of an access device.
3. Limitations on transfers. When the initial
disclosures omit details about limitations
because secrecy is essential to the security
of the account or system, a subsequent increase in those limitations need not be disclosed if secrecy is still essential. If, however, an institution had no limits in place
when the initial disclosures were given and
now wishes to impose limits for the first
time, it must disclose at least the fact that
limits
have
been
adopted.
See
also
§ 1005.7(b)(4) and the related commentary.
4. Change in telephone number or address.
When a financial institution changes the
telephone number or address used for reporting possible unauthorized transfers, a
change-in-terms notice is required only if
the institution will impose liability on the

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Bur. of Consumer Financial Protection

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consumer for unauthorized transfers under
§ 1005.6. See also § 1005.6(a) and the related
commentary.
8(b) Error Resolution Notice
1. Change between annual and periodic notice. If an institution switches from an annual to a periodic notice, or vice versa, the
first notice under the new method must be
sent no later than 12 months after the last
notice sent under the old method.
2. Exception for new accounts. For new accounts, disclosure of the longer error resolution time periods under § 1005.11(c)(3) is not
required in the annual error resolution notice or in the notice that may be provided
with each periodic statement as an alternative to the annual notice.
SECTION 1005.9 RECEIPTS AT ELECTRONIC
TERMINALS; PERIODIC STATEMENTS
9(a) Receipts at Electronic Terminals
1. Receipts furnished only on request. The
regulation requires that a receipt be ‘‘made
available.’’ A financial institution may program its electronic terminals to provide a
receipt only to consumers who elect to receive one.
2. Third party providing receipt. An accountholding institution may make terminal receipts available through third parties such
as merchants or other financial institutions.
3. Inclusion of promotional material. A financial institution may include promotional
material on receipts if the required information is set forth clearly (for example, by separating it from the promotional material). In
addition, a consumer may not be required to
surrender the receipt or that portion containing the required disclosures in order to
take advantage of a promotion.
4. Transfer not completed. The receipt requirement does not apply to a transfer that
is initiated but not completed (for example,
if the ATM is out of currency or the consumer decides not to complete the transfer).
5. Receipts not furnished due to inadvertent
error. If a receipt is not provided to the consumer because of a bona fide unintentional
error, such as when a terminal runs out of
paper or the mechanism jams, no violation
results if the financial institution maintains
procedures reasonably adapted to avoid such
occurrences.
6. Multiple transfers. If the consumer makes
multiple transfers at the same time, the financial institution may document them on a
single or on separate receipts.

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9(a)(1) Amount
1. Disclosure of transaction fee. The required
display of a fee amount on or at the terminal
may be accomplished by displaying the fee
on a sign at the terminal or on the terminal
screen for a reasonable duration. Displaying

the fee on a screen provides adequate notice,
as long as a consumer is given the option to
cancel the transaction after receiving notice
of a fee. See § 1005.16 for the notice requirements applicable to ATM operators that impose a fee for providing EFT services.
2. Relationship between § 1005.9(a)(1) and
§ 1005.16. The requirements of §§ 1005.9(a)(1)
and 1005.16 are similar but not identical.
i. Section 1005.9(a)(1) requires that if the
amount of the transfer as shown on the receipt will include the fee, then the fee must
be disclosed either on a sign on or at the terminal, or on the terminal screen. Section
1005.16 requires disclosure both on a sign on
or at the terminal (in a prominent and conspicuous location) and on the terminal
screen. Section 1005.16 permits disclosure on
a paper notice as an alternative to the onscreen disclosure.
ii. The disclosure of the fee on the receipt
under § 1005.9(a)(1) cannot be used to comply
with the alternative paper disclosure procedure under § 1005.16, if the receipt is provided
at the completion of the transaction because, pursuant to the statute, the paper notice must be provided before the consumer is
committed to paying the fee.
iii. Section 1005.9(a)(1) applies to any type
of electronic terminal as defined in Regulation E (for example, to POS terminals as
well as to ATMs), while § 1005.16 applies only
to ATMs.
9(a)(2) Date
1. Calendar date. The receipt must disclose
the calendar date on which the consumer
uses the electronic terminal. An accounting
or business date may be disclosed in addition
if the dates are clearly distinguished.
9(a)(3) Type
1. Identifying transfer and account. Examples identifying the type of transfer and the
type of the consumer’s account include
‘‘withdrawal from checking,’’ ‘‘transfer from
savings to checking,’’ or ‘‘payment from savings.’’
2. Exception. Identification of an account is
not required when the consumer can access
only one asset account at a particular time
or terminal, even if the access device can
normally be used to access more than one account. For example, the consumer may be
able to access only one particular account at
terminals not operated by the account-holding institution, or may be able to access only
one particular account when the terminal is
off-line. The exception is available even if, in
addition to accessing one asset account, the
consumer also can access a credit line.
3. Access to multiple accounts. If the consumer can use an access device to make
transfers to or from different accounts of the
same type, the terminal receipt must specify

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12 CFR Ch. X (1–1–16 Edition)

which account was accessed, such as ‘‘withdrawal from checking I’’ or ‘‘withdrawal
from checking II.’’ If only one account besides the primary checking account can be
debited, the receipt can identify the account
as ‘‘withdrawal from other account.’’
4. Generic descriptions. Generic descriptions
may be used for accounts that are similar in
function, such as share draft or NOW accounts and checking accounts. In a shared
system, for example, when a credit union
member initiates transfers to or from a
share draft account at a terminal owned or
operated by a bank, the receipt may identify
a withdrawal from the account as a ‘‘withdrawal from checking.’’
5. Point-of-sale transactions. There is no prescribed terminology for identifying a transfer at a merchant’s POS terminal. A transfer
may be identified, for example, as a purchase, a sale of goods or services, or a payment to a third party. When a consumer obtains cash from a POS terminal in addition
to purchasing goods, or obtains cash only,
the documentation need not differentiate the
transaction from one involving the purchase
of goods.
9(a)(5) Terminal Location
1. Options for identifying terminal. The institution may provide either:
i. The city, state or foreign country, and
the information in § 1005.9(a)(5) (i), (ii), or
(iii), or
ii. A number or a code identifying the terminal. If the institution chooses the second
option, the code or terminal number identifying the terminal where the transfer is initiated may be given as part of a transaction
code.
2. Omission of city name. The city may be
omitted if the generally accepted name (such
as a branch name) contains the city name.
3. Omission of a state. A state may be omitted from the location information on the receipt if:
i. All the terminals owned or operated by
the financial institution providing the statement (or by the system in which it participates) are located in that state, or
ii. All transfers occur at terminals located
within 50 miles of the financial institution’s
main office.
4. Omission of a city and state. A city and
state may be omitted if all the terminals
owned or operated by the financial institution providing the statement (or by the system in which it participates) are located in
the same city.

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Paragraph 9(a)(5)(i)
1. Street address. The address should include
number and street (or intersection); the
number (or intersecting street) may be omitted if the street alone uniquely identifies the
terminal location.

Paragraph 9(a)(5)(ii)
1. Generally accepted name. Examples of a
generally accepted name for a specific location include a branch of the financial institution, a shopping center, or an airport.
Paragraph 9(a)(5)(iii)
1. Name of owner or operator of terminal. Examples of an owner or operator of a terminal
are a financial institution or a retail merchant.
9(a)(6) Third Party Transfer
1. Omission of third-party name. The receipt
need not disclose the third-party name if the
name is provided by the consumer in a form
that is not machine readable (for example, if
the consumer indicates the payee by depositing a payment stub into the ATM). If, on
the other hand, the consumer keys in the
identity of the payee, the receipt must identify the payee by name or by using a code
that is explained elsewhere on the receipt.
2. Receipt as proof of payment. Documentation required under the regulation constitutes prima facie proof of a payment to
another person, except in the case of a terminal receipt documenting a deposit.
9(b) Periodic Statements
1. Periodic cycles. Periodic statements may
be sent on a cycle that is shorter than
monthly. The statements must correspond to
periodic cycles that are reasonably equal,
that is, do not vary by more than four days
from the regular cycle. The requirement of
reasonably equal cycles does not apply when
an institution changes cycles for operational
or other reasons, such as to establish a new
statement day or date.
2. Interim statements. Generally, a financial
institution must provide periodic statements
for each monthly cycle in which an EFT occurs, and at least quarterly if a transfer has
not occurred. Where EFTs occur between
regularly-scheduled cycles, interim statements must be provided. For example, if an
institution issues quarterly statements at
the end of March, June, September and December, and the consumer initiates an EFT
in February, an interim statement for February must be provided. If an interim statement contains interest or rate information,
the institution must comply with Regulation
DD, 12 CFR 1030.6.
3. Inactive accounts. A financial institution
need not send statements to consumers
whose accounts are inactive as defined by
the institution.
4. Statement pickup. A financial institution
may permit, but may not require, consumers
to pick up their periodic statements at the
financial institution.
5. Periodic statements limited to EFT activity.
A financial institution that uses a passbook
as the primary means for displaying account

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Bur. of Consumer Financial Protection

Pt. 1005, Supp. I

activity, but also allows the account to be
debited electronically, may provide a periodic statement requirement that reflects
only the EFTs and other required disclosures
(such as charges, account balances, and address and telephone number for inquiries).
See § 1005.9(c)(1)(i) for the exception applicable to preauthorized transfers for passbook
accounts.
6. Codes and accompanying documents. To
meet the documentation requirements for
periodic statements, a financial institution
may:
i. Include copies of terminal receipts to reflect transfers initiated by the consumer at
electronic terminals;
ii. Enclose posting memos, deposit slips,
and other documents that, together with the
statement, disclose all the required information;
iii. Use codes for names of third parties or
terminal locations and explain the information to which the codes relate on an accompanying document.
9(b)(1) Transaction Information
1. Information obtained from others. While financial institutions must maintain reasonable procedures to ensure the integrity of
data obtained from another institution, a
merchant, or other third parties, verification
of each transfer that appears on the periodic
statement is not required.
Paragraph 9(b)(1)(i)
1. Incorrect deposit amount. If a financial institution determines that the amount actually deposited at an ATM is different from
the amount entered by the consumer, the institution need not immediately notify the
consumer of the discrepancy. The periodic
statement reflecting the deposit may show
either the correct amount of the deposit or
the amount entered by the consumer along
with the institution’s adjustment.

Paragraph 9(b)(1)(v)
1. Recurring payments by government agency.
The third-party name for recurring payments from Federal, state, or local governments need not list the particular agency.
For example, ‘‘U.S. gov’t’’ or ‘‘N.Y. sal’’ will
suffice.
2. Consumer as third-party payee. If a consumer makes an electronic fund transfer to
another consumer, the financial institution
must identify the recipient by name (not
just by an account number, for example).
3. Terminal location/third party. A single
entry may be used to identify both the terminal location and the name of the third
party to or from whom funds are transferred.
For example, if a consumer purchases goods
from a merchant, the name of the party to
whom funds are transferred (the merchant)
and the location of the terminal where the
transfer is initiated will be satisfied by a disclosure such as ‘‘XYZ Store, Anytown,
Ohio.’’
4. Account-holding institution as third party.
Transfers to the account-holding institution
(by ATM, for example) must show the institution as the recipient, unless other information on the statement (such as, ‘‘loan payment from checking’’) clearly indicates that
the payment was to the account-holding institution.
5. Consistency in third-party identity. The
periodic statement must disclose a thirdparty name as it appeared on the receipt,
whether it was, for example, the ‘‘dba’’
(doing business as) name of the third party
or the parent corporation’s name.
6. Third-party identity on deposits at electronic terminal. A financial institution need
not identify third parties whose names appear on checks, drafts, or similar paper instruments deposited to the consumer’s account at an electronic terminal.

Paragraph 9(b)(1)(iii)

9(b)(3) Fees

1. Type of transfer. There is no prescribed
terminology for describing a type of transfer.
Placement of the amount of the transfer in
the debit or the credit column is sufficient if
other information on the statement, such as
a terminal location or third-party name, enables the consumer to identify the type of
transfer.

1. Disclosure of fees. The fees disclosed may
include fees for EFTs and for other non-electronic services, and both fixed fees and peritem fees; they may be given as a total or
may be itemized in part or in full.
2. Fees in interchange system. An accountholding institution must disclose any fees it
imposes on the consumer for EFTs, including
fees for ATM transactions in an interchange
or shared ATM system. Fees for use of an
ATM imposed on the consumer by an institution other than the account-holding institution and included in the amount of the transfer by the terminal-operating institution
need not be separately disclosed on the periodic statement.
3. Finance charges. The requirement to disclose any fees assessed against the account

Paragraph 9(b)(1)(iv)

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entity that owns or operates the terminal,
plus the city and state.

1. Nonproprietary terminal in network. An institution need not reflect on the periodic
statement the street addresses, identification codes, or terminal numbers for transfers
initiated in a shared or interchange system
at a terminal operated by an institution
other than the account-holding institution.
The statement must, however, specify the

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12 CFR Ch. X (1–1–16 Edition)

does not include a finance charge imposed on
the account during the statement period.

location, it should identify the country and
city in which the transfer was initiated.
SECTION 1005.10

9(b)(4) Account Balances
1. Opening and closing balances. The opening
and closing balances must reflect both EFTs
and other account activity.

PREAUTHORIZED TRANSFERS

10(a) Preauthorized Transfers to Consumer’s
Account
10(a)(1) Notice by Financial Institution

9(b)(5) Address and Telephone Number for
Inquiries
1. Telephone number. A single telephone
number, preceded by the ‘‘direct inquiries
to’’ language, will satisfy the requirements
of §§ 1005.9(b)(5) and (6).
9(b)(6) Telephone Number for Preauthorized
Transfers
1. Telephone number. See comment 9(b)(5)–1.
9(c) Exceptions to the Periodic Statement
Requirements for Certain Accounts
1. Transfers between accounts. The regulation provides an exception from the periodic
statement requirement for certain intra-institutional transfers between a consumer’s
accounts. The financial institution must
still comply with the applicable periodic
statement requirements for any other EFTs
to or from the account. For example, a Regulation E statement must be provided quarterly for an account that also receives payroll deposits electronically, or for any month
in which an account is also accessed by a
withdrawal at an ATM.
9(c)(1) Preauthorized Transfers to Accounts
1. Accounts that may be accessed only by
preauthorized transfers to the account. The exception for ‘‘accounts that may be accessed
only by preauthorized transfers to the account’’ includes accounts that can be
accessed by means other than EFTs, such as
checks. If, however, an account may be
accessed
by
any
EFT
other
than
preauthorized credits to the account, such as
preauthorized debits or ATM transactions,
the account does not qualify for the exception.
2. Reversal of direct deposits. For direct-deposit-only accounts, a financial institution
must send a periodic statement at least
quarterly. A reversal of a direct deposit to
correct an error does not trigger the monthly statement requirement when the error
represented a credit to the wrong consumer’s
account, a duplicate credit, or a credit in the
wrong amount. See also comment 2(m)–5.

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9(d) Documentation for Foreign-Initiated
Transfers
1. Foreign-initiated transfers. An institution
must make a good faith effort to provide all
required information for foreign-initiated
transfers. For example, even if the institution is not able to provide a specific terminal

1. Content. No specific language is required
for
notice
regarding
receipt
of
a
preauthorized transfer. Identifying the deposit is sufficient; however, simply providing
the current account balance is not.
2. Notice of credit. A financial institution
may use different methods of notice for various types or series of preauthorized transfers, and the institution need not offer consumers a choice of notice methods.
3. Positive notice. A periodic statement sent
within two business days of the scheduled
transfer, showing the transfer, can serve as
notice of receipt.
4. Negative notice. The absence of a deposit
entry (on a periodic statement sent within
two business days of the scheduled transfer
date) will serve as negative notice.
5. Telephone notice. If a financial institution uses the telephone notice option, the institution should be able in most instances to
verify during a consumer’s initial call
whether a transfer was received. The institution must respond within two business days
to any inquiry not answered immediately.
6. Phone number for passbook accounts. The
financial institution may use any reasonable
means necessary to provide the telephone
number to consumers with passbook accounts that can only be accessed by
preauthorized credits and that do not receive
periodic statements. For example, it may
print the telephone number in the passbook,
or include the number with the annual error
resolution notice.
7. Telephone line availability. To satisfy the
readily-available standard, the financial institution must provide enough telephone
lines so that consumers get a reasonably
prompt response. The institution need only
provide telephone service during normal
business hours. Within its primary service
area, an institution must provide a local or
toll-free telephone number. It need not provide a toll-free number or accept collect
long-distance calls from outside the area
where it normally conducts business.
10(b) Written Authorization for Preauthorized
Transfers From Consumer’s Account
1. Preexisting authorizations. The financial
institution need not require a new authorization before changing from paper-based to
electronic debiting when the existing authorization does not specify that debiting is to
occur electronically or specifies that the
debiting will occur by paper means. A new
authorization also is not required when a

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Bur. of Consumer Financial Protection

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successor institution begins collecting payments.
2. Authorization obtained by third party. The
account-holding financial institution does
not violate the regulation when a thirdparty payee fails to obtain the authorization
in writing or fails to give a copy to the consumer; rather, it is the third-party payee
that is in violation of the regulation.
3. Written authorization for preauthorized
transfers.
The
requirement
that
preauthorized EFTs be authorized by the
consumer ‘‘only by a writing’’ cannot be met
by a payee’s signing a written authorization
on the consumer’s behalf with only an oral
authorization from the consumer.
4. Use of a confirmation form. A financial institution or designated payee may comply
with the requirements of this section in various ways. For example, a payee may provide
the consumer with two copies of a
preauthorization form, and ask the consumer
to sign and return one and to retain the second copy.
5. Similarly authenticated. The similarly authenticated standard permits signed, written
authorizations to be provided electronically.
The writing and signature requirements of
this section are satisfied by complying with
the Electronic Signatures in Global and National Commerce Act, 15 U.S.C. 7001 et seq.,
which defines electronic records and electronic signatures. Examples of electronic
signatures include, but are not limited to,
digital signatures and security codes. A security code need not originate with the account-holding institution. The authorization
process should evidence the consumer’s identity and assent to the authorization. The
person that obtains the authorization must
provide a copy of the terms of the authorization to the consumer either electronically or
in paper form. Only the consumer may authorize the transfer and not, for example, a
third-party merchant on behalf of the consumer.
6. Requirements of an authorization. An authorization is valid if it is readily identifiable as such and the terms of the
preauthorized transfer are clear and readily
understandable.
7. Bona fide error. Consumers sometimes
authorize third-party payees, by telephone
or online, to submit recurring charges
against a credit card account. If the consumer indicates use of a credit card account
when in fact a debit card is being used, the
payee does not violate the requirement to
obtain a written authorization if the failure
to obtain written authorization was not intentional and resulted from a bona fide
error, and if the payee maintains procedures
reasonably adapted to avoid any such error.
Procedures reasonably adapted to avoid
error will depend upon the circumstances.
Generally, requesting the consumer to specify whether the card to be used for the au-

thorization is a debit (or check) card or a
credit card is a reasonable procedure. Where
the consumer has indicated that the card is
a credit card (or that the card is not a debit
or check card), the payee may rely on the
consumer’s statement without seeking further information about the type of card. If
the payee believes, at the time of the authorization, that a credit card is involved, and
later finds that the card used is a debit card
(for example, because the consumer later
brings the matter to the payee’s attention),
the payee must obtain a written and signed
or (where appropriate) a similarly authenticated authorization as soon as reasonably
possible, or cease debiting the consumer’s
account.
10(c) Consumer’s Right to Stop Payment
1. Stop-payment order. The financial institution must honor an oral stop-payment order
made at least three business days before a
scheduled debit. If the debit item is resubmitted, the institution must continue to
honor the stop-payment order (for example,
by suspending all subsequent payments to
the payee-originator until the consumer notifies the institution that payments should
resume).
2. Revocation of authorization. Once a financial institution has been notified that the
consumer’s authorization is no longer valid,
it must block all future payments for the
particular debit transmitted by the designated payee-originator. But see comment
10(c)–3. The institution may not wait for the
payee-originator to terminate the automatic
debits. The institution may confirm that the
consumer has informed the payee-originator
of the revocation (for example, by requiring
a copy of the consumer’s revocation as written confirmation to be provided within 14
days of an oral notification). If the institution does not receive the required written
confirmation within the 14-day period, it
may honor subsequent debits to the account.
3. Alternative procedure for processing a stoppayment request. If an institution does not
have the capability to block a preauthorized
debit from being posted to the consumer’s
account—as in the case of a preauthorized
debit made through a debit card network or
other system, for example—the institution
may instead comply with the stop-payment
requirements by using a third party to block
the transfer(s), as long as the consumer’s account is not debited for the payment.
10(d) Notice of Transfers Varying in Amount
10(d)(1) Notice
1. Preexisting authorizations. A financial institution holding the consumer’s account
does not violate the regulation if the designated payee fails to provide notice of varying amounts.

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12 CFR Ch. X (1–1–16 Edition)

10(d)(2) Range

10(e)(2) Employment or Government Benefit

1. Range. A financial institution or designated payee that elects to offer the consumer a specified range of amounts for debiting (in lieu of providing the notice of transfers varying in amount) must provide an acceptable range that could be anticipated by
the consumer. For example, if the transfer is
for payment of a gas bill, an appropriate
range might be based on the highest bill in
winter and the lowest bill in summer.
2. Transfers to an account of the consumer
held at another institution. A financial institution need not provide a consumer the option of receiving notice with each varying
transfer, and may instead provide notice
only when a debit to an account of the consumer falls outside a specified range or differs by more than a specified amount from
the most recent transfer, if the funds are
transferred and credited to an account of the
consumer held at another financial institution. The specified range or amount, however, must be one that reasonably could be
anticipated by the consumer, and the institution must notify the consumer of the
range or amount at the time the consumer
provides authorization for the preauthorized
transfers. For example, if the transfer is for
payment of interest for a fixed-rate certificate of deposit account, an appropriate range
might be based on a month containing 28
days and a month containing 31 days.

1. Payroll. An employer (including a financial institution) may not require its employees to receive their salary by direct deposit
to any particular institution. An employer
may require direct deposit of salary by electronic means if employees are allowed to
choose the institution that will receive the
direct deposit. Alternatively, an employer
may give employees the choice of having
their salary deposited at a particular institution (designated by the employer) or receiving their salary by another means, such as
by check or cash.

10(e) Compulsory Use

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10(e)(1) Credit
1. Loan payments. Creditors may not require repayment of loans by electronic
means on a preauthorized, recurring basis. A
creditor may offer a program with a reduced
annual percentage rate or other cost-related
incentive for an automatic repayment feature, provided the program with the automatic payment feature is not the only loan
program offered by the creditor for the type
of credit involved. Examples include:
i. Mortgages with graduated payments in
which a pledged savings account is automatically debited during an initial period to supplement the monthly payments made by the
borrower.
ii.
Mortgage
plans
calling
for
preauthorized biweekly payments that are
debited electronically to the consumer’s account and produce a lower total finance
charge.
2. Overdraft. A financial institution may
require the automatic repayment of an overdraft credit plan even if the overdraft extension is charged to an open-end account that
may be accessed by the consumer in ways
other than by overdrafts.

SECTION 1005.11

PROCEDURES FOR RESOLVING
ERRORS

11(a) Definition of Error
1. Terminal location. With regard to deposits
at an ATM, a consumer’s request for the terminal location or other information triggers
the error resolution procedures, but the financial institution need only provide the
ATM location if it has captured that information.
2. Verifying an account debit or credit. If the
consumer contacts the financial institution
to ascertain whether a payment (for example, in a home-banking or bill-payment program) or any other type of EFT was debited
to the account, or whether a deposit made
via ATM, preauthorized transfer, or any
other type of EFT was credited to the account, without asserting an error, the error
resolution procedures do not apply.
3. Loss or theft of access device. A financial
institution is required to comply with the
error resolution procedures when a consumer
reports the loss or theft of an access device
if the consumer also alleges possible unauthorized use as a consequence of the loss or
theft.
4. Error asserted after account closed. The financial institution must comply with the
error resolution procedures when a consumer
properly asserts an error, even if the account
has been closed.
5. Request for documentation or information.
A request for documentation or other information must be treated as an error unless it
is clear that the consumer is requesting a
duplicate copy for tax or other record-keeping purposes.
6. Terminal receipts for transfers of $15 or less.
The fact that an institution does not make a
terminal receipt available for a transfer of
$15 or less in accordance with § 1005.9(e) is
not an error for purposes of § 1005.11(a)(1)(vi)
or (vii).
11(b) Notice of Error From Consumer
11(b)(1) Timing; Contents
1. Content of error notice. The notice of
error is effective even if it does not contain

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the consumer’s account number, so long as
the financial institution is able to identify
the account in question. For example, the
consumer could provide a Social Security
number or other unique means of identification.
2. Investigation pending receipt of information. While a financial institution may request a written, signed statement from the
consumer relating to a notice of error, it
may not delay initiating or completing an
investigation pending receipt of the statement.
3. Statement held for consumer. When a consumer has arranged for periodic statements
to be held until picked up, the statement for
a particular cycle is deemed to have been
transmitted on the date the financial institution first makes the statement available
to the consumer.
4. Failure to provide statement. When a financial institution fails to provide the consumer with a periodic statement, a request
for a copy is governed by this section if the
consumer gives notice within 60 days from
the date on which the statement should have
been transmitted.
5. Discovery of error by institution. The error
resolution procedures of this section apply
when a notice of error is received from the
consumer, and not when the financial institution itself discovers and corrects an error.
6. Notice at particular phone number or address. A financial institution may require the
consumer to give notice only at the telephone number or address disclosed by the institution, provided the institution maintains
reasonable procedures to refer the consumer
to the specified telephone number or address
if the consumer attempts to give notice to
the institution in a different manner.
7. Effect of late notice. An institution is not
required to comply with the requirements of
this section for any notice of error from the
consumer that is received by the institution
later than 60 days from the date on which
the periodic statement first reflecting the
error is sent. Where the consumer’s assertion
of error involves an unauthorized EFT, however, the institution must comply with
§ 1005.6 before it may impose any liability on
the consumer.

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11(b)(2) Written Confirmation
1. Written confirmation-of-error notice. If the
consumer sends a written confirmation of
error to the wrong address, the financial institution must process the confirmation
through normal procedures. But the institution need not provisionally credit the consumer’s account if the written confirmation
is delayed beyond 10 business days in getting
to the right place because it was sent to the
wrong address.

11(c) Time Limits and Extent of Investigation
1. Notice to consumer. Unless otherwise indicated in this section, the financial institution may provide the required notices to the
consumer either orally or in writing.
2. Written confirmation of oral notice. A financial institution must begin its investigation promptly upon receipt of an oral notice.
It may not delay until it has received a written confirmation.
3. Charges for error resolution. If a billing
error occurred, whether as alleged or in a different amount or manner, the financial institution may not impose a charge related to
any aspect of the error-resolution process
(including charges for documentation or investigation). Since the Act grants the consumer error-resolution rights, the institution should avoid any chilling effect on the
good-faith assertion of errors that might result if charges are assessed when no billing
error has occurred.
4. Correction without investigation. A financial institution may make, without investigation, a final correction to a consumer’s
account in the amount or manner alleged by
the consumer to be in error, but must comply with all other applicable requirements of
§ 1005.11.
5. Correction notice. A financial institution
may include the notice of correction on a
periodic statement that is mailed or delivered within the 10-business-day or 45-calendar-day time limits and that clearly identifies the correction to the consumer’s account. The institution must determine
whether such a mailing will be prompt
enough to satisfy the requirements of this
section, taking into account the specific
facts involved.
6. Correction of an error. If the financial institution determines an error occurred, within either the 10-day or 45-day period, it must
correct the error (subject to the liability
provisions of §§ 1005.6(a) and (b)) including,
where applicable, the crediting of interest
and the refunding of any fees imposed by the
institution. In a combined credit/EFT transaction, for example, the institution must refund any finance charges incurred as a result
of the error. The institution need not refund
fees that would have been imposed whether
or not the error occurred.
7. Extent of required investigation. A financial institution complies with its duty to investigate, correct, and report its determination regarding an error described in
§ 1005.11(a)(1)(vii) by transmitting the requested information, clarification, or documentation within the time limits set forth in
§ 1005.11(c). If the institution has provisionally credited the consumer’s account in accordance with § 1005.11(c)(2), it may debit the
amount upon transmitting the requested information, clarification, or documentation.

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12 CFR Ch. X (1–1–16 Edition)

Paragraph 11(c)(2)(i)
1. Compliance with all requirements. Financial institutions exempted from provisionally crediting a consumer’s account under
§§ 1005.11(c)(2)(i)(A) and (B) must still comply
with all other requirements of § 1005.11.
11(c)(3) Extension of Time Periods
1. POS debit card transactions. The extended
deadlines for investigating errors resulting
from POS debit card transactions apply to
all debit card transactions, including those
for cash only, at merchants’ POS terminals,
and also including mail and telephone orders. The deadlines do not apply to transactions at an ATM, however, even though
the ATM may be in a merchant location.

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11(c)(4) Investigation
1. Third parties. When information or documentation requested by the consumer is in
the possession of a third party with whom
the financial institution does not have an
agreement, the institution satisfies the error
resolution requirement by so advising the
consumer within the specified time period.
2. Scope of investigation. When an alleged
error involves a payment to a third party
under the financial institution’s telephone
bill-payment plan, a review of the institution’s own records is sufficient, assuming no
agreement exists between the institution
and the third party concerning the bill-payment service.
3. POS transfers. When a consumer alleges
an error involving a transfer to a merchant
via a POS terminal, the institution must
verify the information previously transmitted when executing the transfer. For example, the financial institution may request
a copy of the sales receipt to verify that the
amount of the transfer correctly corresponds
to the amount of the consumer’s purchase.
4. Agreement. An agreement that a third
party will honor an access device is an agreement for purposes of this paragraph. A financial institution does not have an agreement
for purposes of § 1005.11(c)(4)(ii) solely because it participates in transactions that
occur under the Federal recurring payments
programs, or that are cleared through an
ACH or similar arrangement for the clearing
and settlement of fund transfers generally,
or because the institution agrees to be bound
by the rules of such an arrangement.
5. No EFT agreement. When there is no
agreement between the institution and the
third party for the type of EFT involved, the
financial institution must review any relevant information within the institution’s
own records for the particular account to resolve the consumer’s claim. The extent of
the investigation required may vary depending on the facts and circumstances. However,
a financial institution may not limit its investigation solely to the payment instruc-

tions where additional information within
its own records pertaining to the particular
account in question could help to resolve a
consumer’s claim. Information that may be
reviewed as part of an investigation might
include:
i. The ACH transaction records for the
transfer;
ii. The transaction history of the particular account for a reasonable period of
time immediately preceding the allegation
of error;
iii. Whether the check number of the
transaction in question is notably out-of-sequence;
iv. The location of either the transaction
or the payee in question relative to the consumer’s place of residence and habitual
transaction area;
v. Information relative to the account in
question within the control of the institution’s third-party service providers if the financial institution reasonably believes that
it may have records or other information
that could be dispositive; or
vi. Any other information appropriate to
resolve the claim.
11(d) Procedures if Financial Institution Determines No Error or Different Error Occurred
1. Error different from that alleged. When a
financial institution determines that an
error occurred in a manner or amount different from that described by the consumer,
it must comply with the requirements of
both §§ 1005.11(c) and (d), as relevant. The institution may give the notice of correction
and the explanation separately or in a combined form.
11(d)(1) Written Explanation
1. Request for documentation. When a consumer requests copies of documents, the financial institution must provide the copies
in an understandable form. If an institution
relied on magnetic tape, it must convert the
applicable data into readable form, for example, by printing it and explaining any codes.
11(d)(2) Debiting Provisional Credit
1. Alternative procedure for debiting of credited funds. The financial institution may
comply with the requirements of this section
by notifying the consumer that the consumer’s account will be debited five business
days from the transmittal of the notification, specifying the calendar date on which
the debiting will occur.
2. Fees for overdrafts. The financial institution may not impose fees for items it is required to honor under § 1005.11. It may, however, impose any normal transaction or item
fee that is unrelated to an overdraft resulting from the debiting. If the account is still
overdrawn after five business days, the institution may impose the fees or finance

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charges to which it is entitled, if any, under
an overdraft credit plan.
11(e) Reassertion of Error
1. Withdrawal of error; right to reassert. The
financial institution has no further error resolution responsibilities if the consumer voluntarily withdraws the notice alleging an
error. A consumer who has withdrawn an allegation of error has the right to reassert the
allegation unless the financial institution
had already complied with all of the error
resolution requirements before the allegation was withdrawn. The consumer must do
so, however, within the original 60-day period.
SECTION 1005.12

RELATION TO OTHER LAWS

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12(a) Relation to Truth in Lending
1. Determining applicable regulation. i. For
transactions involving access devices that
also function as credit cards, whether Regulation E or Regulation Z (12 CFR part 1026)
applies depends on the nature of the transaction. For example, if the transaction solely involves an extension of credit, and does
not include a debit to a checking account (or
other consumer asset account), the liability
limitations and error resolution requirements of Regulation Z apply. If the transaction debits a checking account only (with
no credit extended), the provisions of Regulation E apply. If the transaction debits a
checking account but also draws on an overdraft line of credit attached to the account,
Regulation E’s liability limitations apply, in
addition to §§ 1026.13(d) and (g) of Regulation
Z (which apply because of the extension of
credit associated with the overdraft feature
on the checking account). If a consumer’s access device is also a credit card and the device is used to make unauthorized withdrawals from a checking account, but also is
used to obtain unauthorized cash advances
directly from a line of credit that is separate
from the checking account, both Regulation
E and Regulation Z apply.
ii. The following examples illustrate these
principles:
A. A consumer has a card that can be used
either as a credit card or a debit card. When
used as a debit card, the card draws on the
consumer’s checking account. When used as
a credit card, the card draws only on a separate line of credit. If the card is stolen and
used as a credit card to make purchases or to
get cash advances at an ATM from the line
of credit, the liability limits and error resolution provisions of Regulation Z apply; Regulation E does not apply.
B. In the same situation, if the card is stolen and is used as a debit card to make purchases or to get cash withdrawals at an ATM
from the checking account, the liability limits and error resolution provisions of Regulation E apply; Regulation Z does not apply.

C. In the same situation, assume the card
is stolen and used both as a debit card and as
a credit card; for example, the thief makes
some purchases using the card as a debit
card, and other purchases using the card as a
credit card. Here, the liability limits and
error resolution provisions of Regulation E
apply to the unauthorized transactions in
which the card was used as a debit card, and
the corresponding provisions of Regulation Z
apply to the unauthorized transactions in
which the card was used as a credit card.
D. Assume a somewhat different type of
card, one that draws on the consumer’s
checking account and can also draw on an
overdraft line of credit attached to the
checking account. There is no separate line
of credit, only the overdraft line, associated
with the card. In this situation, if the card is
stolen and used, the liability limits and the
error resolution provisions of Regulation E
apply. In addition, if the use of the card has
resulted in accessing the overdraft line of
credit, the error resolution provisions of
§§ 1026.13(d) and (g) of Regulation Z also
apply, but not the other error resolution provisions of Regulation Z.
2. Issuance rules. For access devices that
also constitute credit cards, the issuance
rules of Regulation E apply if the only credit
feature is a preexisting credit line attached
to the asset account to cover overdrafts (or
to maintain a specified minimum balance) or
an overdraft service, as defined in § 1005.17(a).
Regulation Z (12 CFR part 1026) rules apply if
there is another type of credit feature; for
example, one permitting direct extensions of
credit that do not involve the asset account.
3. Overdraft service. The addition of an overdraft service, as that term is defined in
§ 1005.17(a), to an accepted access device does
not constitute the addition of a credit feature subject to Regulation Z. Instead, the
provisions of Regulation E apply, including
the liability limitations (§ 1005.6) and the requirement to obtain consumer consent to the
service before any fees or charges for paying
an overdraft may be assessed on the account
(§ 1005.17).
12(b) Preemption of Inconsistent State Laws
1. Specific determinations. The regulation
prescribes standards for determining whether state laws that govern EFTs, and state
laws regarding gift certificates, store gift
cards, or general-use prepaid cards that govern dormancy, inactivity, or service fees, or
expiration dates, are preempted by the Act
and the regulation. A state law that is inconsistent may be preempted even if the Bureau
has not issued a determination. However,
nothing in § 1005.12(b) provides a financial institution with immunity for violations of
state law if the institution chooses not to
make state disclosures and the Bureau later
determines that the state law is not preempted.

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2. Preemption determination. The Bureau
recognizes state law preemption determinations made by the Board of Governors of the
Federal Reserve System prior to July 21,
2011, until and unless the Bureau makes and
publishes any contrary determination. The
Board of Governors determined that certain
provisions in the state law of Michigan are
preempted by the Federal law, effective
March 30, 1981:
i. Definition of unauthorized use. Section
5(4) is preempted to the extent that it relates
to the section of state law governing consumer liability for unauthorized use of an access device.
ii. Consumer liability for unauthorized use
of an account. Section 14 is inconsistent with
§ 1005.6 and is less protective of the consumer
than the Federal law. The state law places liability on the consumer for the unauthorized
use of an account in cases involving the consumer’s negligence. Under the Federal law, a
consumer’s liability for unauthorized use is
not related to the consumer’s negligence and
depends instead on the consumer’s promptness in reporting the loss or theft of the access device.
iii. Error resolution. Section 15 is preempted because it is inconsistent with
§ 1005.11 and is less protective of the consumer than the Federal law. The state law
allows financial institutions up to 70 days to
resolve errors, whereas the Federal law generally requires errors to be resolved within
45 days.
iv. Receipts and periodic statements. Sections 17 and 18 are preempted because they
are inconsistent with § 1005.9. The state provisions require a different disclosure of information than does the Federal law. The receipt provision is also preempted because it
allows the consumer to be charged for receiving a receipt if a machine cannot furnish one
at the time of a transfer.

cial institution and the two entities have no
agreement regarding this EFT service. If the
service provider does not issue an access device to the consumer for accessing an account held by another institution, it does
not qualify for the treatment accorded by
§ 1005.14. For example, this section does not
apply to an institution that initiates
preauthorized payroll deposits to consumer
accounts on behalf of an employer. By contrast, § 1005.14 can apply to an institution
that issues a code for initiating telephone
transfers to be carried out through the ACH
from a consumer’s account at another institution. This is the case even if the consumer
has accounts at both institutions.
2. ACH agreements. The ACH rules generally
do not constitute an agreement for purposes
of this section. However, an ACH agreement
under which members specifically agree to
honor each other’s debit cards is an ‘‘agreement,’’ and thus this section does not apply.

SECTION 1005.13 ADMINISTRATIVE
ENFORCEMENT; RECORD RETENTION

1. Error resolution. When a consumer notifies the service provider of an error, the EFT
service provider must investigate and resolve the error in compliance with § 1005.11 as
modified by § 1005.14(b)(2). If an error occurred, any fees or charges imposed as a result of the error, either by the service provider or by the account-holding institution
(for example, overdraft or dishonor fees)
must be reimbursed to the consumer by the
service provider.

13(b) Record Retention
1. Requirements. A financial institution
need not retain records that it has given disclosures and documentation to each consumer; it need only retain evidence demonstrating that its procedures reasonably ensure the consumers’ receipt of required disclosures and documentation.

14(b) Compliance by Electronic Fund Transfer
Service Provider
1. Liability. The service provider is liable
for unauthorized EFTs that exceed limits on
the consumer’s liability under § 1005.6.
14(b)(1) Disclosures and Documentation
1. Periodic statements from electronic fund
transfer service provider. A service provider
that meets the conditions set forth in this
paragraph does not have to issue periodic
statements. A service provider that does not
meet the conditions need only include on
periodic statements information about
transfers initiated with the access device it
has issued.
14(b)(2) Error Resolution

SECTION 1005.14 ELECTRONIC FUND TRANSFER
SERVICE PROVIDER NOT HOLDING CONSUMER’S ACCOUNT

14(c)(1) Documentation

14(a) Electronic Fund Transfer Service
Providers Subject to Regulation
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14(c) Compliance by Account-Holding
Institution

1. Applicability. This section applies only
when a service provider issues an access device to a consumer for initiating transfers to
or from the consumer’s account at a finan-

1. Periodic statements from account-holding
institution. The periodic statement provided
by the account-holding institution need only
contain
the
information
required
by
§ 1005.9(b)(1).

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SECTION 1005.17 REQUIREMENTS FOR
OVERDRAFT SERVICES
17(a) Definition
1. Exempt securities- and commodities-related
lines of credit. The definition of ‘‘overdraft
service’’ does not include the payment of
transactions in a securities or commodities
account pursuant to which credit is extended
by a broker-dealer registered with the Securities and Exchange Commission or the Commodity Futures Trading Commission.

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17(b) Opt-In Requirement
1. Scope. i. Account-holding institutions. Section 1005.17(b) applies to ATM and one-time
debit card transactions made with a debit
card issued by or on behalf of the accountholding institution. Section 1005.17(b) does
not apply to ATM and one-time debit card
transactions made with a debit card issued
by or through a third party unless the debit
card is issued on behalf of the account-holding institution.
ii. Coding of transactions. A financial institution complies with the rule if it adapts its
systems to identify debit card transactions
as either one-time or recurring. If it does so,
the financial institution may rely on the
transaction’s coding by merchants, other institutions, and other third parties as a onetime or a preauthorized or recurring debit
card transaction.
iii. One-time debit card transactions. The
opt-in applies to any one-time debit card
transaction, whether the card is used, for example, at a point-of-sale, in an online transaction, or in a telephone transaction.
iv. Application of fee prohibition. The prohibition on assessing overdraft fees under
§ 1005.17(b)(1) applies to all institutions. For
example, the prohibition applies to an institution that has a policy and practice of declining to authorize and pay any ATM or
one-time debit card transactions when the
institution has a reasonable belief at the
time of the authorization request that the
consumer does not have sufficient funds
available to cover the transaction. However,
the institution is not required to comply
with §§ 1005.17(b)(1)(i)–(iv), including the notice and opt-in requirements, if it does not
assess overdraft fees for paying ATM or onetime debit card transactions that overdraw
the consumer’s account. Assume an institution does not provide an opt-in notice, but
authorizes an ATM or one-time debit card
transaction on the reasonable belief that the
consumer has sufficient funds in the account
to cover the transaction. If, at settlement,
the consumer has insufficient funds in the
account (for example, due to intervening
transactions that post to the consumer’s account), the institution is not permitted to
assess an overdraft fee or charge for paying
that transaction.

2. No affirmative consent. A financial institution may pay overdrafts for ATM and onetime debit card transactions even if a consumer has not affirmatively consented or
opted in to the institution’s overdraft service. If the institution pays such an overdraft
without the consumer’s affirmative consent,
however, it may not impose a fee or charge
for doing so. These provisions do not limit
the institution’s ability to debit the consumer’s account for the amount overdrawn if
the institution is permitted to do so under
applicable law.
3. Overdraft transactions not required to be
authorized or paid. Section 1005.17 does not
require a financial institution to authorize
or pay an overdraft on an ATM or one-time
debit card transaction even if the consumer
has affirmatively consented to an institution’s overdraft service for such transactions.
4. Reasonable opportunity to provide affirmative consent. A financial institution provides
a consumer with a reasonable opportunity to
provide affirmative consent when, among
other things, it provides reasonable methods
by which the consumer may affirmatively
consent. A financial institution provides
such reasonable methods, if:
i. By mail. The institution provides a form
for the consumer to fill out and mail to affirmatively consent to the service.
ii. By telephone. The institution provides a
readily-available telephone line that consumers may call to provide affirmative consent.
iii. By electronic means. The institution provides an electronic means for the consumer
to affirmatively consent. For example, the
institution could provide a form that can be
accessed and processed at its Web site, where
the consumer may click on a check box to
provide consent and confirm that choice by
clicking on a button that affirms the consumer’s consent.
iv. In person. The institution provides a
form for the consumer to complete and
present at a branch or office to affirmatively
consent to the service.
5. Implementing opt-in at account-opening. A
financial institution may provide notice regarding the institution’s overdraft service
prior to or at account-opening. A financial
institution may require a consumer, as a
necessary step to opening an account, to
choose whether or not to opt into the payment of ATM or one-time debit card transactions pursuant to the institution’s overdraft service. For example, the institution
could require the consumer, at account opening, to sign a signature line or check a box
on a form (consistent with comment 17(b)–6)
indicating whether or not the consumer affirmatively consents at account opening. If
the consumer does not check any box or provide a signature, the institution must assume that the consumer does not opt in. Or,

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the institution could require the consumer
to choose between an account that does not
permit the payment of ATM or one-time
debit card transactions pursuant to the institution’s overdraft service and an account
that permits the payment of such overdrafts,
provided that the accounts comply with
§ 1005.17(b)(2) and § 1005.17(b)(3).
6. Affirmative consent required. A consumer’s
affirmative consent, or opt-in, to a financial
institution’s overdraft service must be obtained separately from other consents or acknowledgements obtained by the institution,
including a consent to receive disclosures
electronically. An institution may obtain a
consumer’s affirmative consent by providing
a blank signature line or check box that the
consumer could sign or select to affirmatively consent, provided that the signature
line or check box is used solely for purposes
of evidencing the consumer’s choice whether
or not to opt into the overdraft service and
not for other purposes. An institution does
not obtain a consumer’s affirmative consent
by including preprinted language about the
overdraft service in an account disclosure
provided with a signature card or contract
that the consumer must sign to open the account and that acknowledges the consumer’s
acceptance of the account terms. Nor does an
institution obtain a consumer’s affirmative
consent by providing a signature card that
contains a pre-selected check box indicating
that the consumer is requesting the service.
7. Confirmation. A financial institution may
comply
with
the
requirement
in
§ 1005.17(b)(1)(iv) to provide confirmation of
the consumer’s affirmative consent by mailing or delivering to the consumer a copy of
the consumer’s completed opt-in notice, or
by mailing or delivering a letter or notice to
the consumer acknowledging that the consumer has elected to opt into the institution’s service. The confirmation, which must
be provided in writing, or electronically if
the consumer agrees, must include a statement informing the consumer of the right to
revoke the opt-in at any time. See
§ 1005.17(d)(6), which permits institutions to
include the revocation statement on the initial opt-in notice. An institution complies
with the confirmation requirement if it has
adopted reasonable procedures designed to
ensure that overdraft fees are assessed only
in connection with transactions paid after
the confirmation has been mailed or delivered to the consumer.
8. Outstanding Negative Balance. If a fee or
charge is based on the amount of the outstanding negative balance, an institution is
prohibited from assessing any such fee if the
negative balance is solely attributable to an
ATM or one-time debit card transaction, unless the consumer has opted into the institution’s overdraft service for ATM or one-time
debit card transactions. However, the rule
does not prohibit an institution from assess-

ing such a fee if the negative balance is attributable in whole or in part to a check,
ACH, or other type of transaction not subject to the prohibition on assessing overdraft
fees in § 1005.17(b)(1).
9. Daily or Sustained Overdraft, Negative Balance, or Similar Fee or Charge i. Daily or sustained overdraft, negative balance, or similar
fees or charges. If a consumer has not opted
into the institution’s overdraft service for
ATM or one-time debit card transactions,
the fee prohibition in § 1005.17(b)(1) applies to
all overdraft fees or charges for paying those
transactions, including but not limited to
daily or sustained overdraft, negative balance, or similar fees or charges. Thus, where
a consumer’s negative balance is solely attributable to an ATM or one-time debit card
transaction, the rule prohibits the assessment of such fees unless the consumer has
opted in. However, the rule does not prohibit
an institution from assessing daily or sustained overdraft, negative balance, or similar fees or charges if a negative balance is attributable in whole or in part to a check,
ACH, or other type of transaction not subject to the fee prohibition. When the negative balance is attributable in part to an
ATM or one-time debit card transaction, and
in part to a check, ACH, or other type of
transaction not subject to the fee prohibition, the date on which such a fee may be assessed is based on the date on which the
check, ACH, or other type of transaction is
paid into overdraft.
ii. Examples. The following examples illustrate how an institution complies with the
fee prohibition. For each example, assume
the following: (a) The consumer has not
opted into the payment of ATM or one-time
debit card overdrafts; (b) these transactions
are paid into overdraft because the amount
of the transaction at settlement exceeded
the amount authorized or the amount was
not submitted for authorization; (c) under
the account agreement, the institution may
charge a per-item fee of $20 for each overdraft, and a one-time sustained overdraft fee
of $20 on the fifth consecutive day the consumer’s account remains overdrawn; (d) the
institution posts ATM and debit card transactions before other transactions; and (e) the
institution allocates deposits to account
debits in the same order in which it posts
debits.
A. Assume that a consumer has a $50 account balance on March 1. That day, the institution posts a one-time debit card transaction of $60 and a check transaction of $40.
The institution charges an overdraft fee of
$20 for the check overdraft but cannot assess
an overdraft fee for the debit card transaction. At the end of the day, the consumer
has an account balance of negative $70. The
consumer does not make any deposits to the

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account, and no other transactions occur between March 2 and March 6. Because the consumer’s negative balance is attributable in
part to the $40 check (and associated overdraft fee), the institution may charge a sustained overdraft fee on March 6 in connection with the check.
B. Same facts as in A., except that on
March 3, the consumer deposits $40 in the account. The institution allocates the $40 to
the debit card transaction first, consistent
with its posting order policy. At the end of
the day on March 3, the consumer has an account balance of negative $30, which is attributable to the check transaction (and associated overdraft fee). The consumer does
not make any further deposits to the account, and no other transactions occur between March 4 and March 6. Because the remaining negative balance is attributable to
the March 1 check transaction, the institution may charge a sustained overdraft fee on
March 6 in connection with the check.
C. Assume that a consumer has a $50 account balance on March 1. That day, the institution posts a one-time debit card transaction of $60. At the end of that day, the consumer has an account balance of negative
$10. The institution may not assess an overdraft fee for the debit card transaction. On
March 3, the institution pays a check transaction of $100 and charges an overdraft fee of
$20. At the end of that day, the consumer has
an account balance of negative $130. The consumer does not make any deposits to the account, and no other transactions occur between March 4 and March 8. Because the consumer’s negative balance is attributable in
part to the check, the institution may assess
a $20 sustained overdraft fee. However, because the check was paid on March 3, the institution must use March 3 as the start date
for determining the date on which the sustained overdraft fee may be assessed. Thus,
the institution may charge a $20 sustained
overdraft fee on March 8.
iii. Alternative approach. For a consumer
who does not opt into the institution’s overdraft service for ATM and one-time debit
card transactions, an institution may also
comply with the fee prohibition in
§ 1005.17(b)(1) by not assessing daily or sustained overdraft, negative balance, or similar fees or charges unless a consumer’s negative balance is attributable solely to check,
ACH or other types of transactions not subject to the fee prohibition while that negative balance remains outstanding. In such
case, the institution would not have to determine how to allocate subsequent deposits
that reduce but do not eliminate the negative balance. For example, if a consumer has
a negative balance of $30, of which $10 is attributable to a one-time debit card transaction, an institution complies with the fee
prohibition if it does not assess a sustained

overdraft fee while that negative balance remains outstanding.
17(b)(2) Conditioning Payment of Other
Overdrafts on Consumer’s Affirmative Consent
1. Application of the same criteria. The prohibitions on conditioning in § 1005.17(b)(2) generally require an institution to apply the
same criteria for deciding when to pay overdrafts for checks, ACH transactions, and
other types of transactions, whether or not
the consumer has affirmatively consented to
the institution’s overdraft service with respect to ATM and one-time debit card overdrafts. For example, if an institution’s internal criteria would lead the institution to pay
a check overdraft if the consumer had affirmatively consented to the institution’s
overdraft service for ATM and one-time
debit card transactions, it must also apply
the same criteria in a consistent manner in
determining whether to pay the check overdraft if the consumer has not opted in.
2. No requirement to pay overdrafts on checks,
ACH transactions, or other types of transactions. The prohibition on conditioning in
§ 1005.17(b)(2) does not require an institution
to pay overdrafts on checks, ACH transactions, or other types of transactions in all
circumstances. Rather, the rule simply prohibits institutions from considering the consumer’s decision not to opt in when deciding
whether to pay overdrafts for checks, ACH
transactions, or other types of transactions.2≤17(b)(3) Same Account Terms, Conditions, and Features
1. Variations in terms, conditions, or features.
A financial institution may not vary the
terms, conditions, or features of an account
provided to a consumer who does not affirmatively consent to the payment of ATM or
one-time debit card transactions pursuant to
the institution’s overdraft service. This includes, but is not limited to:
i. Interest rates paid and fees assessed;
ii. The type of ATM or debit card provided
to the consumer. For instance, an institution may not provide consumers who do not
opt in a PIN-only card while providing a
debit card with both PIN and signature-debit
functionality to consumers who opt in;
iii. Minimum balance requirements; or
iv. Account features such as online bill
payment services.
2. Limited-feature bank accounts. Section
1005.17(b)(3) does not prohibit institutions
from offering deposit account products with
limited features, provided that a consumer is
not required to open such an account because the consumer did not opt in. For example, § 1005.17(b)(3) does not prohibit an institution from offering a checking account designed to comply with state basic banking
laws, or designed for consumers who are not
eligible for a checking account because of
their credit or checking account history,

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which may include features limiting the payment of overdrafts. However, a consumer
who applies, and is otherwise eligible, for a
full-service or other particular deposit account product may not be provided instead
with the account with more limited features
because the consumer has declined to opt in.
17(c) Timing
1. Permitted fees or charges. Fees or charges
for ATM and one-time debit card overdrafts
may be assessed only for overdrafts paid on
or after the date the financial institution receives the consumer’s affirmative consent to
the institution’s overdraft service. See also
comment 17(b)–7.

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17(d) Content and Format
1. Overdraft service. The description of the
institution’s overdraft service should indicate that the consumer has the right to affirmatively consent, or opt into payment of
overdrafts for ATM and one-time debit card
transactions. The description should also
disclose the institution’s policies regarding
the payment of overdrafts for other transactions, including checks, ACH transactions,
and automatic bill payments, provided that
this content is not more prominent than the
description of the consumer’s right to opt
into payment of overdrafts for ATM and onetime debit card transactions. As applicable,
the institution also should indicate that it
pays overdrafts at its discretion, and should
briefly explain that if the institution does
not authorize and pay an overdraft, it may
decline the transaction.
2. Maximum fee. If the amount of a fee may
vary from transaction to transaction, the financial institution may indicate that the
consumer may be assessed a fee ‘‘up to’’ the
maximum fee. The financial institution
must disclose all applicable overdraft fees,
including but not limited to:
i. Per item or per transaction fees;
ii. Daily overdraft fees;
iii. Sustained overdraft fees, where fees are
assessed when the consumer has not repaid
the amount of the overdraft after some period of time (for example, if an account remains overdrawn for five or more business
days); or
iv. Negative balance fees.
3. Opt-in methods. The opt-in notice must
include the methods by which the consumer
may consent to the overdraft service for
ATM and one-time debit card transactions.
Institutions may tailor Model Form A–9 to
the methods offered to consumers for affirmatively consenting to the service. For example, an institution need not provide the tearoff portion of Model Form A–9 if it is only
permitting consumers to opt-in telephonically or electronically. Institutions
may, but are not required, to provide a sig-

nature line or check box where the consumer
can indicate that he or she declines to opt in.
4. Identification of consumer’s account. An
institution may use any reasonable method
to identify the account for which the consumer submits the opt-in notice. For example, the institution may include a line for a
printed name and an account number, as
shown in Model Form A–9. Or, the institution may print a bar code or use other tracking information. See also comment 17(b)–6,
which describes how an institution obtains a
consumer’s affirmative consent.
5. Alternative plans for covering overdrafts. If
the institution offers both a line of credit
subject to Regulation Z (12 CFR part 1026)
and a service that transfers funds from another account of the consumer held at the
institution to cover overdrafts, the institution must state in its opt-in notice that both
alternative plans are offered. For example,
the notice might state ‘‘We also offer overdraft protection plans, such as a link to a savings account or to an overdraft line of credit,
which may be less expensive than our standard overdraft practices.’’ If the institution
offers one, but not the other, it must state in
its opt-in notice the alternative plan that it
offers. If the institution does not offer either
plan, it should omit the reference to the alternative plans.
17(f) Continuing Right To Opt-In or To Revoke
the Opt-In
1. Fees or charges for overdrafts incurred
prior to revocation. Section 1005.17(f)(1) provides that a consumer may revoke his or her
prior consent at any time. If a consumer
does so, this provision does not require the
financial institution to waive or reverse any
overdraft fees assessed on the consumer’s account prior to the institution’s implementation of the consumer’s revocation request.
17(g) Duration of Opt-In
1. Termination of overdraft service. A financial institution may, for example, terminate
the overdraft service when the consumer
makes excessive use of the service.
SECTION 1005.18 REQUIREMENTS FOR FINANCIAL INSTITUTIONS OFFERING PAYROLL CARD
ACCOUNTS
18(a) Coverage
1. Issuance of access device. Consistent with
§ 1005.5(a), a financial institution may issue
an access device only in response to an oral
or written request for the device, or as a renewal or substitute for an accepted access
device. A consumer is deemed to request an
access device for a payroll card account
when the consumer chooses to receive salary
or other compensation through a payroll
card account.

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2. Application to employers and service providers. Typically, employers and third-party
service providers do not meet the definition
of a ‘‘financial institution’’ subject to the
regulation because they neither hold payroll
card accounts nor issue payroll cards and
agree with consumers to provide EFT services in connection with payroll card accounts. However, to the extent an employer
or a service provider undertakes either of
these functions, it would be deemed a financial institution under the regulation.
18(b) Alternative to Periodic Statements

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1. Posted transactions. A history of transactions provided under §§ 1005.18(b)(1)(ii) and
(iii) shall reflect transfers once they have
been posted to the account. Thus, an institution does not need to include transactions
that have been authorized, but that have not
yet posted to the account.
2. Electronic history. The electronic history
required under § 1005.18(b)(1)(ii) must be provided in a form that the consumer may keep,
as required under § 1005.4(a)(1). Financial institutions may satisfy this requirement if
they make the electronic history available
in a format that is capable of being retained.
For example, an institution satisfies the requirement if it provides a history at a Web
site in a format that is capable of being
printed or stored electronically using a web
browser.

tronically when the consumer enters a user
identification code or password or otherwise
complies with a security procedure used by
an institution to verify the consumer’s identity. An institution is not required to determine whether a consumer has in fact
accessed information about specific transactions to trigger the beginning of the 60-day
periods for liability limits and error resolution under §§ 1005.6 and 1005.11.
3. Untimely notice of error. An institution
that provides a transaction history under
§ 1005.18(b)(1) is not required to comply with
the requirements of § 1005.11 for any notice of
error from the consumer pertaining to a
transfer that occurred more than 60 days
prior to the earlier of the date the consumer
electronically accesses the account or the
date the financial institution sends a written
history upon the consumer’s request. (Alternatively, as provided in § 1005.18(c)(4)(ii), an
institution need not comply with the requirements of § 1005.11 with respect to any
notice of error received from the consumer
more than 120 days after the date of posting
of the transfer allegedly in error.) Where the
consumer’s assertion of error involves an unauthorized EFT, however, the institution
must comply with § 1005.6 before it may impose any liability on the consumer.
SECTION 1005.20 REQUIREMENTS FOR GIFT
CARDS AND GIFT CERTIFICATES

18(c) Modified Requirements

20(a) Definitions

1. Error resolution safe harbor provision. Institutions that choose to investigate notices
of error provided up to 120 days from the
date a transaction has posted to a consumer’s account may still disclose the error
resolution time period required by the regulation (as set forth in the Model Form in appendix A–7). Specifically, an institution may
disclose to payroll card account holders that
the institution will investigate any notice of
error provided within 60 days of the consumer electronically accessing an account or
receiving a written history upon request
that reflects the error, even if, for some or
all transactions, the institution investigates
any notice of error provided up to 120 days
from the date that the transaction alleged to
be in error has posted to the consumer’s account. Similarly, an institution’s summary
of the consumer’s liability (as required under
§ 1005.7(b)(1)) may disclose that liability is
based on the consumer providing notice of
error within 60 days of the consumer electronically accessing an account or receiving
a written history reflecting the error, even
if, for some or all transactions, the institution allows a consumer to assert a notice of
error up to 120 days from the date of posting
of the alleged error.
2. Electronic access. A consumer is deemed
to have accessed a payroll card account elec-

1. Form of card, code, or device. Section
1005.20 applies to any card, code, or other device that meets one of the definitions in
§§ 1005.20(a)(1) through (a)(3) (and is not otherwise excluded by § 1005.20(b)), even if it is
not issued in card form. Section 1005.20 applies, for example, to an account number or
bar code that can be used to access underlying funds. Similarly, § 1005.20 applies to a
device with a chip or other embedded mechanism that links the device to stored funds,
such as a mobile phone or sticker containing
a contactless chip that enables the consumer
to access the stored funds. A card, code, or
other device that meets the definition in
§§ 1005.20(a)(1) through (a)(3) includes an electronic promise (see comment 20(a)–2) as well
as a promise that is not electronic. See, however, § 1005.20(b)(5). In addition, § 1005.20 applies if a merchant issues a code that entitles a consumer to redeem the code for goods
or services, regardless of the medium in
which the code is issued (see, however,
§ 1005.20(b)(5)), and whether or not it may be
redeemed electronically or in the merchant’s
store. Thus, for example, if a merchant
emails a code that a consumer may redeem
in a specified amount either online or in the
merchant’s store, that code is covered under
§ 1005.20, unless one of the exclusions in
§ 1005.20(b) apply.

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2. Electronic promise. The term ‘‘electronic
promise’’ as used in EFTA sections
915(a)(2)(B), (a)(2)(C), and (a)(2)(D) means a
person’s commitment or obligation communicated or stored in electronic form made to
a consumer to provide payment for goods or
services for transactions initiated by the
consumer. The electronic promise is itself
represented by a card, code or other device
that is issued or honored by the person, reflecting the person’s commitment or obligation to pay. For example, if a merchant
issues a code that can be given as a gift and
that entitles the recipient to redeem the
code in an online transaction for goods or
services, that code represents an electronic
promise by the merchant and is a card, code,
or other device covered by § 1005.20.
3. Cards, codes, or other devices redeemable
for specific goods or services. Certain cards,
codes, or other devices may be redeemable
upon presentation for a specific good or service, or ‘‘experience,’’ such as a spa treatment, hotel stay, or airline flight. In other
cases, a card, code, or other device may entitle the consumer to a certain percentage off
the purchase of a good or service, such as
20% off of any purchase in a store. Such
cards, codes, or other devices generally are
not subject to the requirements of this section because they are not issued to a consumer ‘‘in a specified amount’’ as required
under the definitions of ‘‘gift certificate,’’
‘‘store gift card,’’ or ‘‘general-use prepaid
card.’’ However, if the card, code, or other
device is issued in a specified or denominated
amount that can be applied toward the purchase of a specific good or service, such as a
certificate or card redeemable for a spa
treatment up to $50, the card, code, or other
device is subject to this section, unless one
of the exceptions in § 1005.20(b) apply. See,
e.g., § 1005.20(b)(3). Similarly, if the card,
code, or other device states a specific monetary value, such as ‘‘a $50 value,’’ the card,
code, or other device is subject to this section, unless an exclusion in § 1005.20(b) applies.
4. Issued primarily for personal, family, or
household purposes. Section 1005.20 only applies to cards, codes, or other devices that
are sold or issued to a consumer primarily
for personal, family, or household purposes.
A card, code, or other device initially purchased by a business is subject to this section if the card, code, or other device is purchased for redistribution or resale to consumers primarily for personal, family, or
household purposes. Moreover, the fact that
a card, code, or other device may be primarily funded by a business, for example, in
the case of certain rewards or incentive
cards, does not mean the card, code, or other
device is outside the scope of § 1005.20, if the
card, code, or other device will be provided
to a consumer primarily for personal, family,
or household purposes. But see § 1005.20(b)(3).

Whether a card, code, or other device is
issued to a consumer primarily for personal,
family, or household purposes will depend on
the facts and circumstances. For example, if
a program manager purchases store gift
cards directly from an issuing merchant and
sells those cards through the program manager’s retail outlets, such gift cards are subject to the requirements of § 1005.20 because
the store gift cards are sold to consumers
primarily for personal, family, or household
purposes. In contrast, a card, code, or other
device generally would not be issued to consumers primarily for personal, family, or
household purposes, and therefore would fall
outside the scope of § 1005.20, if the purchaser
of the card, code, or device is contractually
prohibited from reselling or redistributing
the card, code, or device to consumers primarily for personal, family, or household
purposes, and reasonable policies and procedures are maintained to avoid such sale or
distribution for such purposes. However, if
an entity that has purchased cards, codes, or
other devices for business purposes sells or
distributes such cards, codes, or other devices to consumers primarily for personal,
family, or household purposes, that entity
does not comply with § 1005.20 if it has not
otherwise met the substantive and disclosure
requirements of the rule or unless an exclusion in § 1005.20(b) applies.
5. Examples of cards, codes, or other devices
issued for business purposes. Examples of
cards, codes, or other devices that are issued
and used for business purposes and therefore
excluded from the definitions of ‘‘gift certificate,’’ ‘‘store gift card,’’ or ‘‘general-use prepaid card’’ include:
i. Cards, codes, or other devices to reimburse employees for travel or moving expenses.
ii. Cards, codes, or other devices for employees to use to purchase office supplies and
other business-related items.
20(a)(2) Store Gift Card
1. Relationship between ‘‘gift certificate’’ and
‘‘store gift card.’’ The term ‘‘store gift card’’
in § 1005.20(a)(2) includes ‘‘gift certificate’’ as
defined in § 1005.20(a)(1). For example, a numeric or alphanumeric code representing a
specified dollar amount or value that is electronically sent to a consumer as a gift which
can be redeemed or exchanged by the recipient to obtain goods or services may be both
a ‘‘gift certificate’’ and a ‘‘store gift card’’ if
the specified amount or value cannot be increased.
2. Affiliated group of merchants. The term
‘‘affiliated group of merchants’’ means two
or more affiliated merchants or other persons that are related by common ownership
or common corporate control (see, e.g., 12
CFR 227.3(b) and 12 CFR 223.2) and that share
the same name, mark, or logo. For example,

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the term includes franchisees that are subject to a common set of corporate policies or
practices under the terms of their franchise
licenses. The term also applies to two or
more merchants or other persons that agree
among themselves, by contract or otherwise,
to redeem cards, codes, or other devices bearing the same name, mark, or logo (other
than the mark, logo, or brand of a payment
network), for the purchase of goods or services solely at such merchants or persons. For
example, assume a movie theatre chain and
a restaurant chain jointly agree to issue
cards that share the same ‘‘Flix and Food’’
logo that can be redeemed solely towards the
purchase of movie tickets or concessions at
any of the participating movie theatres, or
towards the purchase of food or beverages at
any of the participating restaurants. For
purposes of § 1005.20, the movie theatre chain
and the restaurant chain would be considered to be an affiliated group of merchants,
and the cards are considered to be ‘‘store gift
cards.’’ However, merchants or other persons
are not considered to be affiliated merely because they agree to accept a card that bears
the mark, logo, or brand of a payment network.
3. Mall gift cards. See comment 20(a)(3)–2.
20(a)(3) General-Use Prepaid Card
1. Redeemable upon presentation at multiple,
unaffiliated merchants. A card, code, or other
device is redeemable upon presentation at
multiple, unaffiliated merchants if, for example, such merchants agree to honor the
card, code, or device if it bears the mark,
logo, or brand of a payment network, pursuant to the rules of the payment network.
2. Mall gift cards. Mall gift cards that are
intended to be used or redeemed for goods or
services at participating retailers within a
shopping mall may be considered store gift
cards or general-use prepaid cards depending
on the merchants with which the cards may
be redeemed. For example, if a mall card
may only be redeemed at merchants within
the mall itself, the card is more likely to be
redeemable at an affiliated group of merchants and considered a store gift card. However, certain mall cards also carry the brand
of a payment network and can be used at any
retailer that accepts that card brand, including retailers located outside of the mall.
Such cards are considered general-use prepaid cards.

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20(a)(4) Loyalty, Award, or Promotional Gift
Card
1. Examples of loyalty, award, or promotional
programs. Examples of loyalty, award, or promotional programs under § 1005.20(a)(4) include, but are not limited to:
i. Consumer retention programs operated
or administered by a merchant or other person that provide to consumers cards or cou-

pons redeemable for or towards goods or
services or other monetary value as a reward
for purchases made or for visits to the participating merchant.
ii. Sales promotions operated or administered by a merchant or product manufacturer that provide coupons or discounts redeemable for or towards goods or services or
other monetary value.
iii. Rebate programs operated or administered by a merchant or product manufacturer that provide cards redeemable for or
towards goods or services or other monetary
value to consumers in connection with the
consumer’s purchase of a product or service
and the consumer’s completion of the rebate
submission process.
iv. Sweepstakes or contests that distribute
cards redeemable for or towards goods or
services or other monetary value to consumers as an invitation to enter into the
promotion for a chance to win a prize.
v. Referral programs that provide cards redeemable for or towards goods or services or
other monetary value to consumers in exchange for referring other potential consumers to a merchant.
vi. Incentive programs through which an
employer provides cards redeemable for or
towards goods or services or other monetary
value to employees, for example, to recognize job performance, such as increased
sales, or to encourage employee wellness and
safety.
vii. Charitable or community relations
programs through which a company provides
cards redeemable for or towards goods or
services or other monetary value to a charity or community group for their fundraising
purposes, for example, as a reward for a donation or as a prize in a charitable event.
2. Issued for loyalty, award, or promotional
purposes. To indicate that a card, code, or
other device is issued for loyalty, award, or
promotional
purposes
as
required
by
§ 1005.20(a)(4)(iii), it is sufficient for the card,
code, or other device to state on the front,
for example, ‘‘Reward’’ or ‘‘Promotional.’’
3. Reference to toll-free number and Web site.
If a card, code, or other device issued in connection with a loyalty, award, or promotional program does not have any fees,
the disclosure under § 1005.20(a)(4)(iii)(D) is
not required on the card, code, or other device.
20(a)(6) Service Fee
1. Service fees. Under § 1005.20(a)(6), a service
fee includes a periodic fee for holding or use
of a gift certificate, store gift card, or general-use prepaid card. A periodic fee includes
any fee that may be imposed on a gift certificate, store gift card, or general-use prepaid
card from time to time for holding or using
the certificate or card, such as a monthly
maintenance fee, a transaction fee, an ATM

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fee, a reload fee, a foreign currency transaction fee, or a balance inquiry fee, whether
or not the fee is waived for a certain period
of time or is only imposed after a certain period of time. A service fee does not include a
one-time fee or a fee that is unlikely to be
imposed more than once while the underlying funds are still valid, such as an initial
issuance fee, a cash-out fee, a supplemental
card fee, or a lost or stolen certificate or
card replacement fee.
20(a)(7) Activity
1. Activity. Under § 1005.20(a)(7), any action
that results in an increase or decrease of the
funds underlying a gift certificate, store gift
card, or general-use prepaid card, other than
the imposition of a fee, or an adjustment due
to an error or a reversal of a prior transaction, constitutes activity for purposes of
§ 1005.20. For example, the purchase and activation of a certificate or card, the use of the
certificate or card to purchase a good or
service, or the reloading of funds onto a
store gift card or general-use prepaid card
constitutes activity. However, the imposition of a fee, the replacement of an expired,
lost, or stolen certificate or card, and a balance inquiry do not constitute activity. In
addition, if a consumer attempts to engage
in a transaction with a gift certificate, store
gift card, or general-use prepaid card, but
the transaction cannot be completed due to
technical or other reasons, such attempt
does not constitute activity. Furthermore, if
the funds underlying a gift certificate, store
gift card, or general-use prepaid card are adjusted because there was an error or the consumer has returned a previously purchased
good, the adjustment also does not constitute activity with respect to the certificate or card.

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20(b) Exclusions
1. Application of exclusion. A card, code, or
other device is excluded from the definition
of ‘‘gift certificate,’’ ‘‘store gift card,’’ or
‘‘general-use prepaid card’’ if it meets any of
the exclusions in § 1005.20(b). An excluded
card, code, or other device generally is not
subject to any of the requirements of this
section. See, however, § 1005.20(a)(4)(iii), requiring certain disclosures for loyalty,
award, or promotional gift cards.
2. Eligibility for multiple exclusions. A card,
code, or other device may qualify for one or
more exclusions. For example, a corporation
may give its employees a gift card that is
marketed solely to businesses for incentiverelated purposes, such as to reward job performance or promote employee safety. In
this case, the card may qualify for the exclusion for loyalty, award, or promotional gift
cards under § 1005.20(b)(3), or for the exclusion for cards, codes, or other devices not
marketed to the general public under

§ 1005.20(b)(4). In addition, as long as any one
of the exclusions applies, a card, code, or
other device is not covered by § 1005.20, even
if other exclusions do not apply. In the above
example, the corporation may give its employees a type of gift card that can also be
purchased by a consumer directly from a
merchant. Under these circumstances, while
the card does not qualify for the exclusion
for cards, codes, or other devices not marketed
to
the
general
public
under
§ 1005.20(b)(4) because the card can also be obtained through retail channels, it is nevertheless exempt from the substantive requirements of § 1005.20 because it is a loyalty,
award, or promotional gift card. See, however, § 1005.20(a)(4)(iii), requiring certain disclosures for loyalty, award, or promotional
gift cards. Similarly, a person may market a
reloadable card to teenagers for occasional
expenses that enables parents to monitor
spending. Although the card does not qualify
for the exclusion for cards, codes, or other
devices not marketed to the general public
under § 1005.20(b)(4), it may nevertheless be
exempt from the requirements of § 1005.20
under § 1005.20(b)(2) if it is reloadable and not
marketed or labeled as a gift card or gift certificate.
Paragraph 20(b)(1)
1. Examples of excluded products. The exclusion for products usable solely for telephone
services applies to prepaid cards for long-distance telephone service, prepaid cards for
wireless telephone service and prepaid cards
for other services that function similar to
telephone services, such as prepaid cards for
voice over Internet protocol (VoIP) access
time.
Paragraph 20(b)(2)
1. Reloadable. A card, code, or other device
is ‘‘reloadable’’ if the terms and conditions
of the agreement permit funds to be added to
the card, code, or other device after the initial purchase or issuance. A card, code, or
other device is not ‘‘reloadable’’ merely because the issuer or processor is technically
able to add functionality that would otherwise enable the card, code, or other device to
be reloaded.
2. Marketed or labeled as a gift card or gift
certificate. The term ‘‘marketed or labeled as
a gift card or gift certificate’’ means directly
or indirectly offering, advertising, or otherwise suggesting the potential use of a card,
code or other device, as a gift for another
person. Whether the exclusion applies generally does not depend on the type of entity
that makes the promotional message. For
example, a card may be marketed or labeled
as a gift card or gift certificate if anyone
(other than the purchaser of the card), including the issuer, the retailer, the program
manager that may distribute the card, or the

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payment network on which a card is used,
promotes the use of the card as a gift card or
gift certificate. A card, code, or other device,
including a general-purpose reloadable card,
is marketed or labeled as a gift card or gift
certificate even if it is only occasionally
marketed as a gift card or gift certificate.
For example, a network-branded general purpose reloadable card would be marketed or
labeled as a gift card or gift certificate if the
issuer principally advertises the card as a
less costly alternative to a bank account but
promotes the card in a television, radio,
newspaper, or Internet advertisement, or on
signage as ‘‘the perfect gift’’ during the holiday season. However, the mere mention of
the availability of gift cards or gift certificates in an advertisement or on a sign that
also indicates the availability of other excluded prepaid cards does not by itself cause
the excluded prepaid cards to be marketed as
a gift card or a gift certificate. For example,
the posting of a sign in a store that refers to
the availability of gift cards does not by
itself constitute the marketing of otherwise
excluded prepaid cards that may also be sold
in the store as gift cards or gift certificates,
provided that a consumer acting reasonably
under the circumstances would not be led to
believe that the sign applies to all prepaid
cards sold in the store. See, however, comment 20(b)(2)–4.ii.
3. Examples of marketed or labeled as a gift
card or gift certificate. i. Examples of marketed or labeled as a gift card or gift certificate include:
A. Using the word ‘‘gift’’ or ‘‘present’’ on a
card, certificate, or accompanying material,
including documentation, packaging and
promotional displays.
B. Representing or suggesting that a certificate or card can be given to another person, for example, as a ‘‘token of appreciation’’ or a ‘‘stocking stuffer,’’ or displaying a
congratulatory message on the card, certificate or accompanying material.
C. Incorporating gift-giving or celebratory
imagery or motifs, such as a bow, ribbon,
wrapped present, candle, or congratulatory
message, on a card, certificate, accompanying documentation, or promotional material.
ii. The term does not include:
A. Representing that a card or certificate
can be used as a substitute for a checking,
savings, or deposit account.
B. Representing that a card or certificate
can be used to pay for a consumer’s healthrelated expenses—for example, a card tied to
a health savings account.
C. Representing that a card or certificate
can be used as a substitute for traveler’s
checks or cash.
D. Representing that a card or certificate
can be used as a budgetary tool, for example,
by teenagers, or to cover emergency expenses.

4. Reasonable policies and procedures to avoid
marketing as a gift card. The exclusion for a
card, code, or other device that is reloadable
and not marketed or labeled as a gift card or
gift certificate in § 1005.20(b)(2) applies if a
reloadable card, code, or other device is not
marketed or labeled as a gift card or gift certificate and if persons subject to the rule, including issuers, program managers, and retailers, maintain policies and procedures
reasonably designed to avoid such marketing. Such policies and procedures may include contractual provisions prohibiting a
reloadable card, code, or other device from
being marketed or labeled as a gift card or
gift certificate, merchandising guidelines or
plans regarding how the product must be displayed in a retail outlet, and controls to regularly monitor or otherwise verify that the
card, code or other device is not being marketed as a gift card. Whether a reloadable
card, code, or other device has been marketed as a gift card or gift certificate will
depend on the facts and circumstances, including whether a reasonable consumer
would be led to believe that the card, code,
or other device is a gift card or gift certificate. The following examples illustrate the
application of § 1005.20(b)(2):
i. An issuer or program manager of prepaid
cards
agrees
to
sell
general-purpose
reloadable cards through a retailer. The contract between the issuer or program manager
and the retailer establishes the terms and
conditions under which the cards may be
sold and marketed at the retailer. The terms
and conditions prohibit the general-purpose
reloadable cards from being marketed as a
gift card or gift certificate, and require policies and procedures to regularly monitor or
otherwise verify that the cards are not being
marketed as such. The issuer or program
manager sets up one promotional display at
the retailer for gift cards and another physically separated display for excluded products under § 1005.20(b), including general-purpose reloadable cards and wireless telephone
cards, such that a reasonable consumer
would not believe that the excluded cards are
gift cards. The exclusion in § 1005.20(b)(2) applies because policies and procedures reasonably designed to avoid the marketing of the
general-purpose reloadable cards as gift
cards or gift certificates are maintained,
even if a retail clerk inadvertently stocks or
a consumer inadvertently places a generalpurpose reloadable card on the gift card display.
ii. Same facts as in i., except that the
issuer or program manager sets up a single
promotional display at the retailer on which
a variety of prepaid cards are sold, including
store
gift
cards
and
general-purpose
reloadable cards. A sign stating ‘‘Gift Cards’’
appears prominently at the top of the display. The exclusion in § 1005.20(b)(2) does not
apply with respect to the general-purpose

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reloadable cards because policies and procedures reasonably designed to avoid the marketing of excluded cards as gift cards or gift
certificates are not maintained.
iii. Same facts as in i., except that the
issuer or program manager sets up a single
promotional multi-sided display at the retailer on which a variety of prepaid card
products, including store gift cards and general-purpose reloadable cards are sold. Gift
cards are segregated from excluded cards,
with gift cards on one side of the display and
excluded cards on a different side of a display. Signs of equal prominence at the top of
each side of the display clearly differentiate
between gift cards and the other types of
prepaid cards that are available for sale. The
retailer does not use any more conspicuous
signage suggesting the general availability
of gift cards, such as a large sign stating
‘‘Gift Cards’’ at the top of the display or located near the display. The exclusion in
§ 1005.20(b)(2) applies because policies and
procedures reasonably designed to avoid the
marketing of the general-purpose reloadable
cards as gift cards or gift certificates are
maintained, even if a retail clerk inadvertently stocks or a consumer inadvertently
places a general-purpose reloadable card on
the gift card display.
iv. Same facts as in i., except that the retailer sells a variety of prepaid card products, including store gift cards and generalpurpose reloadable cards, arranged side-byside in the same checkout lane. The retailer
does not affirmatively indicate or represent
that gift cards are available, such as by displaying any signage or other indicia at the
checkout lane suggesting the general availability of gift cards. The exclusion in
§ 1005.20(b)(2) applies because policies and
procedures reasonably designed to avoid
marketing the general-purpose reloadable
cards as gift cards or gift certificates are
maintained.
5. Online sales of prepaid cards. Some Web
sites may prominently advertise or promote
the availability of gift cards or gift certificates in a manner that suggests to a consumer that the Web site exclusively sells gift
cards or gift certificates. For example, a Web
site may display a banner advertisement or a
graphic on the home page that prominently
states ‘‘Gift Cards,’’ ‘‘Gift Giving,’’ or similar language without mention of other available products, or use a web address that includes only a reference to gift cards or gift
certificates in the address. In such a case, a
consumer acting reasonably under the circumstances could be led to believe that all
prepaid products sold on the Web site are gift
cards or gift certificates. Under these facts,
the Web site has marketed all such products,
including general-purpose reloadable cards,
as gift cards or gift certificates, and the exclusion in § 1005.20(b)(2) does not apply.

6. Temporary non-reloadable cards issued in
connection with a general-purpose reloadable
card. Certain general-purpose reloadable
cards that are typically marketed as an account substitute initially may be sold or
issued in the form of a temporary nonreloadable card. After the card is purchased,
the cardholder is typically required to call
the issuer to register the card and to provide
identifying information in order to obtain a
reloadable replacement card. In most cases,
the temporary non-reloadable card can be
used for purchases until the replacement
reloadable card arrives and is activated by
the cardholder. Because the temporary nonreloadable card may only be obtained in connection with the general-purpose reloadable
card, the exclusion in § 1005.20(b)(2) applies so
long as the card is not marketed as a gift
card or gift certificate.
Paragraph 20(b)(4)
1. Marketed to the general public. A card,
code, or other device is marketed to the general public if the potential use of the card,
code, or other device is directly or indirectly
offered, advertised, or otherwise promoted to
the general public. A card, code, or other device may be marketed to the general public
through any advertising medium, including
television, radio, newspaper, the Internet, or
signage. However, the posting of a company
policy that funds may be disbursed by prepaid card (such as a sign posted at a cash
register or customer service center stating
that store credit will be issued by prepaid
card) does not constitute the marketing of a
card, code, or other device to the general
public. In addition, the method of distribution by itself is not dispositive in determining whether a card, code, or other device
is marketed to the general public. Factors
that may be considered in determining
whether the exclusion applies to a particular
card, code, or other device include the means
or channel through which the card, code, or
device may be obtained by a consumer, the
subset of consumers that are eligible to obtain the card, code, or device, and whether
the availability of the card, code, or device is
advertised or otherwise promoted in the
marketplace.
2. Examples. The following examples illustrate the application of the exclusion in
§ 1005.20(b)(4):
i. A merchant sells its gift cards at a discount to a business which may give them to
employees or loyal consumers as incentives
or rewards. In determining whether the gift
card
falls
within
the
exclusion
in
§ 1005.20(b)(4), the merchant must consider
whether the card is of a type that is advertised or made available to consumers generally or can be obtained elsewhere. If the
card can also be purchased through retail
channels, the exclusion in § 1005.20(b)(4) does

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not apply, even if the consumer obtained the
card from the business as an incentive or reward. See, however, § 1005.20(b)(3).
ii. A national retail chain decides to market its gift cards only to members of its frequent buyer program. Similarly, a bank may
decide to sell gift cards only to its customers. If a member of the general public
may become a member of the program or a
customer of the bank, the card does not fall
within the exclusion in § 1005.20(b)(4) because
the general public has the ability to obtain
the cards. See, however, § 1005.20(b)(3).
iii. A card issuer advertises a reloadable
card to teenagers and their parents promoting the card for use by teenagers for occasional expenses, schoolbooks and emergencies and by parents to monitor spending.
Because the card is marketed to and may be
sold to any member of the general public,
the exclusion in § 1005.20(b)(4) does not apply.
See, however, § 1005.20(b)(2).
iv. An insurance company settles a policyholder’s claim and distributes the insurance
proceeds to the consumer by means of a prepaid card. Because the prepaid card is simply
the means for providing the insurance proceeds to the consumer and the availability of
the card is not advertised to the general public, the exclusion in § 1005.20(b)(4) applies.
v. A merchant provides store credit to a
consumer following a merchandise return by
issuing a prepaid card that clearly indicates
that the card contains funds for store credit.
Because the prepaid card is issued for the
stated purpose of providing store credit to
the consumer and the ability to receive refunds by a prepaid card is not advertised to
the general public, the exclusion in
§ 1005.20(b)(4) applies.
vi. A tax preparation company elects to
distribute tax refunds to its clients by
issuing prepaid cards, but does not advertise
or otherwise promote the ability to receive
proceeds in this manner. Because the prepaid
card is simply the mechanism for providing
the tax refund to the consumer, and the tax
preparer does not advertise the ability to obtain tax refunds by a prepaid card, the exclusion in § 1005.20(b)(4) applies. However, if the
tax preparer promotes the ability to receive
tax refund proceeds through a prepaid card
as a way to obtain ‘‘faster’’ access to the proceeds, the exclusion in § 1005.20(b)(4) does not
apply.

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Paragraph 20(b)(5)
1. Exclusion explained. To qualify for the exclusion in § 1005.20(b)(5), the sole means of
issuing the card, code, or other device must
be in a paper form. Thus, the exclusion generally applies to certificates issued in paper
form where solely the paper itself may be
used to purchase goods or services. A card,
code or other device is not issued solely in
paper form simply because it may be reproduced or printed on paper. For example, a

bar code, card or certificate number, or certificate or coupon electronically provided to
a consumer and redeemable for goods and
services is not issued in paper form, even if
it may be reproduced or otherwise printed on
paper by the consumer. In this circumstance,
although the consumer might hold a paper
facsimile of the card, code, or other device,
the exclusion does not apply because the information necessary to redeem the value was
initially issued in electronic form. A paper
certificate is within the exclusion regardless
of whether it may be redeemed electronically. For example, a paper certificate or receipt that bears a bar code, code, or account
number falls within the exclusion in
§ 1005.20(b)(5) if the bar code, code, or account
number is not issued in any form other than
on the paper. In addition, the exclusion in
§ 1005.20(b)(5) continues to apply in circumstances where an issuer replaces a gift
certificate that was initially issued in paper
form with a card or electronic code (for example, to replace a lost paper certificate).
2. Examples. The following examples illustrate the application of the exclusion in
§ 1005.20(b)(5):
i. A merchant issues a paper gift certificate that entitles the bearer to a specified
dollar amount that can be applied towards a
future meal. The merchant fills in the certificate with the name of the certificate
holder and the amount of the certificate. The
certificate falls within the exclusion in
§ 1005.20(b)(5) because it is issued in paper
form only.
ii. A merchant allows a consumer to prepay for a good or service, such as a car wash
or time at a parking meter, and issues a
paper receipt bearing a numerical or bar
code that the consumer may redeem to obtain the good or service. The exclusion in
§ 1005.20(b)(5) applies because the code is
issued in paper form only.
iii. A merchant issues a paper certificate
or receipt bearing a bar code or certificate
number that can later be scanned or entered
into the merchant’s system and redeemed by
the certificate or receipt holder towards the
purchase of goods or services. The bar code
or certificate number is not issued by the
merchant in any form other than paper. The
exclusion in § 1005.20(b)(5) applies because the
bar code or certificate number is issued in
paper form only.
iv. An online merchant electronically provides a bar code, card or certificate number,
or certificate or coupon to a consumer that
the consumer may print on a home printer
and later redeem towards the purchase of
goods or services. The exclusion in
§ 1005.20(b)(5) does not apply because the bar
code or card or certificate number was issued
to the consumer in electronic form, even
though it can be reproduced or otherwise
printed on paper by the consumer.

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Paragraph 20(b)(6)
1. Exclusion explained. The exclusion for
cards, codes, or other devices that are redeemable solely for admission to events or
venues at a particular location or group of
affiliated locations generally applies to
cards, codes, or other devices that are not redeemed for a specified monetary value, but
rather solely for admission or entry to an
event or venue. The exclusion also covers a
card, code, or other device that is usable to
purchase goods or services in addition to
entry into the event or the venue, either at
the event or venue or at an affiliated location or location in geographic proximity to
the event or venue.
2. Examples. The following examples illustrate the application of the exclusion in
§ 1005.20(b)(6):
i. A consumer purchases a prepaid card
that entitles the holder to a ticket for entry
to an amusement park. The prepaid card
may only be used for entry to the park. The
card
qualifies
for
the
exclusion
in
§ 1005.20(b)(6) because it is redeemable for admission or entry and for goods or services in
conjunction with that admission. In addition, if the prepaid card does not have a
monetary value, and therefore is not ‘‘issued
in a specified amount,’’ the card does not
meet the definitions of ‘‘gift certificate,’’
‘‘store gift card,’’ or ‘‘general-use prepaid
card’’ in § 1005.20(a). See comment 20(a)–3.
ii. Same facts as in i., except that the gift
card also entitles the holder of the gift card
to a dollar amount that can be applied towards the purchase of food and beverages or
goods or services at the park or at nearby affiliated locations. The card qualifies for the
exclusion in § 1005.20(b)(6) because it is redeemable for admission or entry and for
goods or services in conjunction with that
admission.
iii. A consumer purchases a $25 gift card
that the holder of the gift card can use to
make purchases at a merchant, or, alternatively, can apply towards the cost of admission to the merchant’s affiliated amusement park. The card is not eligible for the
exclusion in § 1005.20(b)(6) because it is not
redeemable solely for the admission or ticket itself (or for goods and services purchased
in conjunction with such admission). The
card meets the definition of ‘‘store gift card’’
and is therefore subject to § 1005.20, unless a
different exclusion applies.
20(c) Form of Disclosures

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20(c)(1) Clear and Conspicuous
1. Clear and conspicuous standard. All disclosures required by this section must be
clear and conspicuous. Disclosures are clear
and conspicuous for purposes of this section
if they are readily understandable and, in
the case of written and electronic disclo-

sures, the location and type size are readily
noticeable to consumers. Disclosures need
not be located on the front of the certificate
or card, except where otherwise required, to
be considered clear and conspicuous. Disclosures are clear and conspicuous for the purposes of this section if they are in a print
that contrasts with and is otherwise not obstructed by the background on which they
are printed. For example, disclosures on a
card or computer screen are not likely to be
conspicuous if obscured by a logo printed in
the background. Similarly, disclosures on
the back of a card that are printed on top of
indentations from embossed type on the
front of the card are not likely to be conspicuous if the indentations obstruct the
readability of the disclosures. To the extent
permitted, oral disclosures meet the standard when they are given at a volume and
speed sufficient for a consumer to hear and
comprehend them.
2. Abbreviations and symbols. Disclosures
may contain commonly accepted or readily
understandable abbreviations or symbols,
such as ‘‘mo.’’ for month or a ‘‘/’’ to indicate
‘‘per.’’ Under the clear and conspicuous
standard, it is sufficient to state, for example, that a particular fee is charged ‘‘$2.50/
mo. after 12 mos.’’
20(c)(2) Format
1. Electronic disclosures. Disclosures provided electronically pursuant to this section
are not subject to compliance with the consumer consent and other applicable provisions of the Electronic Signatures in Global
and National Commerce Act (E–Sign Act) (15
U.S.C. 7001 et seq.). Electronic disclosures
must be in a retainable form. For example, a
person may satisfy the requirement if it provides an online disclosure in a format that is
capable of being printed. Electronic disclosures may not be provided through a
hyperlink or in another manner by which the
purchaser can bypass the disclosure. A person is not required to confirm that the consumer has read the electronic disclosures.
20(c)(3) Disclosure Prior to Purchase
1. Method of purchase. The disclosures required by this paragraph must be provided
before a certificate or card is purchased regardless of whether the certificate or card is
purchased in person, online, by telephone, or
by other means.
2. Electronic disclosures. Section 1005.20(c)(3)
provides that the disclosures required by this
section must be provided to the consumer
prior to purchase. For certificates or cards
purchased electronically, disclosures made
to the consumer after a consumer has initiated an online purchase of a certificate or
card, but prior to completing the purchase of
the certificate or card, would satisfy the
prior-to-purchase
requirement.
However,

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electronic disclosures made available on a
person’s Web site that may or may not be
accessed by the consumer are not provided to
the consumer and therefore would not satisfy the prior-to-purchase requirement.
3. Non-physical certificates and cards. If no
physical certificate or card is issued, the disclosures must be provided to the consumer
before the certificate or card is purchased.
For example, where a gift certificate or card
is a code that is provided by telephone, the
required disclosures may be provided orally
prior to purchase. See also § 1005.20(c)(2).
20(c)(4) Disclosures on the Certificate or Card
1. Non-physical certificates and cards. If no
physical certificate or card is issued, the disclosures required by this paragraph must be
disclosed on the code, confirmation, or other
written or electronic document provided to
the consumer. For example, where a gift certificate or card is a code or confirmation
that is provided to a consumer online or sent
to a consumer’s email address, the required
disclosures may be provided electronically
on the same document as the code or confirmation.2. No disclosures on a certificate or
card. Disclosures required by § 1005.20(c)(4)
need not be made on a certificate or card if
it is accompanied by a certificate or card
that complies with this section. For example, a person may issue or sell a supplemental gift card that is smaller than a
standard size and that does not bear the applicable disclosures if it is accompanied by a
fully compliant certificate or card. See also
comment 20(c)(2)–2.

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20(d) Prohibition on Imposition of Fees or
Charges
1. One-year period. Section 1005.20(d) provides that a person may impose a dormancy,
inactivity, or service fee only if there has
been no activity with respect to a certificate
or card for one year. The following examples
illustrate this rule:
i. A certificate or card is purchased on January 15 of year one. If there has been no activity on the certificate or card since the
certificate or card was purchased, a dormancy, inactivity, or service fee may be imposed on the certificate or card on January
15 of year two.
ii. Same facts as i., and a fee was imposed
on January 15 of year two. Because no more
than one dormancy, inactivity, or service fee
may be imposed in any given calendar
month, the earliest date that another dormancy, inactivity, or service fee may be imposed, assuming there continues to be no activity on the certificate or card, is February
1 of year two. A dormancy, inactivity, or
service fee is permitted to be imposed on
February 1 of year two because there has
been no activity on the certificate or card
for the preceding year (February 1 of year

one through January 31 of year two), and
February is a new calendar month. The imposition of a fee on January 15 of year two is
not activity for purposes of § 1005.20(d). See
comment 20(a)(7)–1.
iii. Same facts as i., and a fee was imposed
on January 15 of year two. On January 31 of
year two, the consumer uses the card to
make a purchase. Another dormancy, inactivity, or service fee could not be imposed
until January 31 of year three, assuming
there has been no activity on the certificate
or card since January 31 of year two.
2. Relationship between §§ 1005.20(d)(2) and
(c)(3). Sections 1005.20(d)(2) and (c)(3) contain
similar, but not identical, disclosure requirements. Section 1005.20(d)(2) requires the disclosure of dormancy, inactivity, and service
fees on a certificate or card. Section
1005.20(c)(3) requires that vendor person that
issues or sells such certificate or card disclose to a consumer any dormancy, inactivity, and service fees associated with the
certificate or card before such certificate or
card may be purchased. Depending on the
context, a single disclosure that meets the
clear and conspicuous requirements of both
§§ 1005.20(d)(2) and (c)(3) may be used to disclose a dormancy, inactivity, or service fee.
For example, if the disclosures on a certificate or card, required by § 1005.20(d)(2), are
visible to the consumer without having to
remove packaging or other materials sold
with the certificate or card, for a purchase
made in person, the disclosures also meet the
requirements of § 1005.20(c)(3). Otherwise, a
dormancy, inactivity, or service fee may
need to be disclosed multiple times to satisfy
the requirements of §§ 1005.20(d)(2) and (c)(3).
For example, if the disclosures on a certificate or card, required by § 1005.20(d)(2), are
obstructed by packaging sold with the certificate or card, for a purchase made in person, they also must be disclosed on the packaging sold with the certificate or card to
meet the requirements of § 1005.20(c)(3).
3. Relationship between §§ 1005.20(d)(2), (e)(3),
and (f)(2). In addition to any disclosures required under § 1005.20(d)(2), any applicable
disclosures under §§ 1005.20(e)(3) and (f)(2) of
this section must also be provided on the
certificate or card.
4. One fee per month. Under § 1005.20(d)(3), no
more than one dormancy, inactivity, or service fee may be imposed in any given calendar
month. For example, if a dormancy fee is imposed on January 1, following a year of inactivity, and a consumer makes a balance inquiry on January 15, a balance inquiry fee
may not be imposed at that time because a
dormancy fee was already imposed earlier
that month and a balance inquiry fee is a
type of service fee. If, however, the dormancy fee could be imposed on January 1,
following a year of inactivity, and the consumer makes a balance inquiry on the same
date, the person assessing the fees may

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choose whether to impose the dormancy fee
or the balance inquiry fee on January 1. The
restriction in § 1005.20(d)(3) does not apply to
any fee that is not a dormancy, inactivity,
or service fee. For example, assume a service
fee is imposed on a general-use prepaid card
on January 1, following a year of inactivity.
If a consumer cashes out the remaining
funds by check on January 15, a cash-out fee,
to the extent such cash-out fee is permitted
under § 1005.20(e)(4), may be imposed at that
time because a cash-out fee is not a dormancy, inactivity, or service fee.
5. Accumulation of fees. Section 1005.20(d)
prohibits the accumulation of dormancy, inactivity, or service fees for previous periods
into a single fee because such a practice
would
circumvent
the
limitation
in
§ 1005.20(d)(3) that only one fee may be
charged per month. For example, if a consumer purchases and activates a store gift
card on January 1 but never uses the card, a
monthly maintenance fee of $2.00 a month
may not be accumulated such that a fee of
$24 is imposed on January 1 the following
year.

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20(e) Prohibition on Sale of Gift Certificates or
Cards With Expiration Dates
1.
Reasonable
opportunity.
Under
§ 1005.20(e)(1), no person may sell or issue a
gift certificate, store gift card, or generaluse prepaid card with an expiration date, unless there are policies and procedures in
place to provide consumers with a reasonable
opportunity to purchase a certificate or card
with at least five years remaining until the
certificate or card expiration date. Consumers are deemed to have a reasonable opportunity to purchase a certificate or card
with at least five years remaining until the
certificate or card expiration date if:
i. There are policies and procedures established to prevent the sale of a certificate or
card unless the certificate or card expiration
date is at least five years after the date the
certificate or card was sold or initially
issued to a consumer; or
ii. A certificate or card is available to consumers to purchase five years and six
months before the certificate or card expiration date.
2. Applicability to replacement certificates or
cards. Section 1005.20(e)(1) applies solely to
the purchase of a certificate or card. Therefore, § 1005.20(e)(1) does not apply to the replacement of such certificates or cards. Certificates or cards issued as a replacement
may bear a certificate or card expiration
date of less than five years from the date of
issuance of the replacement certificate or
card. If the certificate or card expiration
date for a replacement certificate or card is
later
than
the
date
set
forth
in
§ 1005.20(e)(2)(i),
then
pursuant
to
§ 1005.20(e)(2), the expiration date for the underlying funds at the time the replacement

certificate or card is issued must be no earlier than the expiration date for the replacement certificate or card. For purposes of
§ 1005.20(e)(2), funds are not considered to be
loaded to a store gift card or general-use prepaid card solely because a replacement card
has been issued or activated for use.
3. Disclosure of funds expiration—date not required. Section 1005.20(e)(3)(i) does not require disclosure of the precise date the funds
will expire. It is sufficient to disclose, for example, ‘‘Funds expire 5 years from the date
funds last loaded to the card.’’; ‘‘Funds can
be used 5 years from the date money was last
added to the card.’’; or ‘‘Funds do not expire.’’
4. Disclosure not required if no expiration
date. If the certificate or card and underlying
funds do not expire, the disclosure required
by § 1005.20(e)(3)(i) need not be stated on the
certificate or card. If the certificate or card
and underlying funds expire at the same
time, only one expiration date need be disclosed on the certificate or card.
5. Reference to toll-free telephone number and
Web site. If a certificate or card does not expire, or if the underlying funds are not available after the certificate or card expires, the
disclosure required by § 1005.20(e)(3)(ii) need
not be stated on the certificate or card. See,
however, § 1005.20(f)(2).
6. Relationship to § 226.20(f)(2). The same
toll-free telephone number and Web site may
be used to comply with §§ 226.20(e)(3)(ii) and
(f)(2). Neither a toll-free number nor a Web
site must be maintained or disclosed if no
fees are imposed in connection with a certificate or card, and the certificate or card and
the underlying funds do not expire.
7. Distinguishing between certificate or card
expiration and funds expiration. If applicable,
a disclosure must be made on the certificate
or card that notifies a consumer that the
certificate or card expires, but the funds either do not expire or expire later than the
certificate or card, and that the consumer
may contact the issuer for a replacement
card. The disclosure must be made with
equal prominence and in close proximity to
the certificate or card expiration date. The
close proximity requirement does not apply
to oral disclosures. In the case of a certificate or card, close proximity means that the
disclosure must be on the same side as the
certificate or card expiration date. For example, if the disclosure is the same type size
and is located immediately next to or directly above or below the certificate or card
expiration date, without any intervening
text or graphical displays, the disclosures
would be deemed to be equally prominent
and in close proximity. The disclosure need
not be embossed on the certificate or card to
be deemed equally prominent, even if the expiration date is embossed on the certificate
or card. The disclosure may state on the
front of the card, for example, ‘‘Funds expire

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Bur. of Consumer Financial Protection

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after card. Call for replacement card.’’ or
‘‘Funds do not expire. Call for new card after
09/2016.’’ Disclosures made pursuant to
§ 1005.20(e)(3)(iii)(A) may also fulfill the requirements of § 1005.20(e)(3)(i). For example,
making a disclosure that ‘‘Funds do not expire’’ to comply with § 1005.20(e)(3)(iii)(A)
also
fulfills
the
requirements
of
§ 1005.20(e)(3)(i).
8. Expiration date safe harbor. A nonreloadable certificate or card that bears an
expiration date that is at least seven years
from the date of manufacture need not state
the disclosure required by § 1005.20(e)(3)(iii).
However, § 1005.20(e)(1) still prohibits the sale
or issuance of such certificate or card unless
there are policies and procedures in place to
provide a consumer with a reasonable opportunity to purchase the certificate or card
with at least five years remaining until the
certificate or card expiration date. In addition, under § 1005.20(e)(2), the funds may not
expire before the certificate or card expiration date, even if the expiration date of the
certificate or card bears an expiration date
that is more than five years from the date of
purchase. For purposes of this safe harbor,
the date of manufacture is the date on which
the certificate or card expiration date is
printed on the certificate or card.
9. Relationship between §§ 1005.20(d)(2), (e)(3),
and (f)(2). In addition to any disclosures required to be made under § 1005.20(e)(3), any
applicable disclosures under §§ 1005.20(d)(2)
and (f)(2) must also be provided on the certificate or card.
10. Replacement or remaining balance of an
expired certificate or card. When a certificate
or card expires, but the underlying funds
have not expired, an issuer, at its option in
accordance with applicable state law, may
provide either a replacement certificate or
card or otherwise provide the certificate or
card holder, for example, by check, with the
remaining balance on the certificate or card.
In either case, the issuer may not charge a
fee for the service.
11. Replacement of a lost or stolen certificate
or card not required. Section 1005.20(e)(4) does
not require the replacement of a certificate
or card that has been lost or stolen.
12. Date of issuance or loading. For purposes
of § 1005.20(e)(2)(i), a certificate or card is not
issued or loaded with funds until the certificate or card is activated for use.
13. Application of expiration date provisions
after redemption of certificate or card. The requirement that funds underlying a certificate or card must not expire for at least five
years from the date of issuance or date of
last load ceases to apply once the certificate
or card has been fully redeemed, even if the
underlying funds are not used to contemporaneously purchase a specific good or service. For example, some certificates or cards
can be used to purchase music, media, or virtual goods. Once redeemed by a consumer,

the entire balance on the certificate or card
is debited from the certificate or card and
credited or transferred to another ‘‘account’’
established by the merchant of such goods or
services. The consumer can then make purchases of songs, media, or virtual goods from
the merchant using that ‘‘account’’ either at
the time the value is transferred from the
certificate or card or at a later time. Under
these circumstances, once the card has been
fully redeemed and the ‘‘account’’ credited
with the amount of the underlying funds, the
five-year minimum expiration term no
longer applies to the underlying funds. However, if the consumer only partially redeems
the value of the certificate or card, the fiveyear minimum expiration term requirement
continues to apply to the funds remaining on
the certificate or card.
20(f) Additional Disclosure Requirements for
Gift Certificates or Cards
1. Reference to toll-free telephone number and
Web site. If a certificate or card does not have
any fees, the disclosure under § 1005.20(f)(2) is
not required on the certificate or card. See,
however, § 1005.20(e)(3)(ii).
2. Relationship to § 226.20(e)(3)(ii). The same
toll-free telephone number and Web site may
be used to comply with §§ 226.20(e)(3)(ii) and
(f)(2). Neither a toll-free number nor a Web
site must be maintained or disclosed if no
fees are imposed in connection with a certificate or card, and both the certificate or card
and underlying funds do not expire.
3. Relationship between §§ 1005.20(d)(2), (e)(3),
and (f)(2). In addition to any disclosures required pursuant to § 1005.20(f)(2), any applicable disclosures under §§ 1005.20(d)(2) and (e)(3)
must also be provided on the certificate or
card.
20(g) Compliance Dates
1. Period of eligibility for loyalty, award, or
promotional programs. For purposes of
§ 1005.20(g)(2), the period of eligibility is the
time period during which a consumer must
engage in a certain action or actions to meet
the terms of eligibility for a loyalty, award,
or promotional program and obtain the card,
code, or other device. Under § 1005.20(g)(2), a
gift card issued pursuant to a loyalty, award,
or promotional program that began prior to
August 22, 2010 need not state the disclosures
in § 1005.20(a)(4)(iii) regardless of whether the
consumer became eligible to receive the gift
card prior to August 22, 2010, or after that
date. For example, a product manufacturer
may provide a $20 rebate card to a consumer
if the consumer purchases a particular product and submits a fully completed entry between January 1, 2010 and December 31, 2010.
Similarly, a merchant may provide a $20 gift
card to a consumer if the consumer makes
$200 worth of qualifying purchases between
June 1, 2010 and October 30, 2010. Under both

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examples, gift cards provided pursuant to
these loyalty, award, or promotional programs need not state the disclosures in
§ 1005.20(a)(4)(iii) to qualify for the exclusion
in § 1005.20(b)(3) for loyalty, award, or promotional gift cards because the period of eligibility for each program began prior to August 22, 2010.
20(h) Temporary Exemption
20(h)(1) Delayed Effective Date
1. Application to certificates or cards produced prior to April 1, 2010. Certificates or
cards produced prior to April 1, 2010 may be
sold to a consumer on or after August 22, 2010
without satisfying the requirements of
§§ 1005.20(c)(3), (d)(2), (e)(1), (e)(3), and (f)
through January 30, 2011, provided that
issuers of such certificates or cards comply
with the additional substantive and disclosure
requirements
of
§§ 1005.20(h)(1)(i)
through (iv). Issuers of certificates or cards
produced prior to April 1, 2010 need not satisfy these additional requirements if the certificates or cards fully comply with the rule
(§§ 1005.20(a) through (f)). For example, the
in-store signage and other disclosures required by § 1005.20(h)(2) do not apply to gift
cards produced prior to April 1, 2010 that do
not have fees and do not expire, and which
otherwise comply with the rule.
2. Expiration of temporary exemption. Certificates or cards produced prior to April 1, 2010
that do not fully comply with §§ 1005.20(a)
through (f) may not be issued or sold to consumers on or after January 31, 2011.
20(h)(2) Additional Disclosures
1. Disclosures through third parties. Issuers
may make the disclosures required by
§ 1005.20(h)(2) through a third party, such as a
retailer or merchant. For example, an issuer
may have a merchant install in-store signage
with the disclosures required by § 1005.20(h)(2)
on the issuer’s behalf.
2. General advertising disclosures. Section
1005.20(h)(2) does not impose an obligation on
the issuer to advertise gift certificates, store
gift cards, or general-use prepaid cards.
SECTION 1005.30—REMITTANCE TRANSFER
DEFINITIONS
1. Applicability of definitions in subpart A.
Except as modified or limited by subpart B
(which modifications or limitations apply
only to subpart B), the definitions in § 1005.2
apply to all of Regulation E, including subpart B.

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30(b) Business Day
1. General. A business day, as defined in
§ 1005.30(b), includes the entire 24-hour period
ending at midnight, and a notice given pursuant to any section of subpart B is effective
even if given outside of normal business

hours. A remittance transfer provider is not
required under subpart B to make telephone
lines available on a 24-hour basis.
2. Substantially all business functions. ‘‘Substantially all business functions’’ include
both the public and the back-office operations of the provider. For example, if the offices of a provider are open on Saturdays for
customers to request remittance transfers,
but not for performing internal functions
(such as investigating errors), then Saturday
is not a business day for that provider. In
this case, Saturday does not count toward
the business-day standard set by subpart B
for resolving errors, processing refunds, etc.
3. Short hours. A provider may determine,
at its election, whether an abbreviated day is
a business day. For example, if a provider engages in substantially all business functions
until noon on Saturdays instead of its usual
3 p.m. closing, it may consider Saturday a
business day.
4. Telephone line. If a provider makes a
telephone line available on Sundays for cancelling the transfer, but performs no other
business functions, Sunday is not a business
day under the ‘‘substantially all business
functions’’ standard.
30(c) Designated Recipient
1. Person. A designated recipient can be either a natural person or an organization,
such as a corporation. See § 1005.2(j) (definition of person). The designated recipient is
identified by the name of the person provided
by the sender to the remittance transfer provider and disclosed by the provider to the
sender pursuant to § 1005.31(b)(1)(iii).
2. Location in a foreign country. i. A remittance transfer is received at a location in a
foreign country if funds are to be received at
a location physically outside of any State, as
defined in § 1005.2(l). A specific pick-up location need not be designated for funds to be
received at a location in a foreign country. If
it is specified that the funds will be transferred to a foreign country to be picked up
by the designated recipient, the transfer will
be received at a location in a foreign country, even though a specific pick-up location
within that country has not been designated.
If it is specified that the funds will be received at a location on a U.S. military installation that is physically located in a foreign country, the transfer will be received in
a State.
ii. For transfers to a designated recipient’s
account, whether funds are to be received at
a location physically outside of any State
depends on where the recipient’s account is
located. If the account is located in a State,
the funds will not be received at a location
in a foreign country. Accounts that are located on a U.S. military installation that is
physically located in a foreign country are
located in a State.

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iii. Where the sender does not specify information about a designated recipient’s account, but instead provides information
about the recipient, a remittance transfer
provider may make the determination of
whether the funds will be received at a location in a foreign country on information
that is provided by the sender, and other information the provider may have, at the
time the transfer is requested. For example,
if a consumer in a State gives a provider the
recipient’s email address, and the provider
has no other information about whether the
funds will be received by the recipient at a
location in a foreign country, then the provider may determine that funds are not to be
received at a location in a foreign country.
However, if the provider at the time the
transfer is requested has additional information indicating that funds are to be received
in a foreign country, such as if the recipient’s email address is already registered with
the provider and associated with a foreign
account, then the provider has sufficient information to conclude that the remittance
transfer will be received at a location in a
foreign country. Similarly, if a consumer in
a State purchases a prepaid card, and the
provider mails or delivers the card directly
to the consumer, the provider may conclude
that funds are not to be received in a foreign
country, because the provider does not know
whether the consumer will subsequently
send the prepaid card to a recipient in a foreign country. In contrast, the provider has
sufficient information to conclude that the
funds are to be received in a foreign country
if the remittance transfer provider sends a
prepaid card to a specified recipient in a foreign country, even if a person located in a
State, including the sender, retains the ability to access funds on the prepaid card.
3. Sender as designated recipient. A ‘‘sender,’’
as defined in § 1005.30(g), may also be a designated recipient if the sender meets the definition
of
‘‘designated
recipient’’
in
§ 1005.30(c). For example, a sender may request that a provider send an electronic
transfer of funds from the sender’s checking
account in a State to the sender’s checking
account located in a foreign country. In this
case, the sender would also be a designated
recipient.

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30(d) Preauthorized Remittance Transfer
1. Advance authorization. A preauthorized
remittance transfer is a remittance transfer
authorized in advance of a transfer that will
take place on a recurring basis, at substantially regular intervals, and will require no
further action by the consumer to initiate
the transfer. In a bill-payment system, for
example, if the consumer authorizes a remittance transfer provider to make monthly
payments to a payee by means of a remittance transfer, and the payments take place

without further action by the consumer, the
payments are preauthorized remittance
transfers. In contrast, if the consumer must
take action each month to initiate a transfer
(such as by entering instructions on a telephone or home computer), the payments are
not preauthorized remittance transfers.
30(e) Remittance Transfer
1. Electronic transfer of funds. The definition
of ‘‘remittance transfer’’ requires an electronic transfer of funds. The term electronic
has the meaning given in section 106(2) of the
Electronic Signatures in Global and National
Commerce Act. There may be an electronic
transfer of funds if a provider makes an electronic book entry between different settlement accounts to effectuate the transfer.
However, where a sender mails funds directly
to a recipient, or provides funds to a courier
for delivery to a foreign country, there is not
an electronic transfer of funds. Similarly,
generally, where a provider issues a check,
draft, or other paper instrument to be mailed
to a person abroad, there is not an electronic
transfer of funds. Nonetheless, an electronic
transfer of funds occurs for a payment made
by a provider under a bill-payment service
available to a consumer via computer or
other electronic means, unless the terms of
the bill-payment service explicitly state that
all payments, or all payments to a particular
payee or payees, will be solely by check,
draft, or similar paper instrument drawn on
the consumer’s account to be mailed abroad,
and the payee or payees that will be paid in
this manner are identified to the consumer.
With respect to such a bill-payment service,
if a provider provides a check, draft or similar paper instrument drawn on a consumer’s
account to be mailed abroad for a payee that
is not identified to the consumer as described above, this payment by check, draft
or similar payment instrument will be an
electronic transfer of funds.
2. Sent by a remittance transfer provider. i.
The definition of ‘‘remittance transfer’’ requires that a transfer be ‘‘sent by a remittance transfer provider.’’ This means that
there must be an intermediary that is directly engaged with the sender to send an
electronic transfer of funds on behalf of the
sender to a designated recipient.
ii. A payment card network or other third
party payment service that is functionally
similar to a payment card network does not
send a remittance transfer when a consumer
provides a debit, credit or prepaid card directly to a foreign merchant as payment for
goods or services. In such a case, the payment card network or third party payment
service is not directly engaged with the sender to send a transfer of funds to a person in
a foreign country; rather, the network or

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third party payment service is merely providing contemporaneous third-party payment processing and settlement services on
behalf of the merchant or the card issuer,
rather than on behalf of the sender. In such
a case, the card issuer also is not directly engaged with the sender to send an electronic
transfer of funds to the foreign merchant
when the card issuer provides payment to
the merchant. Similarly, where a consumer
provides a checking or other account number, or a debit, credit or prepaid card, directly to a foreign merchant as payment for
goods or services, the merchant is not acting
as an intermediary that sends a transfer of
funds on behalf of the sender when it submits
the payment information for processing.
iii. However, a card issuer or a payment
network may offer a service to a sender
where the card issuer or a payment network
is an intermediary that is directly engaged
with the sender to obtain funds using the
sender’s debit, prepaid or credit card and to
send those funds to a recipient’s checking account located in a foreign country. In this
case, the card issuer or the payment network
is an intermediary that is directly engaged
with the sender to send an electronic transfer of funds on behalf of the sender, and this
transfer of funds is a remittance transfer because it is made to a designated recipient.
See comment 30(c)–2.ii.
3. Examples of remittance transfers.
i. Examples of remittance transfers include:
A. Transfers where the sender provides
cash or another method of payment to a
money transmitter or financial institution
and requests that funds be sent to a specified
location or account in a foreign country.
B. Consumer wire transfers, where a financial institution executes a payment order
upon a sender’s request to wire money from
the sender’s account to a designated recipient.
C. An addition of funds to a prepaid card
by a participant in a prepaid card program,
such as a prepaid card issuer or its agent,
that is directly engaged with the sender to
add these funds, where the prepaid card is
sent or was previously sent by a participant
in the prepaid card program to a person in a
foreign country, even if a person located in a
State (including a sender) retains the ability
to withdraw such funds.
D. International ACH transactions sent by
the sender’s financial institution at the
sender’s request.
E. Online bill payments and other electronic transfers that a sender schedules in
advance, including preauthorized remittance
transfers, made by the sender’s financial institution at the sender’s request to a designated recipient.
ii. The term remittance transfer does not
include, for example:

A. A consumer’s provision of a debit, credit
or prepaid card, directly to a foreign merchant as payment for goods or services because the issuer is not directly engaged with
the sender to send an electronic transfer of
funds to the foreign merchant when the
issuer provides payment to the merchant.
See comment 30(e)–2.
B. A consumer’s deposit of funds to a
checking or savings account located in a
State, because there has not been a transfer
of funds to a designated recipient. See comment 30(c)–2.ii.
C. Online bill payments and other electronic transfers that senders can schedule in
advance, including preauthorized transfers,
made through the Web site of a merchant located in a foreign country and via direct provision of a checking account, credit card,
debit card or prepaid card number to the
merchant, because the financial institution
is not directly engaged with the sender to
send an electronic transfer of funds to the
foreign merchant when the institution provides payment to the merchant. See comment 30(e)–2.
30(f) Remittance Transfer Provider
1. Agents. A person is not deemed to be acting as a remittance transfer provider when it
performs activities as an agent on behalf of
a remittance transfer provider.
2. Normal course of business. i. General.
Whether a person provides remittance transfers in the normal course of business depends
on the facts and circumstances, including
the total number and frequency of remittance transfers sent by the provider. For example, if a financial institution generally
does not make remittance transfers available to customers, but sends a couple of such
transfers in a given year as an accommodation for a customer, the institution does not
provide remittance transfers in the normal
course of business. In contrast, if a financial
institution makes remittance transfers generally available to customers (whether described in the institution’s deposit account
agreement, or in practice) and makes transfers many times per month, the institution
provides remittance transfers in the normal
course of business.
ii. Safe harbor. Under § 1005.30(f)(2)(i), a person that provided 100 or fewer remittance
transfers in the previous calendar year and
provides 100 or fewer remittance transfers in
the current calendar year is deemed not to
be providing remittance transfers in the normal course of its business. Accordingly, a
person that qualifies for the safe harbor in
§ 1005.30(f)(2)(i) is not a ‘‘remittance transfer
provider’’ and is not subject to the requirements of subpart B. For purposes of determining whether a person qualifies for the
safe harbor under § 1005.30(f)(2)(i), the number
of remittance transfers provided includes
any transfers excluded from the definition of

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‘‘remittance transfer’’ due simply to the safe
harbor. In contrast, the number of remittance transfers provided does not include
any transfers that are excluded from the definition of ‘‘remittance transfer’’ for reasons
other than the safe harbor, such as small
value transactions or securities and commodities transfers that are excluded from
the definition of ‘‘remittance transfer’’ by
§ 1005.30(e)(2).
iii. Transition period. A person may cease to
satisfy the requirements of the safe harbor
described in § 1005.30(f)(2)(i) if the person provides in excess of 100 remittance transfers in
a calendar year. For example, if a person
that provided 100 or fewer remittance transfers in the previous calendar year provides
more than 100 remittance transfers in the
current calendar year, the safe harbor applies to the first 100 remittance transfers
that the person provides in the current calendar year. For any additional remittance
transfers provided in the current calendar
year and for any remittance transfers provided in the subsequent calendar year,
whether the person provides remittance
transfers for a consumer in the normal
course of its business, as defined in
§ 1005.30(f)(1), and is thus a remittance transfer provider for those additional transfers,
depends on the facts and circumstances. Section 1005.30(f)(2)(ii) provides a reasonable period of time, not to exceed six months, for
such a person to begin complying with subpart B, if that person is then providing remittance transfers in the normal course of
its business. At the end of that reasonable
period of time, such person would be required
to comply with subpart B unless, based on
the facts and circumstances, the person is
not a remittance transfer provider.
iv. Example of safe harbor and transition period. Assume that a person provided 90 remittance transfers in 2012 and 90 such transfers
in 2013. The safe harbor will apply to the person’s transfers in 2013, as well as the person’s
first 100 remittance transfers in 2014. However, if the person provides a 101st transfer
on September 5, the facts and circumstances
determine whether the person provides remittance transfers in the normal course of
business and is thus a remittance transfer
provider for the 101st and any subsequent remittance transfers that it provides in 2014.
Furthermore, the person would not qualify
for
the
safe
harbor
described
in
§ 1005.30(f)(2)(i) in 2015 because the person did
not provide 100 or fewer remittance transfers
in 2014. However, for the 101st remittance
transfer provided in 2014, as well as additional remittance transfers provided thereafter in 2014 and 2015, if that person is then
providing remittance transfers for a consumer in the normal course of business, the
person will have a reasonable period of time,
not to exceed six months, to come into compliance with subpart B. Assume that in this

case, a reasonable period of time is six
months. Thus, compliance with subpart B is
not required for remittance transfers made
on or before March 5, 2015 (i.e., six months
after September 5, 2014). After March 5, 2015,
the person is required to comply with subpart B if, based on the facts and circumstances, the person provides remittance
transfers in the normal course of business
and is thus a remittance transfer provider.
3. Multiple remittance transfer providers. If
the remittance transfer involves more than
one remittance transfer provider, only one
set of disclosures must be given, and the remittance transfer providers must agree
among themselves which provider must take
the actions necessary to comply with the requirements that subpart B imposes on any or
all of them. Even though the providers must
designate one provider to take the actions
necessary to comply with the requirements
that subpart B imposes on any or all of
them, all remittance transfer providers involved in the remittance transfer remain responsible for compliance with the applicable
provisions of the EFTA and Regulation E.
30(g) Sender
1. Determining whether a consumer is located
in a State. Under § 1005.30(g), the definition of
‘‘sender’’ means a consumer in a State who,
primarily for personal, family, or household
purposes, requests a remittance transfer provider to send a remittance transfer to a designated recipient. A sender located on a U.S.
military installation that is physically located in a foreign country is located in a
State. For transfers from a consumer’s account, whether a consumer is located in a
State depends on where the consumer’s account is located. If the account is located in
a State, the consumer will be located in a
State for purposes of the definition of ‘‘sender’’ in § 1005.30(g), notwithstanding comment
3(a)–3. Accounts that are located on a U.S.
military installation that is physically located in a foreign country are located in a
State. Where a transfer is requested electronically or by telephone and the transfer is
not from an account, the provider may make
the determination of whether a consumer is
located in a State based on information that
is provided by the consumer and on any
records associated with the consumer that
the provider may have, such as an address
provided by the consumer.
2. Personal, family, or household purposes.
Under § 1005.30(g), a consumer is a ‘‘sender’’
only where he or she requests a transfer primarily for personal, family, or household
purposes. A consumer who requests a transfer primarily for other purposes, such as
business or commercial purposes, is not a
sender under § 1005.30(g). For transfers from
an account that was established primarily
for personal, family, or household purposes,

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a remittance transfer provider may generally deem that the transfer is requested
primarily for personal, family, or household
purposes and the consumer is therefore a
‘‘sender’’ under § 1005.30(g). But if the consumer indicates that he or she is requesting
the transfer primarily for other purposes,
such as business or commercial purposes,
then the consumer is not a sender under
§ 1005.30(g), even if the consumer is requesting the transfer from an account that is used
primarily for personal, family, or household
purposes.
3. Non-consumer accounts. A provider may
deem that a transfer that is requested to be
sent from an account that was not established primarily for personal, family, or
household purposes, such as an account that
was established as a business or commercial
account or an account held by a business entity such as a corporation, not-for-profit corporation, professional corporation, limited
liability company, partnership, or sole proprietorship, as not being requested primarily
for personal, family, or household purposes.
A consumer requesting a transfer from such
an account therefore is not a sender under
§ 1005.30(g). Additionally, a transfer that is
requested to be sent from an account held by
a financial institution under a bona fide trust
agreement pursuant to § 1005.2(b)(3) is not requested primarily for personal, family, or
household purposes, and a consumer requesting a transfer from such an account is therefore not a sender under § 1005.30(g).

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30(h) Third-Party Fees
1. Fees imposed on the remittance transfer.
Fees imposed on the remittance transfer by
a person other than the remittance transfer
provider include only those fees that are
charged to the designated recipient and are
specifically related to the remittance transfer. For example, overdraft fees that are imposed by a recipient’s bank or funds that are
garnished from the proceeds of a remittance
transfer to satisfy an unrelated debt are not
fees imposed on the remittance transfer because these charges are not specifically related to the remittance transfer. Account
fees are also not specifically related to a remittance transfer if such fees are merely assessed based on general account activity and
not for receiving transfers. Where an incoming remittance transfer results in a balance
increase that triggers a monthly maintenance fee, that fee is not specifically related
to a remittance transfer. Similarly, fees that
banks charge one another for handling a remittance transfer or other fees that do not
affect the total amount of the transaction or
the amount that will be received by the designated recipient are not fees imposed on the
remittance transfer. For example, an interchange fee that is charged to a provider
when a sender uses a credit or debit card to

pay for a remittance transfer is not a fee imposed upon the remittance transfer. Fees
that specifically relate to a remittance
transfer may be structured on a flat pertransaction basis, or may be conditioned on
other factors (such as account status or the
quantity of remittance transfers received) in
addition to the remittance transfer itself.
For example, where an institution charges
an incoming transfer fee on most customers’
accounts, but not on preferred accounts,
such a fee is nonetheless specifically related
to a remittance transfer. Similarly, if the institution assesses a fee for every transfer beyond the fifth received each month, such a
fee would be specifically related to the remittance transfer regardless of how many remittance transfers preceded it that month.
2. Covered third-party fees. i. Under
§ 1005.30(h)(1), a covered third-party fee
means any fee that is imposed on the remittance transfer by a person other than the remittance transfer provider that is not a noncovered third-party fee.
ii. Examples of covered third-party fees include:
A. Fees imposed on a remittance transfer
by intermediary institutions in connection
with a wire transfer (sometimes referred to
as ‘‘lifting fees’’).
B. Fees imposed on a remittance transfer
by an agent of the provider at pick-up for receiving the transfer.
3. Non-covered third-party fees. Under
§ 1005.30(h)(2), a non-covered third-party fee
means any fee imposed by the designated recipient’s institution for receiving a remittance transfer into an account except if such
institution acts as the agent of the remittance transfer provider. For example, a fee
imposed by the designated recipient’s institution for receiving an incoming transfer
into an account is a non-covered third-party
fee, provided such institution is not acting
as the agent of the remittance transfer provider. See also comment 31(b)(1)(viii)–1. Furthermore, designated recipient’s account in
§ 1005.30(h)(2) refers to an asset account, regardless of whether it is a consumer asset account, established for any purpose and held
by a bank, savings association, credit union,
or equivalent institution. A designated recipient’s account does not, however, include
a credit card, prepaid card, or a virtual account held by an Internet-based or mobile
telephone company that is not a bank, savings association, credit union or equivalent
institution.
SECTION 1005.31—DISCLOSURES
31(a) General Form of Disclosures
31(a)(1) Clear and Conspicuous
1. Clear and conspicuous standard. Disclosures are clear and conspicuous for purposes

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of subpart B if they are readily understandable and, in the case of written and electronic disclosures, the location and type size
are readily noticeable to senders. Oral disclosures as permitted by § 1005.31(a)(3), (4),
and (5) are clear and conspicuous when they
are given at a volume and speed sufficient
for a sender to hear and comprehend them.
2. Abbreviations and symbols. Disclosures
may contain commonly accepted or readily
understandable abbreviations or symbols,
such as ‘‘USD’’ to indicate currency in U.S.
dollars or ‘‘MXN’’ to indicate currency in
Mexican pesos.

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31(a)(2) Written and Electronic Disclosures
1. E–Sign Act requirements. If a sender electronically requests the remittance transfer
provider to send a remittance transfer, the
disclosures required by § 1005.31(b)(1) may be
provided to the sender in electronic form
without regard to the consumer consent and
other applicable provisions of the Electronic
Signatures in Global and National Commerce Act (E–Sign Act) (15 U.S.C. 7001 et
seq.). If a sender electronically requests the
provider to send a remittance transfer, the
disclosures required by § 1005.31(b)(2) may be
provided to the sender in electronic form,
subject to compliance with the consumer
consent and other applicable provisions of
the E–Sign Act. See § 1005.4(a)(1).
2. Paper size. Written disclosures may be
provided on any size paper, as long as the
disclosures are clear and conspicuous. For
example, disclosures may be provided on a
register receipt or on an 8.5 inch by 11 inch
sheet of paper.
3. Retainable electronic disclosures. A remittance transfer provider may satisfy the requirement to provide electronic disclosures
in a retainable form if it provides an online
disclosure in a format that is capable of
being printed. Electronic disclosures may
not be provided through a hyperlink or in
another manner by which the sender can bypass the disclosure. A provider is not required to confirm that the sender has read
the electronic disclosures.
4. Pre-payment disclosures to a mobile telephone. Disclosures provided via mobile application or text message, to the extent permitted by § 1005.31(a)(5), need not be
retainable. However, disclosures provided
electronically to a mobile telephone that are
not provided via mobile application or text
message must be retainable. For example,
disclosures provided via email must be
retainable, even if a sender accesses them by
mobile telephone.
5. Disclosures provided by fax. For purposes
of disclosures required to be provided pursuant to § 1005.31 or § 1005.36, disclosures provided by facsimile transmission (i.e., fax) are
considered to be provided in writing for purposes of providing disclosures in writing pursuant to subpart B and are not subject to the

requirements for electronic disclosures set
forth in § 1005.31(a)(2).
31(a)(3) Disclosures for Oral Telephone
Transactions
1. Transactions conducted partially by telephone. Except as provided in comment
31(a)(3)–2, for transactions conducted partially by telephone, providing the information required by § 1005.31(b)(1) to a sender
orally does not fulfill the requirement to
provide
the
disclosures
required
by
§ 1005.31(b)(1). For example, a sender may
begin a remittance transfer at a remittance
transfer provider’s dedicated telephone in a
retail store, and then provide payment in
person to a store clerk to complete the
transaction. In such cases, all disclosures
must be provided in writing. A provider complies with this requirement, for example, by
providing the written pre-payment disclosure in person prior to the sender’s payment
for the transaction, and the written receipt
when the sender pays for the transaction.
2. Oral telephone transactions. Section
1005.31(a)(3) applies to transactions conducted orally and entirely by telephone, such
as transactions conducted orally on a
landline or mobile telephone. A remittance
transfer provider may treat a written or
electronic communication as an inquiry
when it believes that treating the communication as a request would be impractical.
For example, if a sender physically located
abroad contacts a U.S. branch of the sender’s
financial institution and attempts to initiate
a remittance transfer by first sending a
mailed letter, further communication with
the sender by letter may be impractical due
to the physical distance and likely mail
delays. In such circumstances, a provider
may conduct the transaction orally and entirely by telephone pursuant to § 1005.31(a)(3)
when the provider treats that initial communication as an inquiry and subsequently responds to the consumer’s inquiry by calling
the consumer on a telephone and orally
gathering or confirming the information
needed to identify and understand a request
for a remittance transfer and otherwise conducts the transaction orally and entirely by
telephone.
31(a)(5) Disclosures for Mobile Application or
Text Message Transactions
1. Mobile application and text message transactions. A remittance transfer provider may
provide the required pre-payment disclosures
orally or via mobile application or text message if the transaction is conducted entirely
by telephone via mobile application or text
message, the remittance transfer provider
complies
with
the
requirements
of
§ 1005.31(g)(2), and the provider discloses orally or via mobile application or text message
a statement about the rights of the sender

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regarding
cancellation
required
by
§ 1005.31(b)(2)(iv) pursuant to the timing requirements in § 1005.31(e)(1). For example, if a
sender conducts a transaction via text message on a mobile telephone, the remittance
transfer provider may call the sender and
orally provide the required pre-payment disclosures. Alternatively, the provider may
provide the required pre-payment disclosures
via text message. Section 1005.31(a)(5) applies
only to transactions conducted entirely by
mobile telephone via mobile application or
text message.

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31(b) Disclosure Requirements
1. Disclosures provided as applicable. Disclosures required by § 1005.31(b) need only be
provided to the extent applicable. A remittance transfer provider may choose to omit
an item of information required by
§ 1005.31(b) if it is inapplicable to a particular
transaction. Alternatively, for disclosures
required by § 1005.31(b)(1)(i) through (vii), a
provider may disclose a term and state that
an amount or item is ‘‘not applicable,’’ ‘‘N/
A,’’ or ‘‘None.’’ For example, if fees or taxes
are not imposed in connection with a particular transaction, the provider need not
provide the disclosures about fees and taxes
generally required by § 1005.31(b)(1)(ii), the
disclosures about covered third-party fees
generally required by § 1005.31(b)(1)(vi), or the
disclaimers about non-covered third-party
fees and taxes collected by a person other
than the provider generally required by
§ 1005.31(b)(1)(viii). Similarly, a Web site need
not be disclosed if the provider does not
maintain a Web site. A provider need not
provide the exchange rate disclosure required by § 1005.31(b)(1)(iv) if a recipient receives funds in the currency in which the remittance transfer is funded, or if funds are
delivered into an account denominated in
the currency in which the remittance transfer is funded. For example, if a sender in the
United States sends funds from an account
denominated in Euros to an account in
France denominated in Euros, no exchange
rate would need to be provided. Similarly, if
a sender funds a remittance transfer in U.S.
dollars and requests that a remittance transfer be delivered to the recipient in U.S. dollars, a provider need not disclose an exchange rate.
2. Substantially similar terms, language, and
notices. Certain disclosures required by
§ 1005.31(b) must be described using the terms
set forth in § 1005.31(b) or substantially similar terms. Terms may be more specific than
those provided. For example, a remittance
transfer provider sending funds may describe
fees imposed by an agent at pick-up as
‘‘Pick-up Fees’’ in lieu of describing them as
‘‘Other Fees.’’ Foreign language disclosures
required under § 1005.31(g) must contain accurate translations of the terms, language, and

notices required by § 1005.31(b) or permitted
by § 1005.31(b)(1)(viii) and § 1005.33(h)(3).
31(b)(1) Pre-Payment Disclosures
1. Fees and taxes. i. Taxes collected on the
remittance transfer by the remittance transfer provider include taxes collected on the
remittance transfer by a State or other governmental body. A provider need only disclose fees imposed or taxes collected on the
remittance transfer by the provider in
§ 1005.31(b)(1)(ii), as applicable. For example,
if no transfer taxes are imposed on a remittance transfer, a provider would only disclose applicable transfer fees. See comment
31(b)–1. If both fees and taxes are imposed,
the fees and taxes must be disclosed as separate, itemized disclosures. For example, a
provider would disclose all transfer fees
using the term ‘‘Transfer Fees’’ or a substantially similar term and would separately disclose all transfer taxes using the term
‘‘Transfer Taxes’’ or a substantially similar
term.
ii. The fees and taxes required to be disclosed by § 1005.31(b)(1)(ii) include all fees imposed and all taxes collected on the remittance transfer by the provider. For example,
a provider must disclose any service fee, any
fees imposed by an agent of the provider at
the time of the transfer, and any State taxes
collected on the remittance transfer at the
time of the transfer. Fees imposed on the remittance transfer by the provider required to
be disclosed under § 1005.31(b)(1)(ii) include
only those fees that are charged to the sender and are specifically related to the remittance transfer. See also comment 30(h)–1. In
contrast, the fees required to be disclosed by
§ 1005.31(b)(1)(vi) are any covered third-party
fees as defined in § 1005.30(h)(1).
iii. The term used to describe the fees imposed on the remittance transfer by the provider in § 1005.31(b)(1)(ii) and the term used to
describe covered third-party fees under
§ 1005.31(b)(1)(vi) must differentiate between
such fees. For example the terms used to describe fees disclosed under § 1005.31(b)(1)(ii)
and (vi) may not both be described solely as
‘‘Fees.’’
2. Transfer amount. Sections 1005.31(b)(1)(i)
and (v) require two transfer amount disclosures. First, under § 1005.31(b)(1)(i), a provider
must disclose the transfer amount in the
currency in which the remittance transfer is
funded to show the calculation of the total
amount of the transaction. Typically, the remittance transfer is funded in U.S. dollars,
so the transfer amount would be expressed in
U.S. dollars. However, if the remittance
transfer is funded, for example, from a Eurodenominated account, the transfer amount
would be expressed in Euros. Second, under
§ 1005.31(b)(1)(v), a provider must disclose the
transfer amount in the currency in which
the funds will be made available to the designated recipient. For example, if the funds

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Bur. of Consumer Financial Protection

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will be picked up by the designated recipient
in Japanese yen, the transfer amount would
be expressed in Japanese yen. However, this
second transfer amount need not be disclosed
if covered third-party fees as described under
§ 1005.31(b)(1)(vi) are not imposed on the remittance transfer. The terms used to describe each transfer amount should be the
same.
3. Exchange rate for calculation. The exchange rate used to calculate the transfer
amount in § 1005.31(b)(1)(v), the covered thirdparty fees in § 1005.31(b)(1)(vi), the amount received in § 1005.31(b)(1)(vii), and the optional
disclosures of non-covered third-party fees
and
other
taxes
permitted
by
§ 1005.31(b)(1)(viii) is the exchange rate in
§ 1005.31(b)(1)(iv), including an estimated exchange rate to the extent permitted by
§ 1005.32, prior to any rounding of the exchange rate. For example, if one U.S. dollar
exchanges for 11.9483779 Mexican pesos, a provider must calculate these disclosures using
this rate, even though the provider may disclose pursuant to § 1005.31(b)(1)(iv) that the
U.S. dollar exchanges for 11.9484 Mexican
pesos. Similarly, if a provider estimates pursuant to § 1005.32 that one U.S. dollar exchanges for 11.9483 Mexican pesos, a provider
must calculate these disclosures using this
rate, even though the provider may disclose
pursuant to § 1005.31(b)(1)(iv) that the U.S.
dollar exchanges for 11.95 Mexican pesos (Estimated). If an exchange rate need not be
rounded, a provider must use that exchange
rate to calculate these disclosures. For example, if one U.S. dollar exchanges for exactly 11.9 Mexican pesos, a provider must
calculate these disclosures using this exchange rate.

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31(b)(1)(iv) Exchange Rate
1. Applicable exchange rate. If the designated recipient will receive funds in a currency other than the currency in which the
remittance transfer is funded, a remittance
transfer provider must disclose the exchange
rate to be used by the provider for the remittance transfer. An exchange rate that is estimated must be disclosed pursuant to the requirements of § 1005.32. A remittance transfer
provider may not disclose, for example, that
an exchange rate is ‘‘unknown,’’ ‘‘floating,’’
or ‘‘to be determined.’’ If a provider does not
have specific knowledge regarding the currency in which the funds will be received, the
provider may rely on a sender’s representation as to the currency in which funds will
be received for purposes of determining
whether an exchange rate is applied to the
transfer. For example, if a sender requests
that a remittance transfer be deposited into
an account in U.S. dollars, the provider need
not disclose an exchange rate, even if the account is actually denominated in Mexican
pesos and the funds are converted prior to

deposit into the account. If a sender does not
know the currency in which funds will be received, the provider may assume that the
currency in which funds will be received is
the currency in which the remittance transfer is funded.
2. Rounding. The exchange rate disclosed
by the provider for the remittance transfer is
required to be rounded. The provider may
round to two, three, or four decimal places,
at its option. For example, if one U.S. dollar
exchanges for 11.9483779 Mexican pesos, a provider may disclose that the U.S. dollar exchanges for 11.9484 Mexican pesos. The provider may alternatively disclose, for example, that the U.S. dollar exchanges for 11.948
pesos or 11.95 pesos. On the other hand, if one
U.S. dollar exchanges for exactly 11.9 Mexican pesos, the provider may disclose that
‘‘US$1 = 11.9 MXN’’ in lieu of, for example,
‘‘US$1 = 11.90 MXN.’’ The exchange rate disclosed for the remittance transfer must be
rounded consistently for each currency. For
example, a provider may not round to two
decimal places for some transactions exchanged into Euros and round to four decimal places for other transactions exchanged
into Euros.
3. Exchange rate used. The exchange rate
used by the provider for the remittance
transfer need not be set by that provider. For
example, an exchange rate set by an intermediary institution and applied to the remittance transfer would be the exchange
rate used for the remittance transfer and
must be disclosed by the provider.
31(b)(1)(vi) Disclosure of Covered Third-Party
Fees
1. Fees disclosed in the currency in which the
funds will be received. Section 1005.31(b)(1)(vi)
requires the disclosure of covered third-party
fees in the currency in which the funds will
be received by the designated recipient. A
covered
third-party
fee
described
in
§ 1005.31(b)(1)(vi) may be imposed in one currency, but the funds may be received by the
designated recipient in another currency. In
such cases, the remittance transfer provider
must calculate the fee to be disclosed under
§ 1005.31(b)(1)(vi) in the currency of receipt
using the exchange rate in § 1005.31(b)(1)(iv),
including an estimated exchange rate to the
extent permitted by § 1005.32, prior to any
rounding of the exchange rate. For example,
an intermediary institution involved in sending an international wire transfer funded in
U.S. dollars may impose a fee in U.S. dollars,
but funds are ultimately deposited in the recipient’s account in Euros. In this case, the
provider would disclose the covered thirdparty fee to the sender expressed in Euros,
calculated using the exchange rate disclosed
under § 1005.31(b)(1)(iv), prior to any rounding
of the exchange rate. For purposes of
§ 1005.31(b)(1)(v), (vi), and (vii), if a provider

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does not have specific knowledge regarding
the currency in which the funds will be received, the provider may rely on a sender’s
representation as to the currency in which
funds will be received. For example, if a
sender requests that a remittance transfer be
deposited into an account in U.S. dollars, the
provider may provide the disclosures required in § 1005.31(b)(1)(v), (vi), and (vii) in
U.S. dollars, even if the account is actually
denominated in Mexican pesos and the funds
are subsequently converted prior to deposit
into the account. If a sender does not know
the currency in which funds will be received,
the provider may assume that the currency
in which funds will be received is the currency in which the remittance transfer is
funded.
31(b)(1)(vii) Amount Received
1. Amount received. The remittance transfer
provider is required to disclose the amount
that will be received by the designated recipient in the currency in which the funds
will be received. The amount received must
reflect the exchange rate, all fees imposed
and all taxes collected on the remittance
transfer by the remittance transfer provider,
as well as any covered third-party fees required to be disclosed by § 1005.31(b)(1)(vi).
The disclosed amount received must be reduced by the amount of any fee or tax—except for a non-covered third-party fee or tax
collected on the remittance transfer by a
person other than the provider—that is imposed on the remittance transfer that affects
the amount received even if that amount is
imposed or itemized separately from the
transaction amount.

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31(b)(1)(viii) Statement When Additional Fees
and Taxes May Apply
1. Required disclaimer when non-covered
third-party fees and taxes collected by a person
other than the provider may apply. If non-covered third-party fees or taxes collected by a
person other than the provider apply to a
particular remittance transfer or if a provider does not know if such fees or taxes may
apply to a particular remittance transfer,
§ 1005.31(b)(1)(viii) requires the provider to include the disclaimer with respect to such
fees and taxes. Required disclosures under
§ 1005.31(b)(1)(viii) may only be provided to
the extent applicable. For example, if the
designated recipient’s institution is an agent
of the provider and thus, non-covered thirdparty fees cannot apply to the transfer, the
provider must disclose all fees imposed on
the remittance transfer and may not provide
the disclaimer regarding non-covered thirdparty fees. In this scenario, the provider may
only provide the disclaimer regarding taxes
collected on the remittance transfer by a
person other than the provider, as applicable. See Model Form A–30(c).

2. Optional disclosure of non-covered thirdparty fees and taxes collected by a person other
than the provider. When a remittance transfer
provider knows the non-covered third-party
fees or taxes collected on the remittance
transfer by a person other than the provider
that will apply to a particular transaction,
§ 1005.31(b)(1)(viii) permits the provider to
disclose the amount of such fees and taxes.
Section 1005.32(b)(3)–1 additionally permits a
provider to disclose an estimate of such fees
and taxes, provided any estimates are based
on reasonable source of information. See
comment 32(b)(3). For example, a provider
may know that the designated recipient’s institution imposes an incoming wire fee for
receiving a transfer. Alternatively, a provider may know that foreign taxes will be
collected on the remittance transfer by a
person other than the remittance transfer
provider. In these examples, the provider
may choose, at its option, to disclose the
amounts of the relevant recipient institution
fee and tax as part of the information disclosed pursuant to § 1005.31(b)(1)(viii). The
provider must not include that fee or tax in
the
amount
disclosed
pursuant
to
§ 1005.31(b)(1)(vi) or (b)(1)(vii). Fees and taxes
disclosed under § 1005.31(b)(1)(viii) must be
disclosed in the currency in which the funds
will be received. See comment 31(b)(1)(vi)–1.
Estimates of any non-covered third-party
fees and any taxes collected on the remittance transfer by a person other than the
provider must be disclosed in accordance
with § 1005.32(b)(3).
31(b)(2) Receipt
1. Date funds will be available. A remittance
transfer provider does not comply with the
requirements of § 1005.31(b)(2)(ii) if it provides a range of dates that the remittance
transfer may be available or an estimate of
the date on which funds will be available. If
a provider does not know the exact date on
which funds will be available, the provider
may disclose the latest date on which the
funds will be available. For example, if funds
may be available on January 3, but are not
certain to be available until January 10, then
a provider complies with § 1005.31(b)(2)(ii) if it
discloses January 10 as the date funds will be
available. However, a remittance transfer
provider may also disclose that funds ‘‘may
be available sooner’’ or use a substantially
similar term to inform senders that funds
may be available to the designated recipient
on a date earlier than the date disclosed. For
example, a provider may disclose ‘‘January
10 (may be available sooner).’’
2. Agencies required to be disclosed. A remittance transfer provider must only disclose
information about a State agency that licenses or charters the remittance transfer
provider with respect to the remittance

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Bur. of Consumer Financial Protection

Pt. 1005, Supp. I

transfer as applicable. For example, if a financial institution is solely regulated by a
Federal agency, and not licensed or chartered by a State agency, then the institution
need not disclose information about a State
agency. A remittance transfer provider must
disclose information about the Consumer Financial Protection Bureau, whether or not
the Consumer Financial Protection Bureau
is the provider’s primary Federal regulator.
3. State agency that licenses or charters a provider. A remittance transfer provider must
only disclose information about one State
agency that licenses or charters the remittance transfer provider with respect to the
remittance transfer, even if other State
agencies also regulate the remittance transfer provider. For example, a provider may
disclose information about the State agency
which granted its license. If a provider is licensed in multiple States, and the State
agency that licenses the provider with respect to the remittance transfer is determined by a sender’s location, a provider may
make the determination as to the State in
which the sender is located based on information that is provided by the sender and on
any records associated with the sender. For
example, if the State agency that licenses
the provider with respect to an online remittance transfer is determined by a sender’s location, a provider could rely on the sender’s
statement regarding the State in which the
sender is located and disclose the State agency that licenses the provider in that State. A
State-chartered bank must disclose information about the State agency that granted its
charter, regardless of the location of the
sender.
4. Web site of the Consumer Financial Protection Bureau. Section 1005.31(b)(2)(vi) requires
a remittance transfer provider to disclose
the name, toll-free telephone number(s), and
Web site of the Consumer Financial Protection Bureau. Providers may satisfy this requirement by disclosing the Web site of the
Consumer Financial Protection Bureau’s
homepage,
www.consumerfinance.gov,
as
shown on Model Forms A–32, A–34, A–35, and
A–39. Alternatively, providers may, but are
not required to, disclose the Bureau’s Web
site as the address of a page on the Bureau’s
Web site that provides information for consumers about remittance transfers, currently, consumerfinance.gov/sending-money, as
shown on Model Form A–31. In addition, providers making disclosures in a language
other than English pursuant to § 1005.31(g)
may, but are not required to, disclose the
Bureau’s Web site as a page on the Bureau’s
Web site that provides information for consumers about remittance transfers in the relevant language, if such Web site exists. For
example, a provider that is making disclosures in Spanish under § 1005.31(g) may, but is
not required to, disclose the Bureau’s Web
site on Spanish-language disclosures as the

page on the Bureau’s Web site that provides
information regarding remittance transfers
in Spanish, currently consumerfinance.gov/
envios. This optional disclosure is shown on
Model A–40. The Bureau will publish a list of
any other foreign language Web sites that
provide information regarding remittance
transfers.
5. Date of transfer on receipt. Where applicable, § 1005.31(b)(2)(vii) requires disclosure of
the date of transfer for the remittance transfer that is the subject of a receipt required
by § 1005.31(b)(2), including a receipt that is
provided in accordance with the timing requirements in § 1005.36(a). For any subsequent preauthorized remittance transfer subject to § 1005.36(d)(2)(ii), the future date of
transfer must be provided on any receipt provided for the initial transfer in that series of
preauthorized remittance transfers, or where
permitted, or disclosed as permitted by
§ 1005.31(a)(3) and (a)(5), in accordance with
§ 1005.36(a)(1)(i).
6. Transfer date disclosures. The following
example demonstrates how the information
required
by
§ 1005.31(b)(2)(vii)
and
§ 1005.36(d)(1) should be disclosed on receipts:
On July 1, a sender instructs the provider to
send a preauthorized remittance transfer of
US$100 each week to a designated recipient.
The sender requests that first transfer in the
series be sent on July 15. On the receipt, the
remittance transfer provider discloses an estimated exchange rate to the sender pursuant to § 1005.32(b)(2). In accordance with
§ 1005.31(b)(2)(vii), the provider should disclose the date of transfer for that particular
transaction (i.e., July 15) on the receipt provided when payment is made for the transfer
pursuant to the timing requirements in
§ 1005.36(a)(1)(i). The second receipt, which
§ 1005.36(a)(1)(ii) requires to be provided within one business day after the date of the
transfer or, for transfers from the sender’s
account held by the provider, on the next
regularly scheduled periodic statement or
within 30 days after payment is made if a
periodic statement is not provided, is also required to include the date of transfer. If the
provider discloses on either receipt the cancellation period applicable to and dates of
subsequent preauthorized remittance transfers in accordance with § 1005.36(d)(2), the disclosure must be phrased and formatted in
such a way that it is clear to the sender
which cancellation period is applicable to
any date of transfer on the receipt.
7. Cancellation disclosure. Remittance transfer providers that offer remittance transfers
scheduled three or more business days before
the date of the transfer, as well as remittance transfers scheduled fewer than three
business days before the date of the transfer,
may meet the cancellation disclosure requirements in § 1005.31(b)(2)(iv) by describing
the three-business-day and 30-minute cancellation periods on the same disclosure and

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using a checkbox or other method to clearly
designate the applicable cancellation period.
The provider may use a number of methods
to indicate which cancellation period applies
to the transaction including, but not limited
to, a statement to that effect, use of a
checkbox, highlighting, circling, and the
like. For transfers scheduled three business
days before the date of the transfer, the cancellation disclosures provided pursuant to
§ 1005.31(b)(2)(iv) should be phrased and formatted in such a way that it is clear to the
sender which cancellation period is applicable to the date of transfer disclosed on the
receipt.

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31(b)(3) Combined Disclosure
1. Proof of payment. If a sender initiating a
remittance transfer receives a combined disclosure provided under § 1005.31(b)(3) and then
completes the transaction, the remittance
transfer provider must provide the sender
with proof of payment. The proof of payment
must be clear and conspicuous, provided in
writing or electronically, and provided in a
retainable form. The combined disclosure
must be provided to the sender when the
sender requests the remittance transfer, but
prior to payment for the transfer, pursuant
to § 1005.31(e)(1), and the proof of payment
must be provided when payment is made for
the remittance transfer. The proof of payment for the transaction may be provided on
the same piece of paper as the combined disclosure or on a separate piece of paper. For
example, a provider may feed a combined
disclosure through a computer printer when
payment is made to add the date and time of
the transaction, a confirmation code, and an
indication that the transfer was paid in full.
A provider may also provide this additional
information to a sender on a separate piece
of paper when payment is made. A remittance transfer provider does not comply with
the requirements of § 1005.31(b)(3) by providing a combined disclosure with no further
indication that payment has been received.
2. Confirmation of scheduling. As discussed
in comment 31(e)–2, payment is considered to
be made when payment is authorized for purposes of various timing requirements in subpart B, including with regard to the timing
requirement for provision of the proof of
payment described in § 1005.31(b)(3)(i). However, where a transfer (whether a one-time
remittance transfer or the first in a series of
preauthorized remittance transfers) is scheduled before the date of transfer and the provider does not intend to process payment
until at or near the date of transfer, the provider may provide a confirmation of scheduling in lieu of the proof of payment required
by § 1005.31(b)(3)(i). No further proof of payment is required when payment is later processed.

31(c) Specific Format Requirements
31(c)(1) Grouping
1. Grouping. Information is grouped together for purposes of subpart B if multiple
disclosures are in close proximity to one another and a sender can reasonably calculate
the total amount of the transaction and the
amount that will be received by the designated recipient. Model Forms A–30(a)–(d)
through A–35 in Appendix A illustrate how
information may be grouped to comply with
the rule, but a remittance transfer provider
may group the information in another manner. For example, a provider could provide
the grouped information as a horizontal,
rather than a vertical, calculation. A provider could also send multiple text messages
sequentially to provide the full disclosure.
31(c)(4) Segregation
1. Segregation. Disclosures may be segregated from other information in a variety
of ways. For example, the disclosures may
appear on a separate sheet of paper or may
appear on the front of a page where other information appears on the back of that page.
The disclosures may be set off from other information on a notice by outlining them in a
box or series of boxes, with bold print dividing lines or a different color background, or
by using other means.
2. Directly related. For purposes of
§ 1005.31(c)(4), the following is directly related information:
i. The date and time of the transaction;
ii. The sender’s name and contact information;
iii. The location at which the designated
recipient may pick up the funds;
iv. The confirmation or other identification code;
v. A company name and logo;
vi. An indication that a disclosure is or is
not a receipt or other indicia of proof of payment;
vii. A designated area for signatures or initials;
viii. A statement that funds may be available sooner, as permitted by § 1005.31(b)(2)(ii);
ix. Instructions regarding the retrieval of
funds, such as the number of days the funds
will be available to the recipient before they
are returned to the sender; and
x. A statement that the provider makes
money from foreign currency exchange.
xi. Disclosure of any non-covered thirdparty fees and any taxes collected by a person other than the provider pursuant to
§ 1005.31(b)(1)(viii).
31(d) Estimates
1. Terms. A remittance transfer provider
may provide estimates of the amounts required by § 1005.31(b), to the extent permitted
by § 1005.32. An estimate must be described

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Bur. of Consumer Financial Protection

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using the term ‘‘Estimated’’ or a substantially similar term in close proximity to the
term or terms described. For example, a remittance transfer provider could describe an
estimated disclosure as ‘‘Estimated Transfer
Amount,’’ ‘‘Other Estimated Fees and
Taxes,’’ or ‘‘Total to Recipient (Est.).’’

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31(e) Timing
1. Request to send a remittance transfer. Except as provided in § 1005.36(a), pre-payment
and combined disclosures are required to be
provided to the sender when the sender requests the remittance transfer, but prior to
payment for the transfer. Whether a consumer has requested a remittance transfer
depends on the facts and circumstances. A
sender that asks a provider to send a remittance transfer, and provides transaction-specific information to the provider in order to
send funds to a designated recipient, has requested a remittance transfer. A sender that
has sent an email, fax, mailed letter, or similar written or electronic communication has
not requested a remittance transfer if the
provider believes that it is impractical for
the provider to treat that communication as
a request and if the provider treats the communication as an inquiry and subsequently
responds to that inquiry by calling the consumer on a telephone and orally gathering or
confirming the information needed to process a request for a remittance transfer. See
comment 31(a)(3)–2. Likewise, a consumer
who solely inquires about that day’s rates
and fees to send to Mexico has not requested
the provider to send a remittance transfer.
Conversely, a sender who asks the provider
at an agent location to send money to a recipient in Mexico and provides the sender
and recipient information to the provider
has requested a remittance transfer.
2. When payment is made. Except as provided in § 1005.36(a), a receipt required by
§ 1005.31(b)(2) must be provided to the sender
when payment is made for the remittance
transfer. For example, a remittance transfer
provider could give the sender the disclosures after the sender pays for the remittance transfer, but before the sender leaves
the counter. A provider could also give the
sender the disclosures immediately before
the sender pays for the transaction. For purposes of subpart B, payment is made, for example, when a sender provides cash to the remittance transfer provider or when payment
is authorized.
3. Telephone transfer from an account. A
sender may transfer funds from his or her account, as defined by § 1005.2(b), that is held
by the remittance transfer provider. For example, a financial institution may send an
international wire transfer for a sender using
funds from the sender’s account with the institution. Except as provided in § 1005.36(a), if
the sender conducts such a transfer entirely

by telephone, the institution may provide a
receipt required by § 1005.31(b)(2) on or with
the sender’s next regularly scheduled periodic statement for that account or within 30
days after payment is made for the remittance transfer if a periodic statement is not
provided.
4. Mobile application and text message transactions. If a transaction is conducted entirely
by telephone via mobile application or text
message, a receipt required by § 1005.31(b)(2)
may be mailed or delivered to the sender
pursuant to the timing requirements in
§ 1005.31(e)(2). For example, if a sender conducts a transfer entirely by telephone via
mobile application, a remittance transfer
provider may mail or deliver the disclosures
to a sender pursuant to the timing requirements in § 1005.31(e)(2).
5. Statement about cancellation rights. The
statement about the rights of the sender regarding
cancellation
required
by
§ 1005.31(b)(2)(iv) may, but need not, be disclosed pursuant to the timing requirements
of § 1005.31(e)(2) if a provider discloses this information pursuant to § 1005.31(a)(3)(iii) or
(a)(5)(iii). The statement about the rights of
the sender regarding error resolution required by § 1005.31(b)(2)(iv), however, must be
disclosed pursuant to the timing requirements of § 1005.31(e)(2).
31(f) Accurate When Payment Is Made
1. No guarantee of disclosures provided before
payment. Except as provided in § 1005.36(b),
disclosures required by § 1005.31(b) or permitted by § 1005.31(b)(1)(viii) must be accurate when a sender makes payment for the
remittance transfer. A remittance transfer
provider is not required to guarantee the
terms of the remittance transfer in the disclosures required or permitted by § 1005.31(b)
for any specific period of time. However, if
any of the disclosures required by § 1005.31(b)
or permitted by § 1005.31(b)(1)(viii) are not accurate when a sender makes payment for the
remittance transfer, a provider must give
new disclosures before accepting payment.
31(g) Foreign Language Disclosures
1. Number of foreign languages used in written disclosure. Section 1005.31(g)(1) does not
limit the number of languages that may be
used on a single document, but such disclosures must be clear and conspicuous pursuant to § 1005.31(a)(1). Under § 1005.31(g)(1), a
remittance transfer provider may, but need
not, provide the sender with a written or
electronic disclosure that is in English and,
if applicable, in each foreign language that
the remittance transfer provider principally
uses to advertise, solicit, or market either
orally, in writing, or electronically, at the
office in which a sender conducts a transaction or asserts an error, respectively. Alternatively, the remittance transfer provider

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may provide the disclosure solely in English
and, if applicable, the foreign language primarily used by the sender with the remittance transfer provider to conduct the transaction or assert an error, provided such language is principally used by the remittance
transfer provider to advertise, solicit, or
market either orally, in writing, or electronically, at the office in which the sender
conducts the transaction or asserts the
error, respectively. If the remittance transfer provider chooses the alternative method,
it may provide disclosures in a single document with both languages or in two separate
documents with one document in English
and the other document in the applicable
foreign language. The following examples illustrate this concept.
i. A remittance transfer provider principally uses only Spanish and Vietnamese to
advertise, solicit, or market remittance
transfer services at a particular office. The
remittance transfer provider may provide all
senders with disclosures in English, Spanish,
and Vietnamese, regardless of the language
the sender uses with the remittance transfer
provider to conduct the transaction or assert
an error.
ii. Same facts as i. If a sender primarily
uses Spanish with the remittance transfer
provider to conduct a transaction or assert
an error, the remittance transfer provider
may provide a written or electronic disclosure in English and Spanish, whether in a
single document or two separate documents.
If the sender primarily uses English with the
remittance transfer provider to conduct the
transaction or assert an error, the remittance transfer provider may provide a written or electronic disclosure solely in
English. If the sender primarily uses a foreign language with the remittance transfer
provider to conduct the transaction or assert
an error that the remittance transfer provider does not use to advertise, solicit, or
market either orally, in writing, or electronically, at the office in which the sender
conducts the transaction or asserts the
error, respectively, the remittance transfer
provider may provide a written or electronic
disclosure solely in English.
2. Primarily used. The language primarily
used by the sender with the remittance
transfer provider to conduct the transaction
is the primary language used by the sender
with the remittance transfer provider to convey the information necessary to complete
the transaction. Similarly, the language primarily used by the sender with the remittance transfer provider to assert the error is
the primary language used by the sender
with the remittance transfer provider to provide the information required by § 1005.33(b)
to assert an error. For example:
i. A sender initiates a conversation with a
remittance transfer provider with a greeting
in English and expresses interest in sending

a remittance transfer to Mexico in English.
If the remittance transfer provider thereafter communicates with the sender in Spanish and the sender conveys the other information needed to complete the transaction,
including the designated recipient’s information and the amount and funding source of
the transfer, in Spanish, then Spanish is the
language primarily used by the sender with
the remittance transfer provider to conduct
the transaction.
ii. A sender initiates a conversation with
the remittance transfer provider with a
greeting in English and states in English
that there was a problem with a prior remittance transfer to Vietnam. If the remittance
transfer provider thereafter communicates
with the sender in Vietnamese and the sender uses Vietnamese to convey the information required by § 1005.33(b) to assert an
error, then Vietnamese is the language primarily used by the sender with the remittance transfer provider to assert the error.
iii. A sender accesses the Web site of a remittance transfer provider that may be used
by senders to conduct remittance transfers
or assert errors. The Web site is offered in
English and French. If the sender uses the
French version of the Web site to conduct
the remittance transfer, then French is the
language primarily used by the sender with
the remittance transfer provider to conduct
the transaction.
31(g)(1) General
1. Principally used. i. All relevant facts and
circumstances determine whether a foreign
language is principally used by the remittance transfer provider to advertise, solicit,
or market under § 1005.31(g)(1). Generally,
whether a foreign language is considered to
be principally used by the remittance transfer provider to advertise, solicit, or market
is based on:
A. The frequency with which the foreign
language is used in advertising, soliciting, or
marketing of remittance transfer services at
that office;
B. The prominence of the advertising, soliciting, or marketing of remittance transfer
services in that foreign language at that office; and
C. The specific foreign language terms used
in the advertising soliciting, or marketing of
remittance transfer service at that office.
ii. For example, if a remittance transfer
provider posts several prominent advertisements in a foreign language for remittance
transfer services, including rate and fee information, on a consistent basis in an office,
the provider is creating an expectation that
a consumer could receive information on remittance transfer services in the foreign language used in the advertisements. The foreign language used in such advertisements
would be considered to be principally used at

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that office based on the frequency and prominence of the advertising. In contrast, an advertisement for remittance transfer services,
including rate and fee information, that is
featured prominently at an office and is entirely in English, except for a greeting in a
foreign language, does not create an expectation that a consumer could receive information on remittance transfer services in the
foreign language used for such greeting. The
foreign language used in such an advertisement is not considered to be principally used
at that office based on the incidental specific
foreign language term used.
2. Advertise, solicit, or market. i. Any commercial message in a foreign language, appearing in any medium, that promotes directly or indirectly the availability of remittance transfer services constitutes advertising, soliciting, or marketing in such foreign language for purposes of § 1005.31(g)(1).
Examples illustrating when a foreign language is used to advertise, solicit, or market
include:
A. Messages in a foreign language in a leaflet or promotional flyer at an office.
B. Announcements in a foreign language
on a public address system at an office.
C. On-line messages in a foreign language,
such as on the internet.
D. Printed material in a foreign language
on any exterior or interior sign at an office.
E. Point-of-sale displays in a foreign language at an office.
F. Telephone solicitations in a foreign language.
ii. Examples illustrating use of a foreign
language for purposes other than to advertise, solicit, or market include:
A. Communicating in a foreign language
(whether by telephone, electronically, or
otherwise) about remittance transfer services in response to a consumer-initiated inquiry.
B. Making disclosures in a foreign language that are required by Federal or other
applicable law.
3. Office. An office includes any physical location, telephone number, or Web site of a
remittance transfer provider where a sender
may conduct a remittance transfer or assert
an error for a remittance transfer. The location need not exclusively offer remittance
transfer services. For example, if an agent of
a remittance transfer provider is located in a
grocery store, the grocery store is considered
an office for purposes of § 1005.31(g)(1). Because a consumer must be located in a State
in order to be considered a ‘‘sender’’ under
§ 1005.30(g), a Web site is not an office for purposes of § 1005.31(g)(1), even if the Web site
can be accessed by consumers that are located in the United States, unless a sender
may conduct a remittance transfer on the
Web site or may assert an error for a remittance transfer on the Web site.

4. At the office. Any advertisement, solicitation, or marketing is considered to be
made at the office in which a sender conducts a transaction or asserts an error if
such advertisement, solicitation, or marketing is posted, provided, or made: at a
physical office of a remittance transfer provider; on a Web site of a remittance transfer
provider that may be used by senders to conduct remittance transfers or assert errors;
during a telephone call with a remittance
transfer provider that may be used by senders to conduct remittance transfers or assert
errors; or via mobile application or text message by a remittance transfer provider if the
mobile application or text message may be
used by senders to conduct remittance transfers or assert errors. An advertisement, solicitation, or marketing that is considered to
be made at an office does not include general
advertisements, solicitations, or marketing
that are not intended to be made at a particular office. For example, if an advertisement for remittance transfers in Chinese appears in a Chinese newspaper that is being
distributed at a grocery store in which the
agent of a remittance transfer provider is located, such advertisement would not be considered to be made at that office. For disclosures provided pursuant to § 1005.31, the relevant office is the office in which the sender
conducts the transaction. For disclosures
provided pursuant to § 1005.33 for error resolution purposes, the relevant office is the office in which the sender first asserts the
error, not the office where the transaction
was conducted.
SECTION 1005.32—ESTIMATES
1. Disclosures where estimates can be used.
Sections 1005.32(a) and (b)(1) permit estimates to be used in certain circumstances
for disclosures described in §§ 1005.31(b)(1)
through (3) and 1005.36(a)(1) and(2). To the extent permitted in § 1005.32(a) and (b)(1), estimates may be used in the pre-payment disclosure described in § 1005.31(b)(1), the receipt
disclosure described in § 1005.31(b)(2), the
combined
disclosure
described
in
§ 1005.31(b)(3), and the pre-payment disclosures and receipt disclosures for both first
and subsequent preauthorized remittance
transfers described in § 1005.36(a)(1) and (a)(2).
Section 1005.32(b)(2) permits estimates to be
used for certain information if the remittance transfer is scheduled by a sender five
or more business days before the date of the
transfer,
for
disclosures
described
in
§ 1005.36(a)(1)(i) and (a)(2)(i).
32(a) Temporary Exception for Insured
Institutions
32(a)(1) General
1. Control. For purposes of this section, an
insured institution cannot determine exact

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amounts ‘‘for reasons beyond its control’’
when a person other than the insured institution or with which the insured institution
has no correspondent relationship sets the
exchange rate required to be disclosed under
§ 1005.31(b)(1)(iv) or imposes a covered thirdparty fee required to be disclosed under
§ 1005.31(b)(1)(vi). For example, if an insured
institution has a correspondent relationship
with an intermediary financial institution in
another country and that intermediary institution sets the exchange rate or imposes a
fee for remittance transfers sent from the insured institution to the intermediary institution, then the insured institution must determine exact amounts for the disclosures
required under § 1005.31(b)(1)(iv) or (vi), because the determination of those amounts
are not beyond the insured institution’s control.
2. Examples of scenarios that qualify for the
temporary exception. The following examples
illustrate when an insured institution cannot determine an exact amount ‘‘for reasons
beyond its control’’ and thus would qualify
for the temporary exception.
i. Exchange rate. An insured institution
cannot determine the exact exchange rate to
disclose under § 1005.31(b)(1)(iv) for an international wire transfer if the insured institution does not set the exchange rate, and the
rate is set when the funds are deposited into
the recipient’s account by the designated recipient’s institution with which the insured
institution does not have a correspondent relationship. The insured institution will not
know the exchange rate that the recipient
institution will apply when the funds are deposited into the recipient’s account.
ii. Covered third-party fees. An insured institution cannot determine the exact covered
third-party
fees
to
disclose
under
§ 1005.31(b)(1)(vi) if an intermediary institution with which the insured institution does
not have a correspondent relationship, imposes a transfer or conversion fee.
3. Examples of scenarios that do not qualify
for the temporary exception. The following examples illustrate when an insured institution can determine exact amounts and thus
would not qualify for the temporary exception.
i. Exchange rate. An insured institution can
determine the exact exchange rate required
to be disclosed under § 1005.31(b)(1)(iv) if it
converts the funds into the local currency to
be received by the designated recipient using
an exchange rate that it sets. The determination of the exchange rate is in the insured institution’s control even if there is no
correspondent relationship with an intermediary institution in the transmittal route
or the designated recipient’s institution.
ii. Covered third-party fees. An insured institution can determine the exact covered
third-party fees required to be disclosed
under § 1005.31(b)(1)(vi) if it has agreed upon

the specific fees with an intermediary correspondent
institution,
and
this
correspondent institution is the only institution in the transmittal route to the designated recipient’s institution.
32(b) Permanent Exceptions
32(b)(1) Permanent Exceptions for Transfers to
Certain Countries
1. Laws of the recipient country. The laws of
the recipient country do not permit a remittance transfer provider to determine exact
amounts required to be disclosed when a law
or regulation of the recipient country requires the person making funds directly
available to the designated recipient to
apply an exchange rate that is:
i. Set by the government of the recipient
country after the remittance transfer provider sends the remittance transfer or
ii. Set when the designated recipient receives the funds.
2. Example illustrating when exact amounts
can and cannot be determined because of the
laws of the recipient country.
i. The laws of the recipient country do not
permit a remittance transfer provider to determine the exact exchange rate required to
be disclosed under § 1005.31(b)(1)(iv) when, for
example, the government of the recipient
country, on a daily basis, sets the exchange
rate that must, by law, apply to funds received and the funds are made available to
the designated recipient in the local currency the day after the remittance transfer
provider sends the remittance transfer.
ii. In contrast, the laws of the recipient
country permit a remittance transfer provider to determine the exact exchange rate
required
to
be
disclosed
under
§ 1005.31(b)(1)(iv) when, for example, the government of the recipient country ties the
value of its currency to the U.S. dollar.
3. Method by which transactions are made in
the recipient country. The method by which
transactions are made in the recipient country does not permit a remittance transfer
provider to determine exact amounts required to be disclosed when transactions are
sent via international ACH on terms negotiated between the United States government and the recipient country’s government, under which the exchange rate is a
rate set by the recipient country’s central
bank or other governmental authority after
the provider sends the remittance transfer.
4. Example illustrating when exact amounts
can and cannot be determined because of the
method by which transactions are made in the
recipient country.
i. The method by which transactions are
made in the recipient country does not permit a remittance transfer provider to determine the exact exchange rate required to be
disclosed under § 1005.31(b)(1)(iv) when the
provider sends a remittance transfer via

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international ACH on terms negotiated between the United States government and the
recipient country’s government, under which
the exchange rate is a rate set by the recipient country’s central bank on the business
day after the provider has sent the remittance transfer.
ii. In contrast, a remittance transfer provider
would
not
qualify
for
the
§ 1005.32(b)(1)(i)(B) methods exception if it
sends a remittance transfer via international
ACH on terms negotiated between the United
States government and a private-sector entity or entities in the recipient country, under
which the exchange rate is set by the institution acting as the entry point to the recipient country’s payments system on the
next business day. However, a remittance
transfer provider sending a remittance transfer using such a method may qualify for the
§ 1005.32(a) temporary exception.
iii. A remittance transfer provider would
not qualify for the § 1005.32(b)(1)(i)(B) methods exception if, for example, it sends a remittance transfer via international ACH on
terms negotiated between the United States
government and the recipient country’s government, under which the exchange rate is
set by the recipient country’s central bank
or other governmental authority before the
sender requests a transfer.
5. Safe harbor list. If a country is included
on a safe harbor list published by the Bureau
under § 1005.32(b)(1)(ii), a remittance transfer
provider may provide estimates of the
amounts
to
be
disclosed
under
§ 1005.31(b)(1)(iv) through (b)(1)(vii). If a country does not appear on the Bureau’s list, a
remittance transfer provider may provide estimates under § 1005.32(b)(1)(i) if the provider
determines that the recipient country does
not legally permit or method by which transactions are conducted in that country does
not permit the provider to determine exact
disclosure amounts.
6. Reliance on Bureau list of countries. A remittance transfer provider may rely on the
list of countries published by the Bureau to
determine whether the laws of a recipient
country do not permit the remittance transfer provider to determine exact amounts required to be disclosed under § 1005.31(b)(1)(iv)
through (vii). Thus, if a country is on the Bureau’s list, the provider may give estimates
under this section, unless a remittance
transfer provider has information that a
country on the Bureau’s list legally permits
the provider to determine exact disclosure
amounts.
7. Change in laws of recipient country. i. If
the laws of a recipient country change such
that a remittance transfer provider can determine exact amounts, the remittance
transfer provider must begin providing exact
amounts for the required disclosures as soon
as reasonably practicable if the provider has
information that the country legally permits

the provider to determine exact disclosure
amounts.
ii. If the laws of a recipient country change
such that a remittance transfer provider
cannot determine exact disclosure amounts,
the remittance transfer provider may provide estimates under § 1005.32(b)(1)(i), even if
that country does not appear on the list published by the Bureau.
32(b)(2) Permanent Exceptions for Transfers
Scheduled Before the Date of Transfer
1. Fixed amount of foreign currency. The following is an example of when and how a remittance transfer provider may disclose estimates for remittance transfers scheduled
five or more business days before the date of
transfer where the provider agrees to the
sender’s request to fix the amount to be
transferred in a currency in which the transfer will be received and not the currency in
which it was funded. If on February 1, a sender schedules a 1000 Euro wire transfer to be
sent from the sender’s bank account denominated in U.S. dollars to a designated recipient on February 15, § 1005.32(b)(2) allows the
provider to estimate the amount that will be
transferred to the designated recipient (i.e.,
the amount described in § 1005.31(b)(1)(i)), any
fees imposed or taxes collected on the remittance transfer by the provider (if based on
the amount transferred) (i.e., the amount described in § 1005.31(b)(1)(ii)), and the total
amount of the transaction (i.e., the amount
described in § 1005.31(b)(1)(iii)). The provider
may also estimate any covered third-party
fees if the exchange rate is also estimated
and the estimated exchange rate affects the
amount
of
fees
(as
allowed
by
§ 1005.32(b)(2)(ii)).
2. Relationship to § 1005.10(d). To the extent
§ 1005.10(d) requires, for an electronic fund
transfer that is also a remittance transfer,
notice when a preauthorized electronic fund
transfer from the consumer’s account will
vary in amount from the previous transfer
under the same authorization or from the
preauthorized amount, that provision applies
even if subpart B would not otherwise require notice before the date of transfer. However, insofar as § 1005.10(d) does not specify
the form of such notice, a notice sent pursuant to § 1005.36(a)(2)(i) will satisfy § 1005.10(d)
as long as the timing requirements of
§ 1005.10(d) are satisfied.
32(b)(3) Permanent Exception for Optional Disclosure of Non-Covered Third-Party Fees and
Taxes Collected on the Remittance Transfer
by a Person Other Than the Provider
1. Reasonable sources of information. Pursuant to § 1005.32(b)(3) a remittance transfer
provider may estimate applicable non-covered third-party fees and taxes collected on
the remittance transfer by a person other
than the provider using reasonable sources of

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information. Reasonable sources of information may include, for example: information
obtained from recent transfers to the same
institution or the same country or region;
fee schedules from the recipient institution;
fee schedules from the recipient institution’s
competitors; surveys of recipient institution
fees in the same country or region as the recipient institution; information provided or
surveys of recipient institutions’ regulators
or taxing authorities; commercially or publicly available databases, services or sources;
and information or resources developed by
international nongovernmental organizations or intergovernmental organizations.
32(c) Bases for Estimates
32(c)(1) Exchange Rate
1. Most recent exchange rate for qualifying
international ACH transfers. If the exchange
rate for a remittance transfer sent via international ACH that qualifies for the
§ 1005.32(b)(1)(i)(B) exception is set the following business day, the most recent exchange rate available for a transfer is the exchange rate set for the day that the disclosure is provided, i.e., the current business
day’s exchange rate.
2. Publicly available. Examples of publicly
available sources of information containing
the most recent wholesale exchange rate for
a currency include U.S. news services, such
as Bloomberg, the Wall Street Journal, and
the New York Times; a recipient country’s
national news services, and a recipient country’s central bank or other government
agency.
3. Spread. An estimate for disclosing the
exchange rate based on the most recent publicly available wholesale exchange rate must
also reflect any spread the remittance transfer provider typically applies to the wholesale exchange rate for remittance transfers
for a particular currency.
4. Most recent. For the purposes of
§ 1005.32(c)(1)(ii) and (iii), if the exchange rate
with respect to a particular currency is published or provided multiple times throughout
the day because the exchange rate fluctuates
throughout the day, a remittance transfer
provider may use any exchange rate available on that day to determine the most recent exchange rate.

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32(c)(3) Covered Third-Party Fees
1. Potential transmittal routes. A remittance
transfer from the sender’s account at an insured institution to the designated recipient’s institution may take several routes,
depending on the correspondent relationships each institution in the transmittal
route has with other institutions. In providing an estimate of the fees required to be
disclosed under § 1005.31(b)(1)(vi) pursuant to
the § 1005.32(a) temporary exception, an insured institution may rely upon the rep-

resentations of the designated recipient’s institution and the institutions that act as
intermediaries in any one of the potential
transmittal routes that it reasonably believes a requested remittance transfer may
travel.
32(d) Bases for Estimates for Transfers
Scheduled Before the Date of Transfer
1. In general. When providing an estimate
pursuant to § 1005.32(b)(2), § 1005.32(d) requires
that a remittance transfer provider’s estimated exchange rate must be the exchange
rate (or estimated exchange rate) that the
remittance transfer provider would have
used or did use that day in providing disclosures to a sender requesting such a remittance transfer to be made on the same day.
If, for the same-day remittance transfer, the
provider could utilize either of the other two
exceptions permitting the provision of estimates in § 1005.32(a) or (b)(1), the provider
may provide estimates based on a methodology permitted under § 1005.32(c). For example, if, on February 1, the sender schedules a
remittance transfer to occur on February 10,
the provider should disclose the exchange
rate as if the sender was requesting the
transfer be sent on February 1. However, if
at the time payment is made for the requested transfer, the remittance transfer
provider could not send any remittance
transfer until the next day (for reasons such
as the provider’s deadline for the batching of
transfers), the remittance transfer provider
can use the rate (or estimated exchange rate)
that the remittance transfer provider would
have used or did use in providing disclosures
that day with respect to a remittance transfer requested that day that could not be sent
until the following day.
SECTION 1005.33—PROCEDURES FOR RESOLVING
ERRORS
33(a) Definition of Error
1. Incorrect amount of currency paid by sender.
Section
1005.33(a)(1)(i)
covers
circumstances in which a sender pays an
amount that differs from the total amount of
the transaction, including fees imposed in
connection with the transfer, stated in the
receipt or combined disclosure provided
under § 1005.31(b)(2) or (3). Such error may be
asserted by a sender regardless of the form
or method of payment provided, including
when a debit, credit, or prepaid card is used
to fund the transfer and an excess amount is
paid. For example, if a remittance transfer
provider incorrectly charged a sender’s credit card account for US$150, and US$120 was
sent, plus a transfer fee of US$10, the sender
could assert an error with the remittance
transfer provider for the incorrect charge
under § 1005.33(a)(1)(i).

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2. Incorrect amount of currency received—coverage. Section 1005.33(a)(1)(iii) covers circumstances in which the designated recipient receives an amount of currency that differs from the amount of currency identified
on the disclosures provided to the sender, except where the disclosure stated an estimate
of the amount of currency to be received in
accordance with § 1005.32 and the difference
results from application of the actual exchange rate, fees, and taxes, rather than any
estimated amounts, or the failure was caused
by circumstances outside the remittance
transfer provider’s control. A designated recipient may receive an amount of currency
that differs from the amount of currency disclosed, for example, if an exchange rate
other than the disclosed rate is applied to
the remittance transfer, or if the provider
fails to account for fees or taxes that may be
imposed by the provider or a third party before the transfer is picked up by the designated recipient or deposited into the recipient’s account in the foreign country.
However, if the provider rounds the exchange
rate used to calculate the amount received
consistent with § 1005.31(b)(1)(iv) and comment 31(b)(1)(iv)–2 for the disclosed rate,
there is no error if the designated recipient
receives an amount of currency that results
from applying the exchange rate used, prior
to any rounding of the exchange rate, to calculate fees, taxes, or the amount received
rather than the disclosed rate. Section
1005.33(a)(1)(iii) also covers circumstances in
which the remittance transfer provider
transmits an amount that differs from the
amount requested by the sender.
3. Incorrect amount of currency received—examples. For purposes of the following examples illustrating the error for an incorrect
amount
of
currency
received
under
§ 1005.33(a)(1)(iii), assume that none of the
circumstances permitting an estimate under
§ 1005.32 apply (unless otherwise stated).
i. A consumer requests to send funds to a
relative in Mexico to be received in local
currency. Upon receiving the sender’s payment, the remittance transfer provider provides a receipt indicating that the amount of
currency that will be received by the designated recipient will be 1180 Mexican pesos,
after fees and taxes are applied. However,
when the relative picks up the transfer in
Mexico a day later, he only receives 1150
Mexican pesos because the exchange rate applied by the recipient agent in Mexico was
lower than the exchange rate used by the
provider, prior to any rounding of the exchange rate, to disclose the amount of currency to be received by the designated recipient on the receipt. Because the designated recipient has received less than the
amount of currency disclosed on the receipt,
an error has occurred.
ii. A consumer requests to send funds to a
relative in Colombia to be received in local

currency. The remittance transfer provider
provides the sender a receipt stating an
amount of currency that will be received by
the designated recipient, which does not reflect the additional foreign taxes that will be
collected in Colombia on the transfer but
does include the statement required by
§ 1005.31(b)(1)(viii). If the designated recipient
will receive less than the amount of currency
disclosed on the receipt due solely to the additional foreign taxes that the provider was
not required to disclose, no error has occurred.
iii. Same facts as in ii., except that the receipt provided by the remittance transfer
provider does not reflect additional fees that
are imposed by the receiving agent in Colombia on the transfer. Because the designated
recipient will receive less than the amount
of currency disclosed in the receipt due to
the additional covered third-party fees, an
error has occurred.
iv. A consumer requests to send US$250 to
a relative in India to a U.S. dollar-denominated account held by the relative at an Indian bank. Instead of the US$250 disclosed on
the receipt as the amount to be sent, the remittance transfer provider sends US$200, resulting in a smaller deposit to the designated
recipient’s account than was disclosed as the
amount to be received after fees and taxes.
Because the designated recipient received
less than the amount of currency that was
disclosed, an error has occurred.
v. A consumer requests to send US$100 to a
relative in a foreign country to be received
in local currency. The remittance transfer
provider provides the sender a receipt that
discloses an estimated exchange rate, other
taxes, and amount of currency that will be
received due to the law in the foreign country requiring that the exchange rate be set
by the foreign country’s central bank. When
the relative picks up the remittance transfer, the relative receives less currency than
the estimated amount disclosed to the sender on the receipt due to application of the actual exchange rate, fees, and taxes, rather
than any estimated amounts. Because
§ 1005.32(b) permits the remittance transfer
provider to disclose an estimate of the
amount of currency to be received, no error
has occurred unless the estimate was not
based on an approach set forth under
§ 1005.32(c).
vi. A sender requests that his bank send
US$120 to a designated recipient’s account at
an institution in a foreign country. The foreign institution is not an agent of the provider. Only US$100 is deposited into the designated recipient’s account because the recipient institution imposed a US$20 incoming wire fee and deducted the fee from the
amount transferred. Because this fee is a
non-covered third-party fee that the provider
is
not
required
to
disclose
under
§ 1005.31(b)(1)(vi), no error has occurred if the

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provider provided the disclosure required by
§ 1005.31(b)(1)(viii).
4. Incorrect amount of currency received—extraordinary
circumstances.
Under
§ 1005.33(a)(1)(iii)(B), a remittance transfer
provider’s failure to make available to a designated recipient the amount of currency
disclosed pursuant to § 1005.31(b)(1)(vii) and
stated in the disclosure provided pursuant to
§ 1005.31(b)(2) or (3) for the remittance transfer is not an error if such failure was caused
by extraordinary circumstances outside the
remittance transfer provider’s control that
could not have been reasonably anticipated.
Examples of extraordinary circumstances
outside the remittance transfer provider’s
control that could not have been reasonably
anticipated under § 1005.33(a)(1)(iii)(B) include circumstances such as war or civil unrest, natural disaster, garnishment or attachment of some of the funds after the
transfer is sent, and government actions or
restrictions that could not have been reasonably anticipated by the remittance transfer
provider, such as the imposition of foreign
currency controls or foreign taxes unknown
at the time the receipt or combined disclosure is provided under § 1005.31(b)(2) or (3).
5. Failure to make funds available by disclosed date of availability—coverage. Section
1005.33(a)(1)(iv) generally covers disputes
about the failure to make funds available in
connection with a remittance transfer to a
designated recipient by the disclosed date of
availability. If only a portion of the funds
were made available by the disclosed date of
availability, then § 1005.33(a)(1)(iv) does not
apply, but § 1005.33(a)(1)(iii) may apply instead. The following are examples of errors
for failure to make funds available by the
disclosed date of availability (assuming that
none of the exceptions in § 1005.33(a)(1)(iv)(A),
(B), or (C) apply).
i. Late or non-delivery of a remittance
transfer;
ii. Delivery of funds to the wrong account;
iii. The fraudulent pick-up of a remittance
transfer in a foreign country by a person
other than the designated recipient;
iv. The recipient agent or institution’s retention of the remittance transfer, instead of
making the funds available to the designated
recipient.
6. Failure to make funds available by disclosed date of availability—extraordinary circumstances. Under § 1005.33(a)(1)(iv)(A), a remittance transfer provider’s failure to deliver or transmit a remittance transfer by
the disclosed date of availability is not an
error if such failure was caused by extraordinary circumstances outside the remittance
transfer provider’s control that could not
have been reasonably anticipated. Examples
of extraordinary circumstances outside the
remittance transfer provider’s control that
could not have been reasonably anticipated
under
§ 1005.33(a)(1)(iv)(A)
include
cir-

cumstances such as war or civil unrest, natural disaster, garnishment or attachment of
funds after the transfer is sent, and government actions or restrictions that could not
have been reasonably anticipated by the remittance transfer provider, such as the imposition of foreign currency controls.
7. Failure to make funds available by disclosed date of availability—fraud and other
screening
procedures.
Under
§ 1005.33(a)(1)(iv)(B), a remittance transfer
provider’s failure to deliver funds by the disclosed date of availability is not an error if
such delay is related to the provider’s or any
third party’s investigation necessary to address potentially suspicious, blocked or prohibited activity, and the provider did not and
could not have reasonably foreseen the delay
so as to enable it to timely disclose an accurate date of availability when providing the
sender with a receipt or combined disclosure.
For example, no error occurs if delivery of
funds is delayed because, after the receipt is
provided, the provider’s fraud screening system flags a remittance transfer because the
designated recipient has a name similar to
the name of a blocked person under a sanctions program and further investigation is
needed to determine that the designated recipient is not actually a blocked person.
Similarly, no error occurs where, after disclosing a date of availability to the sender, a
remittance transfer provider receives specific law enforcement information indicating
that the characteristics of a remittance
transfer match a pattern of fraudulent activity, and as a result, the provider deems it
necessary to delay delivery of the funds to
allow for further investigation. However, if a
delay could have been reasonably foreseen,
the exception in § 1005.33(a)(1)(iv)(B) would
not apply. For example, if a provider knows
in time to make a disclosure that all remittance transfers to a certain geographic area
must undergo screening procedures that routinely delay such transfers by two days, the
provider’s failure to include the additional
two days in its disclosure of the date of
availability constitutes an error if delivery
of the funds is indeed delayed beyond the disclosed date of availability.
8. Sender account number or recipient institution identifier error. The exception in
§ 1005.33(a)(1)(iv)(D) applies where a sender
gives the remittance transfer provider an incorrect account number or recipient institution identifier and all five conditions in
§ 1005.33(h) are satisfied. The exception does
not apply, however, where the failure to
make funds available is the result of a mistake by a provider or a third party or due to
incorrect or insufficient information provided by the sender other than an incorrect
account number or recipient institution
identifier, such as an incorrect name of the
recipient institution.

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Bur. of Consumer Financial Protection

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9. Account number or recipient institution
identifier. For purposes of the exception in
§ 1005.33(a)(1)(iv)(D), the terms account number and recipient institution identifier refer
to alphanumerical account or institution
identifiers other than names or addresses,
such as account numbers, routing numbers,
Canadian transit numbers, International
Bank Account Numbers (IBANs), Business
Identifier Codes (BICs)) and other similar account or institution identifiers used to route
a transaction. In addition and for purposes of
this exception, the term designated recipient’s account in § 1005.30(h)(2) refers to an
asset account, regardless of whether it is a
consumer asset account, established for any
purpose and held by a bank, savings association, credit union, or equivalent institution.
A designated recipient’s account does not,
however, include a credit card, prepaid card,
or a virtual account held by an Internetbased or mobile telephone company that is
not a bank, savings association, credit union
or equivalent institution.
10.
Recipient-requested
changes.
Under
§ 1005.33(a)(2)(iii), a change requested by the
designated recipient that the remittance
transfer provider or others involved in the
remittance transfer decide to accommodate
is not considered an error. The exception
under § 1005.33(a)(2)(iii) is available only if
the change is made solely because the designated recipient requested the change. For
example, if a sender requests to send US$100
to a designated recipient at a designated location, but the designated recipient requests
the amount in a different currency (either at
the sender-designated location or another location requested by the recipient) and the remittance transfer provider accommodates
the recipient’s request, the change does not
constitute an error.
11. Change from disclosure made in reliance
on sender information. Under the commentary
accompanying § 1005.31, the remittance transfer provider may rely on the sender’s representations in making certain disclosures.
See,
e.g.,
comments
31(b)(1)(iv)–1
and
31(b)(1)(vi)–1. For example, suppose a sender
requests U.S. dollars to be deposited into an
account of the designated recipient and represents that the account is U.S. dollar-denominated. If the designated recipient’s account is actually denominated in local currency and the recipient account-holding institution must convert the remittance transfer into local currency in order to deposit
the funds and complete the transfer, the
change in currency does not constitute an
error pursuant to § 1005.33(a)(2)(iv).

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33(b) Notice of Error From Sender
1. Person asserting or discovering error. The
error resolution procedures of this section
apply only when a notice of error is received
from the sender, and not when a notice of

error is received from the designated recipient or when the remittance transfer provider
itself discovers and corrects an error.
2. Content of error notice. The notice of
error is effective so long as the remittance
transfer provider is able to identify the elements in § 1005.33(b)(1)(ii). For example, the
sender could provide the confirmation number or code that would be used by the designated recipient to pick up the transfer, or
other identification number or code supplied
by the remittance transfer provider in connection with the transfer, if such number or
code is sufficient for the remittance transfer
provider to identify the sender (and contact
information), designated recipient, and the
transfer in question. For an account-based
remittance transfer, the notice of error is effective even if it does not contain the sender’s account number, so long as the remittance transfer provider is able to identify the
account and the transfer in question.
3. Address on notice of error. A remittance
transfer provider may request, or a sender
may provide, the sender’s or designated recipient’s email address, as applicable, instead of a physical address, on a notice of
error.
4. Effect of late notice. A remittance transfer provider is not required to comply with
the requirements of this section for any notice of error from a sender that is received
by the provider more than 180 days from the
disclosed date of availability of the remittance transfer to which the notice of error
applies or, if applicable, more than 60 days
after a provider sent documentation, additional information, or clarification requested by the sender, provided such date is
later than 180 days after the disclosed date of
availability.
5. Notice of error provided to agent. A notice
of error provided by a sender to an agent of
the remittance transfer provider is deemed
to be received by the provider under
§ 1005.33(b)(1)(i) when received by the agent.
6. Consumer notice of error resolution rights.
Section 1005.31 requires a remittance transfer provider to include an abbreviated notice
of the consumer’s error resolution rights on
the receipt or combined notice provided
under § 1005.31(b)(2) or (3). In addition, the remittance transfer provider must make available to a sender upon request, a notice providing a full description of the sender’s error
resolution rights, using language set forth in
Appendix A of this part (Model Form A–36)
or substantially similar language.
33(c) Time Limits and Extent of Investigation
1. Notice to sender of finding of error. If the
remittance transfer provider determines during its investigation that an error occurred
as described by the sender, the remittance
provider may inform the sender of its findings either orally or in writing. However, if
the provider determines that no error or a

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different error occurred, the provider must
provide a written explanation of its findings
under § 1005.33(d)(1).
2. Incorrect or insufficient information provided
for
transfer.
The
remedy
in
§ 1005.33(c)(2)(iii) applies if a remittance
transfer provider’s failure to make funds in
connection with a remittance transfer available to a designated recipient by the disclosed date of availability occurred because
the sender provided incorrect or insufficient
information in connection with the transfer,
such as by erroneously identifying the designated recipient’s address or by providing
insufficient information such that the entity
distributing the funds cannot identify the
correct designated recipient. A sender is not
considered to have provided incorrect or insufficient information for purposes of
§ 1005.33(c)(2)(iii) if the provider discloses the
incorrect location where the transfer may be
picked up, gives the wrong confirmation
number/code for the transfer, or otherwise
miscommunicates information necessary for
the designated recipient to pick-up the
transfer. The remedies in § 1005.33(c)(2)(iii) do
not apply if the sender provided an incorrect
account number or recipient institution
identifier and the provider has met the requirements of § 1005.33(h) because under
§ 1005.33(a)(1)(iv)(D) no error would have occurred. See § 1005.33(a)(1)(iv)(D) and comment
33(a)–7.
3. Designation of requested remedy. Under
§ 1005.33(c)(2)(ii), the sender may generally
choose to obtain a refund of funds that were
not properly transmitted or delivered to the
designated recipient or, request redelivery of
the amount appropriate to correct the error
at no additional cost unless the error is determined to have occurred because the sender provided incorrect or insufficient information. Upon receiving the sender’s request,
the remittance transfer provider shall correct the error within one business day, or as
soon as reasonably practicable, applying the
same exchange rate, fees, and taxes stated in
the disclosure provided under § 1005.31(b)(2) or
(3), if the sender requests delivery of the
amount appropriate to correct the error and
the error did not occur because the sender
provided incorrect or insufficient information. The provider may also request that the
sender indicate the preferred remedy at the
time the sender provides notice of the error
although if provider does so, it should indicate that the if the sender chooses a resend
at the time, the remedy may be unavailable
if the error occurred because the sender provided incorrect or insufficient information.
However, if the sender does not indicate the
desired remedy at the time of providing notice of error, the remittance transfer provider must notify the sender of any available
remedies in the report provided under
§ 1005.33(c)(1) or (d)(1) if the provider determines an error occurred.

4. Default remedy. Unless the sender provided incorrect or insufficient information
and § 1005.33(c)(2)(iii) applies, the remittance
transfer provider may set a default remedy
that the provider will provide if the sender
does not designate a remedy within a reasonable time after the sender receives the report
provided under § 1005.33(c)(1). A provider that
permits a sender to designate a remedy within 10 days after the provider has sent the report provided under § 1005.33(c)(1) or (d)(1) before imposing the default remedy is deemed
to have provided the sender with a reasonable time to designate a remedy. In the case
a default remedy is provided, the provider
must correct the error within one business
day, or as soon as reasonably practicable,
after the reasonable time for the sender to
designate the remedy has passed, consistent
with § 1005.33(c)(2).
5. Amount appropriate to resolve the error.
For purposes of the remedies set forth in
§ 1005.33(c)(2)(i)(A), (c)(2)(i)(B), (c)(2)(ii)(A)(1),
and (c)(2)(i)(A)(2) the amount appropriate to
resolve the error is the specific amount of
transferred funds that should have been received if the remittance transfer had been effected without error. The amount appropriate to resolve the error does not include
consequential damages. For example, when
the amount that was disclosed pursuant to
§ 1005.31(b)(1)(vii) was received by the designated recipient before the provider must
determine the appropriate remedy for an
error under § 1005.33(a)(1)(iv), no additional
amounts are required to resolve the error
after the remittance transfer provider refunds the appropriate fees and taxes paid by
the sender pursuant to § 1005.33(c)(2)(ii)(B) or
(c)(2)(iii), as applicable.
6. Form of refund. For a refund provided
under
§ 1005.33(c)(2)(i)(A),
(c)(2)(ii)(A)(1),
(c)(2)(ii)(B), or (c)(2)(iii), a remittance transfer provider may generally, at its discretion,
issue a refund either in cash or in the same
form of payment that was initially provided
by the sender for the remittance transfer.
For example, if the sender originally provided a credit card as payment for the transfer, the remittance transfer provider may
issue a credit to the sender’s credit card account in the appropriate amount. However, if
a sender initially provided cash for the remittance transfer, a provider may issue a refund by check. For example, if the sender
originally provided cash as payment for the
transfer, the provider may mail a check to
the sender in the amount of the payment.
7. Remedies for incorrect amount paid. If an
error under § 1005.33(a)(1)(i) occurred, the
sender may request the remittance transfer
provider refund the amount necessary to resolve the error under § 1005.33(c)(2)(i)(A) or
that the remittance transfer provider make
the amount necessary to resolve the error
available to the designated recipient at no
additional cost under § 1005.33(c)(2)(i)(B).

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8. Correction of an error if funds not available
by disclosed date. If the remittance transfer
provider determines an error of failure to
make funds available by the disclosed date
occurred under § 1005.33(a)(1)(iv), it must correct
the
error
in
accordance
with
§ 1005.33(c)(2)(ii)(A), as applicable, and refund
any fees imposed for the transfer (unless the
sender provided incorrect or insufficient information to the remittance transfer provider in connection with the remittance
transfer), whether the fee was imposed by
the provider or a third party involved in
sending the transfer, such as an intermediary bank involved in sending a wire
transfer or the institution from which the
funds are picked up in accordance with
§ 1005.33(c)(2)(ii)(B).
9. Charges for error resolution. If an error occurred, whether as alleged or in a different
amount or manner, the remittance transfer
provider may not impose a charge related to
any aspect of the error resolution process
(including charges for documentation or investigation).
10. Correction without investigation. A remittance transfer provider may correct an error,
without investigation, in the amount or
manner alleged by the sender, or otherwise
determined, to be in error, but must comply
with all other applicable requirements of
§ 1005.33.
11. Procedure for sending a new remittance
transfer after a sender provides incorrect or insufficient information. Section 1005.33(c)(2)(iii)
generally requires a remittance transfer provider to refund the transfer amount to the
sender even if the sender’s previously designated remedy was a resend or if the provider’s default remedy in other circumstances is a resend. However, if before
the refund is processed, the sender receives
notice pursuant to § 1005.33(c)(1) or (d)(1) that
an error occurred because the sender provided incorrect or insufficient information
and then requests that the provider send the
remittance transfer again, and the provider
agrees to that request, § 1005.33(c)(2)(iii) requires that the request be treated as a new
remittance transfer and the provider must
provide new disclosures in accordance with
§ 1005.31 and all other applicable provisions of
subpart B. However, § 1005.33(c)(2)(iii) does
not obligate the provider to agree to a sender’s request to send a new remittance transfer.
12. Determining amount of refund. Section
1005.33(c)(2)(iii) permits the provider to deduct from the amount refunded, or applied
towards a new transfer, any fees or taxes actually deducted from the transfer amount by
a person other than the provider as part of
the first unsuccessful remittance transfer attempt or that were deducted in the course of
returning the transfer amount to the provider following a failed delivery. However, a
provider may not deduct those fees and taxes

that will ultimately be refunded to the provider. When the provider deducts fees or
taxes from the amount refunded pursuant to
§ 1005.33(c)(2)(iii), the provider must inform
the sender of the deduction as part of the notice required by either § 1005.33(c)(1) or (d)(1)
and the reason for the deduction. The following examples illustrate these concepts.
i. A sender instructs a remittance transfer
provider to send US$100 to a designated recipient in local currency, for which the provider charges a transfer fee of US$10 (and
thus the sender pays the provider $110). The
provider’s correspondent imposes a fee of
US$15 that it deducts from the amount of the
transfer. The sender provides incorrect or insufficient information that results in non-delivery of the remittance transfer as requested. Once the provider determines that
an error occurred because the sender provided incorrect or insufficient information,
the provider must provide the report required by § 1005.33(c)(1) or (d)(1) and inform
the sender, pursuant to § 1005.33(c)(1) or
(d)(1), that it will refund US$95 to the sender
within three business days, unless the sender
chooses to apply the US$95 towards a new remittance transfer and the provider agrees. Of
the $95 that is refunded to the sender, $10 reflects the refund of the provider’s transfer
fee, and $85 reflects the refund of the amount
of funds provided by the sender in connection
with the transfer which was not properly
transmitted. The provider is not required to
refund the US$15 fee imposed by the correspondent (unless the $15 will be refunded to
the provider by the correspondent).
ii. A sender instructs a remittance transfer
provider to send US$100 to a designated recipient in a foreign country, for which the
provider charges a transfer fee of US$10 (and
thus the sender pays the provider US$110)
and an intermediary institution charges a
lifting fee of US$5, such that the designated
recipient is expected to receive only US$95,
as indicated in the receipt. If an error occurs
because the sender provides incorrect or insufficient information that results in non-delivery of the remittance transfer by the date
of availability stated in the disclosure provided to the sender for the remittance transfer under § 1005.31(b)(2) or (3), the provider is
required to refund, or reapply if requested
and the provider agrees, $105 unless the
intermediary institution refunds to the provider the US$5 fee. If the sender requests to
have the transfer amount applied to a new
remittance
transfer
pursuant
to
§ 1005.33(c)(2)(iii) and provides the corrected
or additional information, and the remittance transfer provider agrees to a resend
remedy, the remittance transfer provider
may charge the sender another transfer fee
of US$10 to send the remittance transfer
again with the corrected or additional information necessary to complete the transfer.

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Insofar as the resend is an entirely new remittance transfer, the provider must provide
a prepayment disclosure and receipt or combined disclosure in accordance with, among
other provisions, the timing requirements of
§ 1005.31(f) and the cancellation provision of
§ 1005.34(a).
iii. In connection with a remittance transfer, a provider imposes a $15 tax that it then
remits to a State taxing authority. An error
occurs because the sender provided incorrect
or insufficient information that resulted in
non-delivery of the transfer to the designated recipient. The provider may deduct
$15 from the amount it refunds to the sender
pursuant to § 1005.33(c)(2)(iii) unless the relevant tax law will result in the $15 tax being
refunded to the provider by the State taxing
authority because the transfer was not completed.
33(d) Procedures if Remittance Transfer Provider Determines No Error or Different Error
Occurred
1. Error different from that alleged. When a
remittance transfer provider determines that
an error occurred in a manner or amount different from that described by the sender, it
must comply with the requirements of both
§ 1005.33(c) and (d), as applicable. The provider may give the notice of correction and
the explanation separately or in a combined
form.
33(e) Reassertion of Error
1. Withdrawal of error; right to reassert. The
remittance transfer provider has no further
error resolution responsibilities if the sender
voluntarily withdraws the notice alleging an
error. A sender who has withdrawn an allegation of error has the right to reassert the allegation unless the remittance transfer provider had already complied with all of the
error resolution requirements before the allegation was withdrawn. The sender must do
so, however, within the original 180-day period from the disclosed date of availability
or, if applicable, the 60-day period for a notice
of
error
asserted
pursuant
to
§ 1005.33(b)(2).

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33(f) Relation to Other Laws
1. Concurrent error obligations. A financial
institution that is also the remittance transfer provider may have error obligations
under both §§ 1005.11 and 1005.33. For example,
if a sender asserts an error under § 1005.11
with a remittance transfer provider that
holds the sender’s account, and the error is
not also an error under § 1005.33 (such as the
omission of an EFT on a periodic statement),
then the error-resolution provisions of
§ 1005.11 exclusively apply to the error. However, if a sender asserts an error under
§ 1005.33 with a remittance transfer provider
that holds the sender’s account, and the

error is also an error under § 1005.11 (such as
when the amount the sender requested to be
deducted from the sender’s account and sent
for the remittance transfer differs from the
amount that was actually deducted from the
account and sent), then the error-resolution
provisions of § 1005.33 exclusively apply to
the error.
2. Holder in due course. Nothing in this section limits a sender’s rights to assert claims
and defenses against a card issuer concerning
property or services purchased with a credit
card under Regulation Z, 12 CFR 1026.12(c)(1),
as applicable.
3. Assertion of same error with multiple parties. If a sender receives credit to correct an
error of an incorrect amount paid in connection with a remittance transfer from either
the remittance transfer provider or accountholding institution (or creditor), and subsequently asserts the same error with another
party, that party has no further responsibilities to investigate the error if the error has
been corrected. For example, assume that a
sender initially asserts an error with a remittance transfer provider with respect to a
remittance transfer alleging that US$130 was
debited from his checking account, but the
sender only requested a remittance transfer
for US$100, plus a US$10 transfer fee. If the
remittance transfer provider refunds US$20
to the sender to correct the error, and the
sender subsequently asserts the same error
with his account-holding institution, the account-holding institution has no error resolution responsibilities under Regulation E
because the error has been fully corrected. In
addition, nothing in this section prevents an
account-holding institution or creditor from
reversing amounts it has previously credited
to correct an error if a sender receives more
than one credit to correct the same error.
For example, assume that a sender concurrently asserts an error with his or her account-holding institution and remittance
transfer provider for the same error, and the
sender receives credit from the account-holding institution for the error within 45 days of
the notice of error. If the remittance transfer provider subsequently provides a credit of
the same amount to the sender for the same
error, the account-holding institution may
reverse the amounts it had previously credited to the consumer’s account, even after
the 45-day error resolution period under
§ 1005.11.
33(g) Error Resolution Standards and
Recordkeeping Requirements
1. Record retention requirements. As noted in
§ 1005.31(g)(2), remittance transfer providers
are subject to the record retention requirements under § 1005.13. Therefore, remittance
transfer providers must retain documentation, including documentation related to
error investigations, for a period of not less

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than two years from the date a notice of
error was submitted to the provider or action was required to be taken by the provider. A remittance transfer provider need
not maintain records of individual disclosures that it has provided to each sender; it
need only retain evidence demonstrating
that its procedures reasonably ensure the
sender’s receipt of required disclosures and
documentation.

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33(h) Incorrect Account Number Supplied
1. Reasonable methods of verification. When a
sender provides an incorrect recipient institution identifier, § 1005.33(h)(2) limits the exception in § 1005.33(a)(1)(iv)(D) to situations
where the provider used reasonably available
means to verify that the recipient institution identifier provided by the sender did
correspond to the recipient institution name
provided by the sender. Reasonably available
means may include accessing a directory of
Business Identifier Codes and verifying that
the code provided by the sender matches the
provided institution name, and, if possible,
the specific branch or location provided by
the sender. Providers may also rely on other
commercially available databases or directories to check other recipient institution
identifiers. If reasonable verification means
fail to identify that the recipient institution
identifier is incorrect, the exception in
§ 1005.33(a)(1)(iv)(D) will apply, assuming that
the provider can satisfy the other conditions
in § 1005.33(h). Similarly, if no reasonably
available means exist to verify the accuracy
of the recipient institution identifier,
§ 1005.33(h)(2) would be satisfied and thus the
exception in § 1005.33(a)(1)(iv)(D) also will
apply, again assuming the provider can satisfy the other conditions in § 1005.33(h). However, where a provider does not employ reasonably available means to verify a recipient
institution identifier, § 1005.33(h)(2) is not
satisfied
and
the
exception
in
§ 1005.33(a)(1)(iv)(D) will not apply.
2. Reasonable efforts. Section 1005.33(h)(5)
requires a remittance transfer provider to
use reasonable efforts to recover the amount
that was to be received by the designated recipient. Whether a provider has used reasonable efforts does not depend on whether the
provider is ultimately successful in recovering the amount that was to be received by
the designated recipient. Under § 1005.33(h)(5),
if the remittance transfer provider is requested to provide documentation or other
supporting information in order for the pertinent institution or authority to obtain the
proper authorization for the return of the incorrectly credited amount, reasonable efforts to recover the amount include timely
providing any such documentation to the extent that it is available and permissible
under law. The following are examples of
reasonable efforts:

i. The remittance transfer provider
promptly calls or otherwise contacts the institution that received the transfer, either
directly or indirectly through any correspondent(s) or other intermediaries or
service providers used for the particular
transfer, to request that the amount that
was to be received by the designated recipient be returned, and if required by law or
contract, by requesting that the recipient institution obtain a debit authorization from
the holder of the incorrectly credited account.
ii. The remittance transfer provider
promptly uses a messaging service through a
funds transfer system to contact institution
that received the transfer, either directly or
indirectly through any correspondent(s) or
other intermediaries or service providers
used for the particular transfer, to request
that the amount that was to be received by
the designated recipient be returned, in accordance with the messaging service’s rules
and protocol, and if required by law or contract, by requesting that the recipient institution obtain a debit authorization from the
holder of the incorrectly credited account.
3. Promptness of Reasonable Efforts. Section
1005.33(h)(5) requires that a remittance transfer provider act promptly in using reasonable
efforts to recover the amount that was to be
received by the designated recipient. Whether a provider acts promptly to use reasonable
efforts depends on the facts and circumstances. For example, if, before the date
of
availability
disclosed
pursuant
to
§ 1005.31(b)(2)(ii), the sender informs the provider that the sender provided a mistaken
account number, the provider will have acted
promptly if it attempts to contact the recipient’s institution before the date of availability.
SECTION 1005.34—PROCEDURES FOR CANCELLATION AND REFUND OF REMITTANCE TRANSFERS

34(a) Sender Right of Cancellation and Refund
1. Content of cancellation request. A request
to cancel a remittance transfer is valid so
long as the remittance transfer provider is
able to identify the remittance transfer in
question. For example, the sender could provide the confirmation number or code that
would be used by the designated recipient to
pick up the transfer or other identification
number or code supplied by the remittance
transfer provider in connection with the
transfer, if such number or code is sufficient
for the remittance transfer provider to identify the transfer. A remittance transfer provider may also request, or the sender may
provide, the sender’s email address instead of
a physical address, so long as the remittance
transfer provider is able to identify the
transfer to which the request to cancel applies.

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2. Notice of cancellation right. Section 1005.31
requires a remittance transfer provider to include an abbreviated notice of the sender’s
right to cancel a remittance transfer on the
receipt or combined disclosure given under
§ 1005.31(b)(2) or (3). In addition, the remittance transfer provider must make available
to a sender upon request, a notice providing
a full description of the right to cancel a remittance transfer using language that is set
forth in Model Form A–36 of Appendix A to
this part or substantially similar language.
3. Thirty-minute cancellation right. A remittance transfer provider must comply with
the cancellation and refund requirements of
§ 1005.34 if the cancellation request is received by the provider no later than 30 minutes after the sender makes payment. The
provider may, at its option, provide a longer
time period for cancellation. A provider
must provide the 30-minute cancellation
right regardless of the provider’s normal
business hours. For example, if an agent
closes less than 30 minutes after the sender
makes payment, the provider could opt to
take cancellation requests through the telephone number disclosed on the receipt. The
provider could also set a cutoff time after
which the provider will not accept requests
to send a remittance transfer. For example,
a financial institution that closes at 5:00
p.m. could stop accepting payment for remittance transfers after 4:30 p.m.
4. Cancellation request provided to agent. A
cancellation request provided by a sender to
an agent of the remittance transfer provider
is deemed to be received by the provider
under § 1005.34(a) when received by the agent.
5. Payment made. For purposes of subpart B,
payment is made, for example, when a sender
provides cash to the remittance transfer provider or when payment is authorized.

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34(b) Time Limits and Refund Requirements
1. Form of refund. At its discretion, a remittance transfer provider generally may issue
a refund either in cash or in the same form
of payment that was initially provided by
the sender for the remittance transfer. For
example, if the sender originally provided a
credit card as payment for the transfer, the
remittance transfer provider may issue a
credit to the sender’s credit card account in
the amount of the payment. However, if a
sender initially provided cash for the remittance transfer, a provider may issue a refund
by check. For example, if the sender originally provided cash as payment for the
transfer, the provider may mail a check to
the sender in the amount of the payment.
2. Fees and taxes refunded. If a sender provides a timely request to cancel a remittance transfer, a remittance transfer provider must refund all funds provided by the
sender in connection with the remittance
transfer, including any fees and, to the extent not prohibited by law, taxes that have

been imposed for the transfer, whether the
fee or tax was assessed by the provider or a
third party, such as an intermediary institution, the agent or bank in the recipient
country, or a State or other governmental
body.
SECTION 1005.35—ACTS OF AGENTS
1. General. Remittance transfer providers
must comply with the requirements of subpart B, including, but not limited to, providing the disclosures set forth in § 1005.31
and providing any remedies as set forth in
§ 1005.33, even if an agent or other person performs functions for the remittance transfer
provider, and regardless of whether the provider has an agreement with a third party
that transfers or otherwise makes funds
available to a designated recipient.
SECTION 1005.36—TRANSFERS SCHEDULED IN
ADVANCE
1. Applicability of subpart B. The requirements set forth in subpart B apply to remittance transfers subject to § 1005.36, to the extent that § 1005.36 does not modify those requirements. For example, the foreign language disclosure requirements in § 1005.31(g)
and related commentary continue to apply
to disclosures provided in accordance with
§ 1005.36(a)(2).
SECTION 1005.36—TRANSFERS SCHEDULED
BEFORE THE DATE OF TRANSFER
36(a) Timing
36(a)(2) Subsequent Preauthorized Remittance
Transfers
1. Changes in Disclosures. When a sender
schedules a series of preauthorized remittance transfers, the provider is generally not
required to provide a pre-payment disclosure
prior to the date of each subsequent transfer.
However, § 1005.36(a)(1)(i) requires the provider to provide a pre-payment disclosure
and receipt for the first in the series of
preauthorized remittance transfers in accordance with the timing requirements set
forth in § 1005.31(e). While certain information in those disclosures is expressly permitted to be estimated (see § 1005.32(b)(2)),
other information is not permitted to be estimated, or is limited in how it may be estimated. When any of the information on the
most recent receipt provided pursuant to
§ 1005.36(a)(1)(i) or (a)(2)(i), other than the
temporal
disclosures
required
by
§ 1005.31(b)(2)(ii) and (b)(2)(vii), is no longer
accurate with respect to a subsequent
preauthorized remittance transfer for reasons other than as permitted by § 1005.32, the
provider must provide, within a reasonable
time prior to the scheduled date of the next
preauthorized remittance transfer, a receipt
that complies with § 1005.31(b)(2) and which

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discloses, among the other disclosures required by § 1005.31(b)(2), the changed terms.
For example, if the provider discloses in the
pre-payment disclosure for the first in the
series of preauthorized remittance transfers
that its fee for each remittance transfer is
$20 and, after six preauthorized remittance
transfers, the provider increases its fee to $30
(to the extent permitted by contract law),
the provider must provide the sender a receipt that complies with §§ 1005.31(b)(2) and
1005.36(b)(2) within a reasonable time prior to
the seventh transfer. Barring a further
change, this receipt will apply to transfers
after the seventh transfer. Or, if, after the
sixth transfer, a tax collected by the provider increases from 1.5% of the amount that
will be transferred to the designated recipient to 2.0% of the amount that will be transferred to the designated recipient, the provider must provide the sender a receipt that
complies with §§ 1005.31(b)(2) and 1005.36(b)(2)
within a reasonable time prior to the seventh transfer. In contrast, § 1005.36(a)(2)(i)
does not require an updated receipt where an
exchange rate, estimated as permitted by
§ 1005.32(b)(2), changes.
2. Clearly and conspicuously. In order to indicate clearly and conspicuously that the
provider’s fee has changed as required by
§ 1005.36(a)(2)(i), the provider could, for example, state on the receipt: ‘‘Transfer Fees (UPDATED) * * * $30.’’ To the extent that other
figures on the receipt must be revised because of the new fee, the receipt should also
indicate that those figures are updated.
3. Reasonable time. If a disclosure required
by § 1005.36(a)(2)(i) or (d)(1) is mailed, the disclosure would be considered to be received by
the sender five business days after it is posted in the mail. If hand delivered or provided
electronically, the receipt would be considered to be received by the sender at the time
of delivery. Thus, if the provider mails a disclosure required by § 1005.36(a)(2)(i) or (d)(1)
not later than ten business days before the
scheduled date of the transfer, or hand or
electronically delivers a disclosure not later
than five business days before the scheduled
date of the transfer, the provider would be
deemed to have provided the disclosure within a reasonable time prior to the scheduled
date of the subsequent preauthorized remittance transfer.

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36(b) Accuracy
1. Use of estimates. In providing the disclosures described in § 1005.36(a)(1)(i) or (a)(2)(i),
remittance transfer providers may use estimates to the extent permitted by any of the
exceptions in § 1005.32. When estimates are
permitted, however, they must be disclosed
in accordance with § 1005.31(d).
2. Subsequent preauthorized remittance transfers. For a subsequent transfer in a series of
preauthorized remittance transfers, the receipt provided pursuant to § 1005.36(a)(1)(i),

except for the temporal disclosures in that
receipt required by § 1005.31(b)(2)(ii) (Date
Available) and (b)(2)(vii) (Transfer Date), applies to each subsequent preauthorized remittance transfer unless and until it is superseded by a receipt provided pursuant to
§ 1005.36(a)(2)(i).
For
each
subsequent
preauthorized remittance transfer, only the
most recent receipt provided pursuant to
§ 1005.36(a)(1)(i) or (a)(2)(i) must be accurate
as of the date each subsequent transfer is
made.
3.
Receipts.
A
receipt
required
by
§ 1005.36(a)(1)(ii) or (a)(2)(ii) must accurately
reflect the details of the transfer to which it
pertains and may not contain estimates pursuant to § 1005.32(b)(2). However, the remittance transfer provider may continue to disclose estimates to the extent permitted by
§ 1005.32(a) or (b)(1). In providing receipts pursuant to § 1005.36(a)(1)(ii) or (a)(2)(ii),
§ 1005.36(b)(2) and (3) do not allow a remittance transfer provider to change figures
previously disclosed on a receipt provided
pursuant to § 1005.36(a)(1)(i) or (a)(2)(i), unless
a figure was an estimate or based on an estimate disclosed pursuant to § 1005.32. Thus, for
example, if a provider disclosed its fee as $10
in
a
receipt
provided
pursuant
to
§ 1005.36(a)(1)(i) and that receipt contained an
estimate of the exchange rate pursuant to
§ 1005.32(b)(2), the second receipt provided
pursuant to § 1005.36(a)(1)(ii) must also disclose the fee as $10.
36(c) Cancellation
1. Scheduled remittance transfer. Section
1005.36(c) applies when a remittance transfer
is scheduled by the sender at least three
business days before the date of the transfer,
whether
the
sender
schedules
a
preauthorized remittance transfer or a onetime transfer. A remittance transfer is
scheduled if it will require no further action
by the sender to send the transfer after the
sender requests the transfer. For example, a
remittance transfer is scheduled at least
three business days before the date of the
transfer, and § 1005.36(c) applies, where a
sender on March 1 requests a remittance
transfer provider to send a wire transfer to
pay a bill in a foreign country on March 15,
if it will require no further action by the
sender to send the transfer after the sender
requests the transfer. A remittance transfer
is not scheduled, and § 1005.36(c) does not
apply, where a transfer occurs more than
three days after the date the sender requests
the transfer solely due to the provider’s
processing time. The following are examples
of when a sender has not scheduled a remittance transfer at least three business days
before the date of the remittance transfer,
such that the cancellation rule in § 1005.34
applies.

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i. A sender on March 1 requests a remittance transfer provider to send a wire transfer to pay a bill in a foreign country on
March 3.
ii. A sender on March 1 requests that a remittance transfer provider send a remittance
transfer on March 15, but the provider requires the sender to confirm the request on
March 14 in order to send the transfer.
iii. A sender on March 1 requests that a remittance transfer provider send an ACH
transfer, and that transfer is sent on March
2, but due to the time required for processing, funds will not be deducted from the
sender’s account until March 5.
2. Cancelled preauthorized remittance transfers. For preauthorized remittance transfers,
the provider must assume the request to cancel applies to all future preauthorized remittance transfers, unless the sender specifically indicates that it should apply only to
the next scheduled remittance transfer.
3. Concurrent cancellation obligations. A financial institution that is also a remittance
transfer provider may have both stop payment obligations under § 1005.10 and cancellation obligations under § 1005.36. If a sender
cancels a remittance transfer under § 1005.36
with a remittance transfer provider that
holds the sender’s account, and the transfer
is a preauthorized transfer under § 1005.10,
then the cancellation provisions of § 1005.36
exclusively apply.

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36(d) Date of Transfer for Subsequent
Preauthorized Remittance Transfers
1. General. Section 1005.36(d)(2)(i) permits
remittance transfer providers some flexibility in determining how and when the disclosures required by § 1005.36(d)(1) may be
provided to senders. The disclosure described
in § 1005.36(d)(1) may be provided as a separate disclosure, or on or with any other disclosure required by this subpart B related to
the same series of preauthorized remittance
transfers, provided that the disclosure and
timing requirements in § 1005.36(d)(2) and
other applicable provisions in subpart B are
satisfied. For example, the required disclosures may be made on or with a receipt provided pursuant to § 1005.36(a)(1)(i); a receipt
provided pursuant to § 1005.36(a)(2); or in a
separate disclosure created by the provider.
Thus, for example, a remittance transfer provider complies with § 1005.36(d)(1) for a period
of one year if it provides in the receipt provided to the sender when payment is made
for the initial preauthorized remittance
transfer, a schedule or summary of the dates
of
transfer
of
all
the
subsequent
preauthorized remittance transfers in the series scheduled to occur over the next 12
months (and the applicable cancellation requirements and contact information).
2.
Delivery
of
disclosure.
Section
1005.36(d)(2)(i) requires that the sender receive disclosure of the date of transfer, appli-

cable cancellation requirements, and the
provider’s contact information no more than
12 months, and no less than 5 business days
prior to the date of transfer of the subsequent preauthorized remittance transfer. For
purposes of determining when a disclosure
required by § 1005.36(d)(1) is received by the
sender, refer to comment 36(a)(2)–3.
3. Disclosure of the date of transfer. The date
of transfer of a subsequent preauthorized remittance transfer may be disclosed as a specific date (e.g., July 19, 2013) or by using a
method that clearly permits identification of
the date of the transfer, such as periodic intervals (e.g., the third Monday of every
month, or the 15th of every month). If the future dates of transfer are disclosed as occurring periodically and there is a break in the
sequence, or the date of transfer does not
otherwise conform to the described period,
e.g., if a holiday or weekend causes the provider to deviate from the normal schedule,
the remittance transfer provider should disclose the specific date of transfer for the affected transfer.
4.
Accuracy
requirements.
Section
1005.36(d)(4) sets forth accuracy requirements
for disclosures required for subsequent
preauthorized remittance transfers under
§ 1005.36(d)(1). If any of the information provided in these disclosures change, the provider must provide an updated disclosure
with the revised information that is accurate
as of when the transfer is made, pursuant to
§ 1005.36(d)(2).
APPENDIX A—MODEL DISCLOSURE CLAUSES
AND FORMS
1. Review of forms. The Bureau will not review or approve disclosure forms or statements for financial institutions. However,
the Bureau has issued model clauses for institutions to use in designing their disclosures. If an institution uses these clauses accurately to reflect its service, the institution
is protected from liability for failure to
make disclosures in proper form.
2. Use of forms. The appendix contains
model disclosure clauses for optional use by
financial institutions and remittance transfer providers to facilitate compliance with
the disclosure requirements of §§ 1005.5(b)(2)
and
(3),
1005.6(a),
1005.7,
1005.8(b),
1005.14(b)(1)(ii),
1005.15(d)(1)
and
(2),
1005.18(c)(1) and (2), 1005.31, 1005.32 and
1005.36. The use of appropriate clauses in
making disclosures will protect a financial
institution and a remittance transfer provider from liability under sections 916 and
917 of the act provided the clauses accurately
reflect the institution’s EFT services and the
provider’s remittance transfer services, respectively.
3. Altering the clauses. Financial institutions may use clauses of their own design in
conjunction with the Bureau’s model
clauses. The inapplicable words or portions

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of phrases in parentheses should be deleted.
The catchlines are not part of the clauses
and need not be used. Financial institutions
may make alterations, substitutions, or additions in the clauses to reflect the services
offered, such as technical changes (including
the substitution of a trade name for the word
‘‘card,’’ deletion of inapplicable services, or
substitution of lesser liability limits). Several of the model clauses include references
to a telephone number and address. Where
two or more of these clauses are used in a
disclosure, the telephone number and address
may be referenced and need not be repeated.
4. Model forms for remittance transfers. The
Bureau will not review or approve disclosure
forms for remittance transfer providers.
However, this appendix contains 15 model
forms for use in connection with remittance
transfers. These model forms are intended to
demonstrate several formats a remittance
transfer provider may use to comply with
the requirements of § 1005.31(b). Model Forms
A–30 through A–32 demonstrate how a provider could provide the required disclosures
for a remittance transfer exchanged into
local currency. Model Forms A–30(a), (b), (c),
and (d) demonstrate four options regarding
model language related to the required disclaimer, where applicable, of non-covered
third-party fees and taxes on the remittance
transfer collected by a person other than the
provider under § 1005.31(b)(1)(viii). Model
forms 30(b) through (d) also include language
that may be used if a provider elects to estimate either these non-covered third-party
fees or taxes collected by a person other than
the provider as part of the disclaimer. Model
Forms A–33 through A–35 demonstrate how a
provider could provide the required disclosures for dollar-to-dollar remittance transfers. These forms also demonstrate disclosure of the required content, in accordance
with the grouping and proximity requirements of § 1005.31(c)(1) and (2), in both a register receipt format and an 8.5 inch by 11
inch format. Model Form A–36 provides long
form model error resolution and cancellation
disclosures required by § 1005.31(b)(4), and
Model Form A–37 provides short form model
error resolution and cancellation disclosures
required by § 1005.31(b)(2)(iv) and (vi). Model
Forms A–38 through A–41 provide language
for Spanish language disclosures.
i. The model forms contain information
that is not required by subpart B, including
a confirmation code, the sender’s name and
contact information, and the optional disclosure of the estimated amount of these noncovered third-party fees and taxes collected
by a person other than the provider as part
of the disclaimer. Additional information
not required by subpart B may be presented
on the model forms as permitted by
§ 1005.31(b)(1)(viii) and (c)(4). Any additional
information must be presented consistent
with a remittance transfer provider’s obliga-

tion to provide required disclosures in a
clear and conspicuous manner.
ii. Use of the model forms is optional. A remittance transfer provider may change the
forms by rearranging the format or by making modifications to the language of the
forms, in each case without modifying the
substance of the disclosures. Any rearrangement or modification of the format of the
model forms must be consistent with the
form, grouping, proximity, and other requirements of § 1005.31(a) and (c). Providers
making revisions that do not comply with
this section will lose the benefit of the safe
harbor for appropriate use of Model Forms
A–30 to A–41.
iii. Permissible changes to the language
and format of the model forms include, for
example:
A. Substituting the information contained
in the model forms that is intended to demonstrate how to complete the information in
the model forms—such as names, addresses,
and Web sites; dates; numbers; and Statespecific contact information—with information applicable to the remittance transfer. In
addition, if the applicable non-covered thirdparty fees are imposed by an institution
other than a bank, a provider could modify
the disclaimer accordingly.
B. Eliminating disclosures that are not applicable to the transfer, as described under
§ 1005.31(b). For example, if only covered
third-party fees are imposed, a provider
would not use a disclaimer related to additional fees that may apply because all applicable fees are covered and included in the
disclosure as required under § 1005.31(b)(1)(vi).
C. Correcting or updating telephone numbers, mailing addresses, or Web site addresses that may change over time.
D. Providing the disclosures on a paper size
that is different from a register receipt and
8.5 inch by 11 inch formats.
E. Adding a term substantially similar to
‘‘estimated’’ in close proximity to the specified terms in § 1005.31(b)(1) and (2), as required under § 1005.31(d).
F. Providing the disclosures in a foreign
language, or multiple foreign languages, subject to the requirements of § 1005.31(g).
G. Substituting cancellation language to
reflect the right to a cancellation made pursuant to the requirements of § 1005.36(c).
iv. Changes to the model forms that are
not permissible include, for example, adding
information that is not segregated from the
required disclosures, other than as permitted
by § 1005.31(c)(4).
[76 FR 81023, Dec. 27, 2011, as amended at 78
FR 18224, Mar. 26, 2013; 77 FR 6297, Feb. 7,
2012; 77 FR 50285; 77 FR 50285, Aug. 20, 2012; 78
FR 30714, May 22, 2013; 78 FR 49366, Aug. 14,
2013; 79 FR 55993, Sept. 18, 2014]

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