Q: If a financial institution’s agreement with a consumer includes a provision that modifies or waives certain protections granted by Regulation E, such as waiving Regulation E liability protections if a consumer has shared account information with a third party, can the institution rely on its agreement when determining whether the electronic fund transfer was unauthorized and whether related liability protections apply?
A: No. The Electronic Fund Transfer Act (EFTA) includes an anti-waiver provision stating that “[n]o writing or other agreement between a consumer and any other person may contain any provision which constitutes a waiver of any right conferred or cause of action created by [EFTA].” 15 U.S.C. § 1693l. Although there may be circumstances where a consumer has provided actual authority to a third party under Regulation E according to 12 CFR § 1005.2(m), an agreement cannot restrict a consumer’s rights beyond what is provided in the law, and any contract or agreement attempting to do so is a violation of EFTA.