Electronic Fund Transfers FAQ 5 – If private network rules provide less consumer protection than federal law, can a financial institution rely on private network rules?

Compliance > Regulation E - EFTA
Q:   If private network rules provide less consumer protection than federal law, can a financial institution rely on private network rules?
 
A:   (UPDATED 6/4/2021): No. Although private network rules and other agreements may provide additional consumer protections beyond Regulation E, less protective rules do not change a financial institution’s Regulation E obligations. See 15 USC § 1693l. For example, some network rules require consumers to provide notice of an error within 60 days of the date of the transaction, even though Regulation E, 12 CFR § 1005.11(b)(1)(i), allows consumers to provide notice within 60 days after the institution sends the periodic statement showing the unauthorized transaction. Other network rules allow a financial institution to require a consumer to contact the merchant before initiating an error investigation, even though § 1005.11(b)(1) triggers error investigation obligations upon notice from the consumer. The Bureau discussed instances where examiners found financial institutions had violated the 60-day notice requirement in the Summer 2020 edition of Supervisory Highlights.
 
 
This Q&A was contained in the CFPB’s Electronic Fun Transfers FAQs that were released in June 2021 (which may be updated from time to time).  This may be found on the CFPB’s website here:  https://www.consumerfinance.gov/compliance/compliance-resources/deposit-accounts-resources/electronic-fund-transfers/electronic-fund-transfers-faqs/
 

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