CFPB EFT FAQ Coverage Transactions 1 – What transactions are covered by the Electronic Fund Transfer Act and Regulation E?

Compliance > Regulation E - EFTA
Q:  What transactions are covered by the Electronic Fund Transfer Act and Regulation E?
 
A:   The Electronic Fund Transfer Act (EFTA) and Regulation E apply to an electronic fund transfer that authorizes a financial institution to debit or credit a consumer's account. 12 CFR 1005.3(a).
 
The term account means a demand deposit (checking), savings, or other consumer asset account (other than an occasional 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. 12 CFR 1005.2(b)(1). It includes a prepaid account, as defined by Regulation E. 12 CFR 1005.2(b)(3).
 
The term “electronic fund transfer” or “EFT” 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. 12 CFR 1005.3(b)(1). Accordingly, Regulation E applies to any person-to-person (P2P) or mobile payment transactions that meet the definition of EFT, including debit card, ACH, prepaid account, and other electronic transfers to or from a consumer account. 12 CFR 1005.3(b)(1)(v); Comment 3(b)(1)-1.ii.
 
 
This Q&A was contained in the CFPB’s Electronic Fund Transfers FAQs that were updated in December 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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