CFPB EFT FAQ Coverage Transactions 5 – Is a P2P debit card “pass-through” payment considered an EFT?

Compliance > Regulation E - EFTA
Q:  Is a P2P debit card “pass-through” payment considered an EFT?
 
A:   Yes.
 
Generally, a “pass-through” payment transfers funds from the consumer’s account held by an external financial institution to another person’s account held by an external financial institution. A “pass-through” payment is initiated through a financial institution that does not hold a consumer’s account, for example, a non-bank P2P provider. As discussed in Electronic Fund Transfers Coverage: Transactions Question 1, Regulation E applies to any EFT that authorizes a financial institution to debit or credit a consumer's account. 12 CFR 1005.3(a). As discussed in Electronic Fund Transfers Coverage: Transactions Question 3, the term EFT includes debit card transactions, and therefore debit card “pass through” payments are EFTs. 12 CFR 1005.3(b)(1)(v). See Electronic Fund Transfers Coverage: Financial Institutions Questions 3 and 4 for more information on the error resolution obligations of the financial institutions involved in a debit card pass-through payment.
 
 
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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