CFPB EFT FAQ Error Res Unauth EFTs 8 – If a financial institution’s agreement with a consumer includes a provision that modifies or waives certain protections …can the institution rely on its agreement…?

Compliance > Regulation E - EFTA
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 EFT was unauthorized and whether related liability protections apply?
 
A:   No. 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.
 
 
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/
 
 

Add Feedback