Summary of Federal Laws

 

Miscellaneous Laws that Might Apply                          

Compliance Partners

Associate VP for Campus Services

 

Electronic Fund Transfers, Regulation E

 

15 U.S.C. § 1693b; 12 C.F.R. § 205.1 et seq.

 

This law is designed to protect consumers making electronic fund transfers. The term "electronic fund transfer" (EFT) generally refers to a transaction initiated through an electronic terminal, telephone, computer, or magnetic tape that instructs a financial institution either to credit or to debit a consumer's asset account.

 

The Electronic Funds Transfer Act (also known as Regulation E) was adopted in 1978 as an add on to the Consumer Credit Protection Act.  Regulation E is issued by the Board of Governors of the Federal Reserve System.  The law and regulation establish the basic rights, liabilities and responsibilities of consumers who use electronic fund transfer services and of financial institutions that offer these services.  A question has been raised as to whether or not student purchasing cards or other types of stored value cards issued by universities must meet the requirements of Regulation E. 

 

The Federal Reserve Board publishes a Compliance Guide for Small Entities to Regulation E. A summary of the guide describes the basics of the law.

 

Helpful articles on Regulation E have been published in CR80News publications. An August 2003 article entitled Regulation E and Campus Cards: Are hundreds of campus card programs breaking the law? is especially helpful.

 

In relevant part this article states the crux of the matter as follows:

If you hold money for others and enable them to electronically instruct that part or all of it be transferred to another party, you must follow specified procedures with regard to how you 1) issue the access device card, 2) hold the individual liable for unauthorized transfers, 3)  initially disclose terms and conditions, 4) provide receipts and periodic statements, and 5) resolve errors or discrepancies should they occur.

 

 

 

Resources

 

Notre Dame Regulation E disclosure page

FDIC Model Disclosure Clauses and Forms

 

Goucher College Terms and Conditions of use for the OneCard

 

 

 

 

 

 

 

 

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