15 U.S.C. § 1693b — Regulations

Page 1645 TITLE 15—COMMERCE AND TRADE § 1693b 3 So in original. The colon probably should be a semicolon. (5) the term ‘‘business day’’ means any day on which the offices of the consumer’s finan- cial institution involved in an electronic fund transfer are open to the public for carrying on substantially all of its business functions; (6) the term ‘‘consumer’’ means a natural person; (7) the term ‘‘electronic fund transfer’’ means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic in- strument, or computer or magnetic tape so as to order, instruct, or authorize a financial in- stitution to debit or credit an account. Such term includes, but is not limited to, point-of- sale transfers, automated teller machine transactions, direct deposits or withdrawals of funds, and transfers initiated by telephone. Such term does not include— (A) any check guarantee or authorization service which does not directly result in a debit or credit to a consumer’s account: 3 (B) any transfer of funds, other than those processed by automated clearinghouse, made by a financial institution on behalf of a con- sumer by means of a service that transfers funds held at either Federal Reserve banks or other depository institutions and which is not designed primarily to transfer funds on behalf of a consumer; (C) any transaction the primary purpose of which is the purchase or sale of securities or commodities through a broker-dealer reg- istered with or regulated by the Securities and Exchange Commission; (D) any automatic transfer from a savings account to a demand deposit account pursu- ant to an agreement between a consumer and a financial institution for the purpose of covering an overdraft or maintaining an agreed upon minimum balance in the con- sumer’s demand deposit account; or (E) any transfer of funds which is initiated by a telephone conversation between a con- sumer and an officer or employee of a finan- cial institution which is not pursuant to a prearranged plan and under which periodic or recurring transfers are not contemplated; as determined under regulations of the Bu- reau; (8) the term ‘‘electronic terminal’’ means an electronic device, other than a telephone oper- ated by a consumer, through which a con- sumer may initiate an electronic fund trans- fer. Such term includes, but is not limited to, point-of-sale terminals, automated teller ma- chines, and cash dispensing machines; (9) the term ‘‘financial institution’’ means a State or National bank, a State or Federal savings and loan association, a mutual savings bank, a State or Federal credit union, or any other person who, directly or indirectly, holds an account belonging to a consumer; (10) the term ‘‘preauthorized electronic fund transfer’’ means an electronic fund transfer authorized in advance to recur at substan- tially regular intervals; (11) the term ‘‘State’’ means any State, ter- ritory, or possession of the United States, the District of Columbia, the Commonwealth of Puerto Rico, or any political subdivision of any of the foregoing; and (12) the term ‘‘unauthorized electronic fund transfer’’ means an electronic fund transfer from a consumer’s account initiated by a per- son other than the consumer without actual authority to initiate such transfer and from which the consumer receives no benefit, but the term does not include any electronic fund transfer (A) initiated by a person other than the consumer who was furnished with the card, code, or other means of access to such consumer’s account by such consumer, unless the consumer has notified the financial insti- tution involved that transfers by such other person are no longer authorized, (B) initiated with fraudulent intent by the consumer or any person acting in concert with the consumer, or (C) which constitutes an error committed by a financial institution. (Pub. L. 90–321, title IX, § 903, as added Pub. L. 95–630, title XX, § 2001, Nov. 10, 1978, 92 Stat. 3728; amended Pub. L. 111–203, title X, § 1084(1), (2), July 21, 2010, 124 Stat. 2081.) Editorial Notes REFERENCES IN TEXT Section 1602(i) of this title, referred to in par. (2), was redesignated section 1602(j) of this title by Pub. L. 111–203, title X, § 1100A(1)(A), July 21, 2010, 124 Stat. 2107. AMENDMENTS 2010—Pub. L. 111–203, § 1084(1), which directed the sub- stitution of ‘‘Bureau’’ for ‘‘Board’’ wherever appearing, was executed by making the substitution in pars. (2) and (6) but not in par. (3), to reflect the probable intent of Congress. Par. (3). Pub. L. 111–203, § 1084(2)(A), redesignated par. (3) as (4) defining the term ‘‘Board’’. Par. (4). Pub. L. 111–203, § 1084(2)(B), which directed addition of par. (4) defining the term ‘‘Bureau’’ after par. (3), was executed by making the addition after par. (4) defining the term ‘‘Board’’, to reflect the probable intent of Congress. Pub. L. 111–203, § 1084(2)(A), redesignated par. (3) as (4) defining the term ‘‘Board’’. Former par. (4) redesig- nated (5). Pars. (5) to (12). Pub. L. 111–203, § 1084(2)(A), redesig- nated pars. (4) to (11) as (5) to (12), respectively. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the des- ignated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees. § 1693b. Regulations (a) Prescription by the Bureau and the Board (1) In general Except as provided in paragraph (2), the Bu- reau shall prescribe rules to carry out the pur- poses of this subchapter. (2) Authority of the Board The Board shall have sole authority to pre- scribe rules— (A) to carry out the purposes of this sub- chapter with respect to a person described in section 5519(a) of title 12; and Page 1646 TITLE 15—COMMERCE AND TRADE § 1693b 1 So in original. See 2010 Amendment note below. 2 See References in Text note below. 3 So in original. Probably should be followed by ‘‘of’’. (B) to carry out the purposes of section 1693o–2 of this title. In prescribing such regulations, the Board shall: (1) 1 consult with the other agencies referred to in section 1693o 2 of this title and take into account, and allow for, the continuing evo- lution of electronic banking services and the technology utilized in such services, (2) 1 prepare an analysis of economic impact which considers the costs and benefits to fi- nancial institutions, consumers, and other users of electronic fund transfers, including the extent to which additional documentation, reports, records, or other paper work would be required, and the effects upon competition in the provision of electronic banking services among large and small financial institutions and the availability of such services to dif- ferent classes of consumers, particularly low income consumers, (3) 1 to the extent practicable, the Board shall demonstrate that the consumer protec- tions of the proposed regulations outweigh the compliance costs imposed upon consumers and financial institutions, and (4) 1 any proposed regulations and accom- panying analyses shall be sent promptly to Congress by the Board. (b) Issuance of model clauses The Bureau shall issue model clauses for op- tional use by financial institutions to facilitate compliance with the disclosure requirements of section 1693c of this title and to aid consumers in understanding the rights and responsibilities of participants in electronic fund transfers by utilizing readily understandable language. Such model clauses shall be adopted after notice duly given in the Federal Register and opportunity for public comment in accordance with section 553 of title 5. With respect to the disclosures re- quired by section 1693c(a)(3) and (4) of this title, the Bureau shall take account of variations in the services and charges under different elec- tronic fund transfer systems and, as appropriate, shall issue alternative model clauses for disclo- sure of these differing account terms. (c) Criteria; modification of requirements Regulations prescribed hereunder may contain such classifications, differentiations, or other provisions, and may provide for such adjust- ments and exceptions for any class of electronic fund transfers or remittance transfers, as in the judgment of the Bureau are necessary or proper to effectuate the purposes of this subchapter, to prevent circumvention or evasion thereof, or to facilitate compliance therewith. The Bureau shall by regulation modify the requirements im- posed by this subchapter on small financial in- stitutions if the Bureau determines that such modifications are necessary to alleviate any undue compliance burden on small financial in- stitutions and such modifications are consistent with the purpose and objective of this sub- chapter. (d) Applicability to service providers other than certain financial institutions (1) In general If electronic fund transfer services are made available to consumers by a person other than a financial institution holding a consumer’s account, the Bureau shall by regulation assure that the disclosures, protections, responsibil- ities, and remedies created by this subchapter are made applicable to such persons and serv- ices. (2) State and local government electronic ben- efit transfer systems (A) ‘‘Electronic benefit transfer system’’ de- fined In this paragraph, the term ‘‘electronic benefit transfer system’’— (i) means a system under which a gov- ernment agency distributes needs-tested benefits by establishing accounts that may be accessed by recipients electronically, such as through automated teller ma- chines or point-of-sale terminals; and (ii) does not include employment-related payments, including salaries and pension, retirement, or unemployment benefits es- tablished by a Federal, State, or local gov- ernment agency. (B) Exemption generally The disclosures, protections, responsibil- ities, and remedies established under this subchapter, and any regulation prescribed or order issued by the Bureau in accordance with this subchapter, shall not apply to any electronic benefit transfer system estab- lished under State or local law or adminis- tered by a State or local government. (C) Exception for direct deposit into recipi- ent’s account Subparagraph (B) shall not apply with re- spect to any electronic funds transfer under an electronic benefit transfer system for a deposit directly into a consumer account held by the recipient of the benefit. (D) Rule of construction No provision of this paragraph— (i) affects or alters the protections oth- erwise applicable with respect to benefits established by any other provision 3 Fed- eral, State, or local law; or (ii) otherwise supersedes the application of any State or local law. (3) Fee disclosures at automated teller ma- chines (A) In general The regulations prescribed under para- graph (1) shall require any automated teller machine operator who imposes a fee on any consumer for providing host transfer serv- ices to such consumer to provide notice in accordance with subparagraph (B) to the consumer (at the time the service is pro- vided) of— (i) the fact that a fee is imposed by such operator for providing the service; and Page 1647 TITLE 15—COMMERCE AND TRADE § 1693b (ii) the amount of any such fee. (B) Notice requirement The notice required under clauses (i) and (ii) of subparagraph (A) with respect to any fee described in such subparagraph shall ap- pear on the screen of the automated teller machine, or on a paper notice issued from such machine, after the transaction is initi- ated and before the consumer is irrevocably committed to completing the transaction. (C) Prohibition on fees not properly dis- closed and explicitly assumed by con- sumer No fee may be imposed by any automated teller machine operator in connection with any electronic fund transfer initiated by a consumer for which a notice is required under subparagraph (A), unless— (i) the consumer receives such notice in accordance with subparagraph (B); and (ii) the consumer elects to continue in the manner necessary to effect the trans- action after receiving such notice. (D) Definitions For purposes of this paragraph, the fol- lowing definitions shall apply: (i) Automated teller machine operator The term ‘‘automated teller machine op- erator’’ means any person who— (I) operates an automated teller ma- chine at which consumers initiate elec- tronic fund transfers; and (II) is not the financial institution that holds the account of such consumer from which the transfer is made. (ii) Electronic fund transfer The term ‘‘electronic fund transfer’’ in- cludes a transaction that involves a bal- ance inquiry initiated by a consumer in the same manner as an electronic fund transfer, whether or not the consumer ini- tiates a transfer of funds in the course of the transaction. (iii) Host transfer services The term ‘‘host transfer services’’ means any electronic fund transfer made by an automated teller machine operator in con- nection with a transaction initiated by a consumer at an automated teller machine operated by such operator. (e) Deference No provision of this subchapter may be con- strued as altering, limiting, or otherwise affect- ing the deference that a court affords to— (1) the Bureau in making determinations re- garding the meaning or interpretation of any provision of this subchapter for which the Bu- reau has authority to prescribe regulations; or (2) the Board in making determinations re- garding the meaning or interpretation of sec- tion 1693o–2 of this title. (Pub. L. 90–321, title IX, § 904, as added Pub. L. 95–630, title XX, § 2001, Nov. 10, 1978, 92 Stat. 3730; amended Pub. L. 104–193, title VIII, § 891, title IX, § 907, Aug. 22, 1996, 110 Stat. 2346, 2350; Pub. L. 106–102, title VII, § 702, Nov. 12, 1999, 113 Stat. 1463; Pub. L. 111–203, title X, §§ 1073(a)(2), 1084(1), (3), July 21, 2010, 124 Stat. 2060, 2081; Pub. L. 112–216, § 1, Dec. 20, 2012, 126 Stat. 1590.) Editorial Notes REFERENCES IN TEXT Section 1693o of this title, referred to in subsec. (a)(1), was in the original ‘‘section 917’’, and was translated as meaning section 918 of Pub. L. 90–321 to reflect the probable intent of Congress and the renumbering of sec- tion 917 of Pub. L. 90–321 as section 918 by Pub. L. 111–24, title IV, § 401, May 22, 2009, 123 Stat. 1751. AMENDMENTS 2012—Subsec. (d)(3)(B). Pub. L. 112–216, in subpar. heading, substituted ‘‘requirement’’ for ‘‘requirements’’ and, in text, substituted ‘‘The notice required under clauses (i) and (ii)’’ for ‘‘(i) ON THE MACHINE.—The notice required under clause (i) of subparagraph (A) with respect to any fee described in such subparagraph shall be posted in a prominent and conspicuous location on or at the auto- mated teller machine at which the electronic fund transfer is initiated by the consumer. ‘‘(ii) ON THE SCREEN.—The notice required under clauses (i) and (ii)’’ and struck out ‘‘, except that during the period begin- ning on November 12, 1999, and ending on December 31, 2004, this clause shall not apply to any automated tell- er machine that lacks the technical capability to dis- close the notice on the screen or to issue a paper notice after the transaction is initiated and before the con- sumer is irrevocably committed to completing the transaction’’ after ‘‘completing the transaction’’. 2010—Pub. L. 111–203, § 1084(1), substituted ‘‘Bureau’’ for ‘‘Board’’ wherever appearing in subsecs. (b) to (d). Subsec. (a). Pub. L. 111–203, § 1084(3)(A), substituted ‘‘Prescription by the Bureau and the Board’’ for ‘‘Pre- scription by Board’’ in heading that had been supplied editorially and substituted initial pars. (1) and (2), re- lating to the Bureau’s prescription of rules and author- ity of the Board, for first sentence of former introduc- tory provisions which read as follows: ‘‘The Board shall prescribe regulations to carry out the purposes of this subchapter.’’ Second sentence of former introductory provisions was redesignated as concluding provisions of par. (2) to reflect the probable intent of Congress. Subsec. (c). Pub. L. 111–203, § 1073(a)(2), inserted ‘‘or remittance transfers’’ after ‘‘electronic fund transfers’’. Subsec. (e). Pub. L. 111–203, § 1084(3)(B), added subsec. (e). 1999—Subsec. (d)(3). Pub. L. 106–102 added par. (3). 1996—Subsec. (d). Pub. L. 104–193, § 907, which directed the amendment of subsec. (d), was not executed because of similar amendment by Pub. L. 104–193, § 891. See below. Section 907 of Pub. L. 104–193 provided that sub- sec. (d) was to be amended by inserting subsec. (d) heading, by designating existing provisions as par. (1) and inserting heading, and by adding a new par. (2) reading as follows: ‘‘(2) STATE AND LOCAL GOVERNMENT ELECTRONIC BEN- EFIT TRANSFER PROGRAMS.— ‘‘(A) EXEMPTION GENERALLY.—The disclosures, pro- tections, responsibilities, and remedies established under this subchapter, and any regulation prescribed or order issued by the Board in accordance with this subchapter, shall not apply to any electronic benefit transfer program established under State or local law or administered by a State or local government. ‘‘(B) EXCEPTION FOR DIRECT DEPOSIT INTO RECIPI- ENT’S ACCOUNT.—Subparagraph (A) shall not apply with respect to any electronic funds transfer under an electronic benefit transfer program for deposits di- rectly into a consumer account held by the recipient of the benefit. ‘‘(C) RULE OF CONSTRUCTION.—No provision of this paragraph may be construed as— ‘‘(i) affecting or altering the protections other- wise applicable with respect to benefits established by Federal, State, or local law; or Page 1648 TITLE 15—COMMERCE AND TRADE § 1693c 1 So in original. Probably should be ‘‘that’’. ‘‘(ii) otherwise superseding the application of any State or local law. ‘‘(D) ELECTRONIC BENEFIT TRANSFER PROGRAM DE- FINED.—For purposes of this paragraph, the term ‘electronic benefit transfer program’— ‘‘(i) means a program under which a government agency distributes needs-tested benefits by estab- lishing accounts to be accessed by recipients elec- tronically, such as through automated teller ma- chines, or point-of-sale terminals; and ‘‘(ii) does not include employment-related pay- ments, including salaries and pension, retirement, or unemployment benefits established by Federal, State, or local governments.’’ Pub. L. 104–193, § 891, designated existing provisions as par. (1), inserted subsec. heading and par. (2), and sub- stituted ‘‘If’’ for ‘‘In the event that’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by section 1073(a)(2) of Pub. L. 111–203 ef- fective 1 day after July 21, 2010, except as otherwise provided, see section 4 of Pub. L. 111–203, set out as an Effective Date note under section 5301 of Title 12, Banks and Banking. Amendment by section 1084(1), (3) of Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employ- ees. § 1693c. Terms and conditions of transfers (a) Disclosures; time; form; contents The terms and conditions of electronic fund transfers involving a consumer’s account shall be disclosed at the time the consumer contracts for an electronic fund transfer service, in ac- cordance with regulations of the Bureau. Such disclosures shall be in readily understandable language and shall include, to the extent appli- cable— (1) the consumer’s liability for unauthorized electronic fund transfers and, at the financial institution’s option, notice of the advisability of prompt reporting of any loss, theft, or unau- thorized use of a card, code, or other means of access; (2) the telephone number and address of the person or office to be notified in the event the consumer believes than 1 an unauthorized elec- tronic fund transfer has been or may be ef- fected; (3) the type and nature of electronic fund transfers which the consumer may initiate, in- cluding any limitations on the frequency or dollar amount of such transfers, except that the details of such limitations need not be dis- closed if their confidentiality is necessary to maintain the security of an electronic fund transfer system, as determined by the Bureau; (4) any charges for electronic fund transfers or for the right to make such transfers; (5) the consumer’s right to stop payment of a preauthorized electronic fund transfer and the procedure to initiate such a stop payment order; (6) the consumer’s right to receive docu- mentation of electronic fund transfers under section 1693d of this title; (7) a summary, in a form prescribed by regu- lations of the Bureau, of the error resolution provisions of section 1693f of this title and the consumer’s rights thereunder. The financial institution shall thereafter transmit such summary at least once per calendar year; (8) the financial institution’s liability to the consumer under section 1693h of this title; (9) under what circumstances the financial institution will in the ordinary course of busi- ness disclose information concerning the con- sumer’s account to third persons; and (10) a notice to the consumer that a fee may be imposed by— (A) an automated teller machine operator (as defined in section 1693b(d)(3)(D)(i) of this title) if the consumer initiates a transfer from an automated teller machine that is not operated by the person issuing the card or other means of access; and (B) any national, regional, or local net- work utilized to effect the transaction. (b) Notification of changes to consumer A financial institution shall notify a consumer in writing at least twenty-one days prior to the effective date of any change in any term or con- dition of the consumer’s account required to be disclosed under subsection (a) if such change would result in greater cost or liability for such consumer or decreased access to the consumer’s account. A financial institution may, however, implement a change in the terms or conditions of an account without prior notice when such change is immediately necessary to maintain or restore the security of an electronic fund trans- fer system or a consumer’s account. Subject to subsection (a)(3), the Bureau shall require subse- quent notification if such a change is made per- manent. (c) Time for disclosures respecting accounts ac- cessible prior to effective date of this sub- chapter For any account of a consumer made acces- sible to electronic fund transfers prior to the ef- fective date of this subchapter, the information required to be disclosed to the consumer under subsection (a) shall be disclosed not later than the earlier of— (1) the first periodic statement required by section 1693d(c) of this title after the effective date of this subchapter; or (2) thirty days after the effective date of this subchapter. (Pub. L. 90–321, title IX, § 905, as added Pub. L. 95–630, title XX, § 2001, Nov. 10, 1978, 92 Stat. 3730; amended Pub. L. 106–102, title VII, § 703, Nov. 12, 1999, 113 Stat. 1464; Pub. L. 111–203, title X, § 1084(1), July 21, 2010, 124 Stat. 2081.) Editorial Notes REFERENCES IN TEXT For effective date of this subchapter, referred to in subsec. (c), see section 921 of Pub. L. 90–321, set out as an Effective Date note under section 1693 of this title. AMENDMENTS 2010—Subsecs. (a), (b). Pub. L. 111–203 substituted ‘‘Bureau’’ for ‘‘Board’’ wherever appearing. 1999—Subsec. (a)(10). Pub. L. 106–102 added par. (10).