Electronic Fund Transfers Regulations

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Questions and Answers

Under what conditions is a service provider exempt from furnishing the periodic statement required by § 1005.9(b)?

The service provider must notify the consumer of all fees associated with the debit card.

The consumer has agreed to receive electronic statements only.

The consumer is issued a policy of insurance.

The debit card includes the service provider's name and an address for inquiries. (correct)

What is a required condition regarding notifications for the consumer of the debit card?

The consumer must acknowledge the receipt of each transaction.

The consumer's income must be verified before card use.

The consumer receives a notice concerning use similar to the format in appendix A. (correct)

The consumer must receive a detailed financial report every month.

What information must be included in receipts provided to the consumer according to § 1005.9(a)?

A summary of the consumer's transaction history.

The consumer's balance prior to each transaction.

A breakdown of monthly fees charged.

The address and phone number for reporting errors or lost cards. (correct)

For how long must evidence of compliance with the Act and its requirements be retained?

Two years from the date disclosures are required. (A) Signup and view all the answers

What is the role of federal agencies in relation to compliance with this part of the Act?

They enforce compliance according to section 918 of the Act. (A) Signup and view all the answers

Which type of account is established through a third party and exclusively loaded with disaster relief payments?

Qualified disaster relief account (A) Signup and view all the answers

What characterizes a 'financial institution' as defined in the content?

It must hold consumer accounts or issue access devices (A) Signup and view all the answers

Which regulation excludes certain persons from coverage under section 1029?

Dodd-Frank Wall Street Reform and Consumer Protection Act (C) Signup and view all the answers

What is required for a 'preauthorized electronic fund transfer' under the provided definitions?

It needs prior consumer authorization for recurring transfers (B) Signup and view all the answers

Which term refers to a card that is specifically labeled and marketed for gifting purposes?

Gift card (B) Signup and view all the answers

Which entity is NOT considered a 'person' under the provided definitions?

Inanimate object (D) Signup and view all the answers

What is the primary function of an account established by the U.S. government on military installations?

Conduct closed-loop transactions (D) Signup and view all the answers

Which type of card falls under the term 'loyalty, award, or promotional gift card'?

Promotional offer card (D) Signup and view all the answers

What must a consumer provide when stopping payment of a preauthorized electronic fund transfer?

Written documentation confirming the request (A) Signup and view all the answers

What does the term 'error' refer to in the context of electronic fund transfers?

An unauthorized electronic fund transfer (A) Signup and view all the answers

Which of the following actions can a financial institution require from a consumer after reporting an error?

Give written confirmation within 10 business days (C) Signup and view all the answers

Which statement accurately describes a limitation on consumers regarding stopping payments?

Consumers can be required to have a specific type of account to stop payments (D) Signup and view all the answers

In the case of an incorrect electronic fund transfer, what information might a consumer need to provide?

The type, date, and amount of the error (A) Signup and view all the answers

What condition must NOT be imposed when a consumer requests to set up electronic fund transfers?

Demonstrating past income stability (C) Signup and view all the answers

Which of the following best describes the purpose of the requirements outlined for reporting errors?

To safeguard the rights of consumers in financial transactions (B) Signup and view all the answers

What should a consumer do if they notice an error after a transaction?

Contact the financial institution immediately (C) Signup and view all the answers

What requirement must a government agency comply with regarding the location of the statement about disclosures?

Directly below any statements disclosed pursuant to 1005.18(b)(3)(i) and (ii), or above the statement required by 1005.18(b)(2)(x) (B) Signup and view all the answers

What form must the information disclosed by the agency take when provided in writing or electronically?

A table containing the required information (B) Signup and view all the answers

Which section outlines the initial disclosures that must be modified by the agency?

§ 1005.7(b) (D) Signup and view all the answers

What information is specifically required to be provided to the consumer in case of error resolution?

A phone number to report errors directly (A) Signup and view all the answers

Which statement correctly reflects the error resolution requirements for the agency?

It must comply with § 1005.11 for oral or written error notifications (D) Signup and view all the answers

What type size must be used for the statement regarding the variable fee information?

The same type size used for disclosures in § 1005.18(b)(3)(i) and (ii) (A) Signup and view all the answers

What is required when the agency modifies disclosures under § 1005.18?

To provide clear access to account information (A) Signup and view all the answers

How must the agency handle requests for electronic account history according to the content provided?

They must include a phone number to request this information (D) Signup and view all the answers

What is the time frame for a financial institution to provisionally credit a consumer's account upon receiving notice of an alleged error?

Within 10 business days (D) Signup and view all the answers

What must a financial institution disclose regarding overdraft fees for ATM and debit card transactions?

The maximum fee that may be imposed and the basis for such fees. (B) Signup and view all the answers

Under which condition can a financial institution withhold a maximum of $50 from the provisionally credited amount?

If there is no agreement with a third party for the type of electronic fund transfer (C) Signup and view all the answers

How can consumers jointly holding an account affect the consent for overdraft services?

Only one consumer's consent is sufficient for all others. (D) Signup and view all the answers

What is required of consumers regarding the right to opt-in for overdraft services?

Consumers are allowed to revoke their opt-in at any time. (B) Signup and view all the answers

What must occur for an error notice to be considered valid regarding the timing of the periodic statement?

It must be received no later than 60 days after statement issuance (D) Signup and view all the answers

What information is a financial institution required to provide to consumers regarding overdraft services?

The dollar amount of fees for each overdraft transaction type included. (C) Signup and view all the answers

What is required for an institution to avoid provisionally crediting a consumer's account?

Receipt of a written confirmation of the error (A) Signup and view all the answers

What happens if a financial institution determines that an error occurred but in a different manner or amount than described by the consumer?

It must provide a written explanation to the consumer (A) Signup and view all the answers

What is indicated about the limits on overdraft fees imposed by financial institutions?

Institutions may optionally set a maximum number of fees per day. (A) Signup and view all the answers

For a consumer opting into overdraft services, what must be clarified about the types of transactions covered?

Specific types of transactions must be listed and acknowledged. (D) Signup and view all the answers

Which of the following is NOT a reason that a financial institution might determine there is no error?

The institution has not properly credited the account (B) Signup and view all the answers

Which statement regarding the handling of alleged errors is true?

Written confirmation must be received within a specific period (A) Signup and view all the answers

What criteria can be used by financial institutions to determine overdraft charges?

The frequency and amount of overdrafts. (A) Signup and view all the answers

Under what condition does the institution NOT need to provisionally credit the consumer’s account?

There is no written confirmation requested by the institution (A) Signup and view all the answers

What is true about the notice provided to consumers regarding overdraft options?

Consumers should be informed of fees prior to opting in. (B) Signup and view all the answers

Study Notes

Definitions and Procedures for Resolving Errors in Electronic Fund Transfers

Financial Institution: A bank, savings association, credit union, or similar entity handling consumer accounts, issuing access devices, and providing electronic funds transfer services. Excludes certain entities excluded by law.
Person: A natural person or an organization (corporation, government agency, etc.).
Preauthorized Electronic Fund Transfer: An electronic fund transfer authorized in advance to recur regularly.
Error: Unauthorized electronic fund transfers, incorrect transfers or omissions from statements, or computational/bookkeeping errors on a consumer's account.

Consumer Rights Regarding Errors

Stopping Payment: Consumers can stop preauthorized electronic fund transfers for employment or government benefits.
Error Notification: A consumer can notify the financial institution of an error within 60 days of receiving a statement or passbook.
Written Confirmation: Financial institutions can request written confirmation of an error within 10 business days of oral notification; they must inform consumers of this requirement and the confirmation address.
Investigating Errors: Financial institution must investigate errors. Must provisionally credit consumer account for the alleged error within 10 business days; may withhold up to $50 if reasonable basis for believing an unauthorized transfer occurred, but requirements of section 1005.6 are met.
No error determination: If the institution determines no error occurred or a different error occurred, a written explanation should be provided.

Additional Information

Gift Certificates, Store Gift Cards, Loyalty Cards: Defined types of cards specifically excluded.

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Description

This quiz covers key definitions and procedures related to errors in electronic fund transfers. Learn about consumer rights, notifications regarding errors, and actions that can be taken to resolve issues with financial institutions. Strengthen your understanding of the regulations governing electronic financial transactions.