Microsoft PowerPoint - 2021 Deposit Day 2 [Compatibility Mode]• Business Day: Open for substantially all business functions
• Electronic Terminal:
• POS terminal
• Unauthorized Transfer
• No actual authority (permission)
• No benefit to consumer
• Exclusions:
• Transfers between a consumer and the bank
• Between consumer’s accounts at bank
• From consumer’s account to family member’s account
• From consumer’s account to bank’s account
• Transfers of funds initiated by phone (not bill pay plan)
• Preauthorized transfer if bank under $100 million
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• Otherwise, no liability for consumer
DISCLOSURES
• Initial Disclosure: At time consumer contracts for EFT or before first EFT
• Change in Terms: Detrimental effect? If so 21 days notice
• Error Resolutions Notice: Annual notice or statement notice
• Disclosures by ATM Operators: Charge a fee? Disclose on ATM screen or paper
before fee customer is committed
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• Terminal Receipts: At time of EFT at ATM
• Periodic Statements: For each month EFT occurs or quarterly if no EFT
• Passbook Accounts (only EFT is preauthorized credit): No statement if amount
entered when passbook presented or separate document provided
• Non-passbook (only EFT is preauthorized credit): Quarterly statements
• Payroll Card Accounts: Alternative procedures available
PREAUTHORIZED TRANSFERS
Credits to a Consumer’s Account
• EFT from the same payor at least once every 60 days
• Bank’s responsibility to either • Provide notice of credit
• Orally or in writing within 2 days of transfer date or date it should have happened
• Provide a phone number customer can call **
Transfers from a Consumer’s Account
• Payee responsibility
• Must be authorized by a writing signed or similarly authenticated by the consumer
• Provide copy to consumer
• Bank does not violate Reg. E if payee does not comply
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STOP PAYMENT Oral Notice w/in 3 days of transfer (no written confirmation)
• Oral Notice
• Transfer Date
• 15th day: Stop Payment no longer binding
Written notice w/in 3 days of transfer or confirmation w/in 14
• Written Notice or Oral
• Forever
OVERDRAFTS
• Bank may pay overdrafts at bank’s
discretion
• No opt-in required
• Bank may pay overdrafts at bank’s discretion
• Bank may only charge a fee if customer affirmatively opts in
• Fee prohibition includes: • One-time fee
• Sustained overdraft fee
• Daily overdraft fees
• Provide Model Form A-9 to customer
• Provide a reasonable opportunity for customer to opt-in • Fill out form
• Call number
• Use website
• Obtain the consumer’s affirmative consent • No “grouping” disclosures and signatures
• No pre-filled forms
• Provide consumer with written confirmation • “Affirmative Consent notice”
OPT-IN NOTICE
• Must contain • Description of overdraft service and types of transactions incurring a fee
• Description of right to opt in to payment for ATM and one time debits
• Policies on payment of overdrafts for checks, ACH and preauthorized
• Indicate if bank pays overdraft at its discretion
• Amount of fees and maximum fees: per item, daily overdraft, etc
• Explanation of how the customer can opt in
• Alternative methods: LOC or link to savings (both if offered)
• Only permitted modification: Right to revoke, opt out of ACH/check
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AFFIRMATIVE CONSENT NOTICE
Copy of Opt-In Notice • Model Form A-9 does not contain the
revocation statement
at any time”
Separate Form • Must include following statement:
• “You have the right to revoke the opt in
at any time”
PROCEDURES FOR RESOLVING ERRORS: DEFINITION OF ERROR
• An unauthorized EFT
• An incorrect EFT
• Computation or bookkeeping error
• An improperly described EFT
to customer w/in
• 10 business days
Extended • If you
• Notify the customer within 2 business days after crediting
• Allow consumer unconditional use of funds
• Then must investigate and send results w/in
• 45 calendar days
NOTICE
Oral (no written confirmation) • Investigate and report result w/in 10 business days or
• May take advantage of extended time frames
• Do not need to provide provisional credit
• Must investigate and send results to consumer within
• 45 days
• EVEN IF CONSUMER NEVER FILLS OUT ANY FORMS
Written (or oral with confirmation)
• Investigate and report result w/in 10 business days or
• Provide provisional credit and notice of provisional credit
• May take advantage of extended time frames
• Must investigate and send results to consumer within • 45 days
• 90 days for POS or foreign
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RESOLUTION
• Notify customer within 3 days of
investigation being completed
No Error/ Different Error • Mail notice to customer w/in 3 days of
investigation being completed
• Written explanation must include • consumer's right to request the documents that the
institution relied on in making its determination
• Did you also debit provisional credit? Then notice must include • Date and amount of debiting
• That the bank will honor checks, drafts, preauthorized transfers for 5 business days
LIABILITY FOR UNAUTHORIZED TRANSFERS: LOST OR STOLEN ACCESS DEVICE
Tier 1 • Notification within 2 business days of
discovery of theft/loss
• $50; or
occur before notification
theft/loss
• Sum of
• Tier 1 • $50; or
• Amount of unauthorized transfers
• The amount of unauthorized transfers after 2 business days but before notification
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LIABILITY FOR UNAUTHORIZED TRANSFERS: PERIODIC STATEMENT
Notifies bank w/in 60 days • Not liable for any transfers made within
60 days of periodic statement
transmittal
Doesn’t notify bank until >60 • Not liable for any transfers made within
60 days of periodic statement
transmittal
61st day until institution is notified
PAYROLL CARD ACCOUNTS
• Electronic history of account transactions; and
• Written history if requested
• Payroll error resolution notice
• Modified Annual Error Resolution Notice • Annually or with electronic or written history
• Liability adjusted to reflect alternative to periodic statement
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• Disclosures prior to purchase
• Dormancy, inactivity, service fee and when/how /how much will be charged
• Expiration date for underlying funds
• Toll-free number for replacement cards
• Statement explaining expired card but remaining funds
• Disclosures on or with card
• Certain disclosures must be on the card itself
• Fees, expiration date, phone number, statement
• Prepaid accounts have model disclosures
REMITTANCE TRANSFERS
• Sent by an RTP
• RTP is a person or business providing remittance transfers in the normal course of business
Safe Harbor • Bank does not provide remittance
transfers in normal course of business if
• Provided 100 or fewer in the previous
calendar year
• Transition period: If you exceed 100 you
have 6 months to comply
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• Receipt
Combined disclosure • Combined disclosure
• Proof of payment
REMITTANCE TRANSFER OTHER ISSUES
• Error Resolution
• Sender must notify RTP within 180 days after disclosed date of availability
• RTP has 90 days after notice to report results and remedies to sender
• Remedies usually include refund or redelivery
• Transfers Scheduled in Advance
• Regulation contains specific rules
• Definition of an account
– Transaction accounts vs. Savings accounts
• Consult State Law and your disclosures on coverage for savings accounts
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REQUIRED AVAILABILITY
• Generally, items deposited to transaction accounts must be made available either the next business day or the second business day following the banking day of deposit.
• Banking Day - The bank is open to the public for carrying on substantially all of its banking functions.
• Business Day - A calendar day other than a Saturday or Sunday or holiday observed by the Federal Reserve
• Calculation: Deposits are made on banking days. Hold periods are calculated in business days.
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• Next-Day Availability Bank - These institutions make funds available faster than
required by regulation.
• Maximum Hold Bank or Delayed Availability Bank -These institutions routinely delay
the availability of any deposited item to the extent permitted by the regulation.
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• Delayed availability banks do not use
• Allow funds to be held up to the maximum period allowed under the regulation
• Customer notice required
• Used in conjunction with case-by-case hold to limit cash withdrawals
• $225 still available next day
• $450 may be delayed until 5:00 pm on second business day
• Remainder of deposit available for cash withdrawal start of 3rd business day
• Example: $2,000 check
• $450 available 5:00 2nd business day
• $1,325 available start of 3rd business day
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• This amount may be delayed until the 7th business day
• May be combined with case-by-case hold
• Example
• $6,000 personal check and $3,000 insurance check deposited = $9,000
• $3,475 delayed until 7th business day (this is the amount over $5,525)
• Delayed availability: $5,300 delayed until 2nd business day, $225 available next business day
• Next-Day: $5,525 available next day unless combined with case-by case hold
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REDEPOSITED CHECKS
• May delay entire amount of deposit until 7th business day under the following
scenario:
• Consumer re-deposits the same check that was returned unpaid
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REPEATED OVERDRAFTS
• Entire amount of deposit may be delayed until the 7th business day
• Tests
• Preceding 6 months = 6 banking days with negative balance
• Preceding 6 months = 2 banking days with negative balance greater than $5,525
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REASONABLE CAUSE TO DOUBT COLLECTIBILITY
• May delay entire amount of deposit until the 7th business day
• “Existence of facts that would cause a well-grounded belief in the mind of a reasonable
person”
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• War
NEW ACCOUNT HOLD
• Applicable for the first 30 calendar days after an account is open
• Provides for specific hold periods
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• Next-Day vs. Delayed Availability
• Preprinted deposit slips • Notice deposits may not be available for immediate withdrawal
• Locations where employees accept deposits • Notice of time periods applicable to availability
• ATMs • Notice deposits may not be available for immediate withdrawal
• Changes to policy • 30 days prior to implementation (or 30 days after if expediting)
CHECK 21 ACT
• “Substitute check”
• The paper reproduction of the original check that contains an image of the front and back
of the original check and can be processed just like the original check.
• Legal equivalent of the original check.
• Consumer awareness disclosure
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RESERVE REQUIREMENTS
• Time Deposit Accounts? No
• Savings Deposit Accounts? No
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• Government units
party
• Transfer to account of same account holder
• Third party transfers
• Unlimited transfers
• In person, by messenger, by mail, at ATM (including transfers between accounts)
• By telephone with check mailed to depositor
• Transfer to repay loan at the same institution
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• Early withdrawal penalties required
• 7 days’ simple interest on amounts withdrawn w/in first 6 days after deposit
• Later penalties optional but recommended for safety and soundness