[1] The CFPB has created a website with information and guidance on how to implement the final regulation. The website contains links to documents summarizing key changes to the government`s payroll and benefit accounts, a fact sheet outlining the validity dates of the advance payment rule and related exceptions, and other relevant documents. [2] For the purposes of Regulation E, a financial institution includes any person who directly or indirectly holds a consumer`s account or issues an access device and agrees with a consumer to provide electronic money transfer services, unless the person is excluded from coverage under section 1029 of the Consumer Financial Protection Act, 2010. Title X of the Dodd-Frank Wall Street Reform and Consumer Protection Act (Public Law 111-203, 124 Stat. 1376). In government benefit accounts, a government agency is a financial institution if it directly or indirectly issues an access device to initiate electronic money transfers from the government benefit account. [3] Rule Z troubleshooting procedures may apply in certain situations, depending on the type of prepaid card and available features. Limited liability and troubleshooting, including interim credit. The final regulations extend the limited liability and troubleshooting requirements of Regulation E to all prepaid accounts, whether or not the financial institution has completed its consumer identification and verification process for the account, but does not require interim credit for unaudited accounts.
Once an account has been verified, the financial institution must meet the preliminary credit requirements for errors that occur before and after account verification during the preliminary credit period. For example, if NetSpend`s ACE Flare account (advertisement for the “Optional Debit Card Overdraft Service” with an overdraft fee of $15) and the access card all explained above are prepaid accounts that violate the overdraft fee provisions of the rule, NetSpend may be liable for EFTA and TILA`s damages and attorneys` fees. As explained in the companion article in this issue, “Error Resolution and Limitations of Liability under E&Z Regulations: Regulatory Requirements, Common Violations and Sound Practices,” institutions should not confuse the time required to respond to a non-prepaid debit card troubleshooting request with a consumer`s limits of liability for unauthorized transactions. If notification of unauthorized transactions is received after the above time limit has been triggered, the limitations of liability under section 1005.6 may continue to apply to unauthorized transactions that occurred before the deadline.13 If the consumer has accessed the account history containing the disputed transactions online, but waited more than 60 days to file a dispute, The consumer`s liability depends on whether the unauthorized transaction(s) resulted in the loss or theft of an access device and when the unauthorized transaction(s) occurred. In 2018, the office changed the rule to change the troubleshooting and liability limits for prepaid accounts that are not government pay or benefit cards, the effective date to 1. April 2019 and make other changes.3 A consumer can keep cash, debit and credit cards, GPR cards and gift cards in a physical wallet or purse. “Digital wallets” and “mobile wallets” (i.e., digital wallets that a consumer can access through a mobile device such as a smartphone) also store one or more information about the consumer`s payments electronically. [79] This payment data is accessible to the consumer via a website or mobile application. Our Office understands that some, but not all, digital and mobile wallets allow a consumer to store funds directly or by funding a prepaid product and retrieve the stored funds. A 2015 board survey suggests that digital wallets are a major source of funding for mobile payments (i.e. consumer payment for goods and services via mobile phones). The survey found that 15% of mobile payment users reported using an account with a non-financial institution as a PayPal to fund their payments.
[80] 2 See 12 C.F.R. §1005.2(b)(3)(i). Prior to the 2016 plan, government pay cards and benefit cards were already covered by Regulation E. The 2016 rule changed some of these requirements and classified both cards as prepaid accounts. Therefore, the 2016 prepaid account rule should be interpreted as amending existing requirements for payroll cards and government benefit cards, while creating new protections for other categories of prepaid accounts.
