On July 16, the Sixth Circuit held that the Federal Electronic Funds Transfer Act (EFTA) does not provide for an implied right of indemnification or contribution, and preempts indemnification claims under the Michigan Electronic Funds Transfer Act (“MEFTA”) and common law, when a bank reimburses customers for unauthorized electronic transfers, even if the unauthorized transfers were caused by the entity from which indemnification is sought.… Continue Reading
electronic fund transfer act
Plaintiffs file memorandum opposing FDIC’s motion to dismiss challenge to NSF fee guidance
By Kristen E. Larson on
On February 14, 2024, the Minnesota Bankers Association and Lake Central Bank (the “Plaintiffs”) filed their memorandum in opposition to the Federal Deposit Insurance Corporation’s (FDIC) motion to dismiss their challenge to the FDIC’s supervisory guidance on NSF fees.
In June 2023, the Plaintiffs filed a complaint seeking declaratory and injunctive relief under the Administrative Procedures Act (APA) against defendants FDIC and Chairman Martin J.… Continue Reading
CFPB issues compliance bulletin on application of EFTA compulsory use prohibition to government benefits
By Ronald K. Vaske on
The CFPB has issued a compliance bulletin “to reiterate that the compulsory use prohibition in the [Electronic Fund Transfer Act (EFTA)] applies to government benefit accounts, as defined in Regulation E.”
In the bulletin, the CFPB reviews what constitutes a “government benefit account” subject to the EFTA’s compulsory use prohibition. As implemented by Regulation E, the EFTA provides that no person may require a consumer to establish an account for receipt of an electronic fund transfer (EFT) with a particular financial institution as a condition of receipt of a government benefit. … Continue Reading
CFPB updates electronic fund transfers FAQs
By Jennifer E. Aguilar on
Posted in CFPB, Regulatory and Enforcement
Last month, the CFPB updated its Electronic Fund Transfers FAQs that address compliance with the Electronic Fund Transfer Act (EFTA) and Regulation E. The FAQs provide guidance on Regulation E’s coverage and on the error resolution requirements, with the bulk of the new questions focusing on person-to-person (P2P) payment providers and P2P transfers.… Continue Reading
Vermont federal district court rules CFPA does not provide private right of action for alleged usurious loans; denies motion to dismiss EFTA claim
By Ballard CFS Group on
Posted in Electronic Payments, Regulatory and Enforcement
A Vermont federal district court recently issued a decision ruling on the defendants’ motion to dismiss a class action involving allegations that an online tribal lending venture violated federal and state law because of alleged usurious interest rates and other allegedly unlawful features. The decision discusses a wide array of procedural issues, including the enforceability of the arbitration provisions in the plaintiffs’ loan agreements.… Continue Reading
CFPB issues compliance bulletin on preauthorized electronic payments
By Ballard CFS Group on
Posted in Electronic Payments, Regulatory and Enforcement
The CFPB has issued a compliance bulletin (Bulletin 2015-06) concerning the Electronic Fund Transfer Act (EFTA) and Regulation E requirements for obtaining a consumer’s authorization for preauthorized electronic fund transfers (EFT) and the CFPB’s compliance expectations. The bulletin was accompanied by the CFPB’s publication of sample letters a consumer can use in connection with preauthorized EFTs, including to revoke his or her authorization.… Continue Reading