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EFTA Reg E Payment Regulation

United States

1978

Payments

Overview

The Electronic Fund Transfer Act (EFTA), implemented through Regulation E by the Consumer Financial Protection Bureau (CFPB), was enacted in 1978 to protect consumers engaging in electronic fund transfers (EFTs). It governs transactions such as ATM withdrawals, debit card payments, direct deposits, and peer-to-peer transfers.
The regulation applies to banks, credit unions, payment service providers, fintech apps, and electronic wallet platforms. It establishes rights and responsibilities for both consumers and financial institutions, focusing on error resolution, liability limits for unauthorized transactions, and required disclosures.

Key Obligations

Provide clear and accurate disclosures before and after EFT services begin
Limit consumer liability for unauthorized transfers to $50 if reported within 2 business days
Investigate and resolve reported errors within 10 business days (with possible extension)

Offer receipts for electronic transactions and periodic account statements
Ensure real-time fraud monitoring and notification for suspicious activity
Extend protections to prepaid accounts, digital wallets, and P2P payment apps

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FAQ

What types of transactions are covered under Reg E?

ATM transfers, debit card purchases, direct deposits, and mobile payments are included.

How long does a bank have to resolve a reported EFT error?

Generally, within 10 business days, or up to 45 days if provisional credit is issued.

Are fintech apps covered by Reg E?

Yes, if they offer prepaid accounts, digital wallets, or facilitate EFTs on behalf of consumers.

What happens if a consumer delays reporting an unauthorized transaction?

Liability increases beyond $50 if not reported within 2 days, and up to full loss after 60 days.