Based on the Regulation (shown below): If a consumer states they did not initiate a transfer through 'home banking' to a separate account holder (family member at same Financial Institution), would regulation E exclude the transaction from coverage? Specifically, what does 'specific request' (shown red) mean? Is a home banking transfer a specific request?

What happens if the consumer states they were not the one who set up the home banking application? That would take away an accepted access device (user/pass - credentials). It also takes away the 'agreement between a consumer and a financial institution' (shown blue).

Any help understanding this would be great.

(c) Exclusions from coverage. The term electronic fund transfer does not include: (5) Automatic transfers by account-holding institution. Any transfer of funds under an agreement between a consumer and a financial institution which provides that the institution will initiate individual transfers without a specific request from the consumer: (ii) From a consumer's account to an account of a member of the consumer's family held in the same financial institution;

The home banking transfer is a specific request. What 1005.3(c)(5) is getting at is standing transfers, such as a weekly transfer to Junior's account (Junior's away at school). It could even include auto-transfers for overdraft coverage. But if a separate request (by phone, written or home banking) has to be made, the exclusion doesn't apply.

Thanks John, I appreciate the help.

If your customer is on both accounts and is making a claim, that may cloud the issue as well since they had ownership in the funds even after the transfer was made. If there is suspected fraud, I'd hope you've told the customer to change logon credentials and that each person should have unique credentials and not be sharing.

For future reference, ensure you stay on the current reg and not an outdated one just in case there is a change.

http://www.bankersonline.com/regs/12-1005/12-1005-000.html