In regards to the subsequent issuance of an access device would the following meet the regulatory requirement for Reg E disclosure?

"In case of errors or questions regarding an Online Services transaction, call ABC Bank immediately at xxx-xxx-xxxx or toll-free 1-800-XXX-XXX, 8:00 a.m. to 5:00 p.m., Monday through Thursday and 8:00 a.m. to 6:00 p.m. on Friday. For more information, refer to the Electronic Funds Transfer Disclosure found on our website."

Bump

It really depends on whether this access device represents a new product or service for which the customer has contracted.

From the commentary to 1005.7 "...if an agreement for EFT services to be provided by an account- holding institution is directly between the consumer and the account-holding institution, disclosures must be given in close proximity to the event requiring disclosure, for example, when the consumer contracts for a new service."

If you are just replacing a debit card because my old one expired, I am not contracting for a new service and no redisclosure is needed.

In regards to debit cards, the Reg E disclosure is provided at account opening regardless of whether the customer requests a card at that time. If the customer requests a card at a later date currently we provide a Reg E disclosure however I was wondering if we could provide the following instead of the full disclosure. I have included Online Services transaction because I would like to recommend using the same language in our online banking agreement as well to address similar situations regarding subsequent access device requests.

"In case of errors or questions regarding your Debit card or Online Services transaction, call ABC Bank immediately at xxx-xxx-xxxx or toll-free 1-800-XXX-XXX, 8:00 a.m. to 5:00 p.m., Monday through Thursday and 8:00 a.m. to 6:00 p.m. on Friday. For more information, refer to the Electronic Funds Transfer Disclosure found on our website."

If you provide Reg E disclosures at account opening and six months later (timeframe arbitrary) I request internet banking or a debit card, the "close proximity" statement in the commentary means you owe me a full set of disclosures. Since I do not want to get into a semantics argument with my examiners regarding the definition of close proximity, six months, six weeks, six days, doesn't really matter, I'm providing a full EFT disclosure with the request for a new service.

Agreed. Thank you.

I've had that discussion with my examiners in the past and it is an undefined term. Suffice it to say you can give a lot of Reg E disclosures more cheaply than you and management can argue a point. I've always favored, "here's your new card, here's the disclosures..." This is especially so if when I opened my account I didn't want a card, 6 months later I do. First, do you think I read the disclosures you gave me 6 months ago, and do you think I even glanced at one that was for a product I refused? My point is, even if a consumer DID read what you gave them, they wouldn't spend time reading the ones that had no association at the time to what they were getting.

First, do you think I read the disclosures you gave me 6 months ago . . .
Do I think you'll read them now?

We listened to Jerrod's webinar yesterday and this question came up during and in the Q & As, so I'll beat the dead horse one more time.

I’m going to play Devil’s Advocate and do not necessarily lean one way or another, but it seems that the commentary has a big hole in it. Here goes…..

Utilizing a service for the first time and a new service are not the same thing and the commentary refers to “NEW” service.

Right or wrong & from a legal/contractual perspective, the customer utilizing Bill Pay service 6 months down the line would not be a new contract for service. The customer already contracted with the bank for this service/feature and many more when opening the account. If the bank added Bill Pay as a new service and it was not on the original disclosure, then it would be a new contract for service and disclosures would apply.

Can anyone provide a history lesson, or is everyone just in acceptance mode?


What do they say...Don't Complain About What You Do Not Like - Change It

IMHO it could work against you to provide Reg. E disclosures to a customer who begins utilizing a service that was requested and previously disclosed (properly, of course). Call me pessimistic, but I could see an over-zealous auditor or examiner questioning why you waited until the service was utilized to disclose, which by then is too late and becomes a "guilty until you prove yourself innocent" situation.

A service might be available, but when did they sign the Bill-Pay agreement? I assume that you have one? Debt cards are available to all at account opening also - but the act of issuing them one is the provision of the access device.

Yes, we do have a separate BP agreement, but several people are asking if it would be prohibited to provide the agreement at account opening?

I could go out online to the bill pay screen and accept the BP agreement then still not utilize the service for several weeks/months/years. Wouldn't I need to get the agreement disclosure each time I go in to use BP in order to cover the "close proximity" interpretation just in case I was just checking it out and then decided not to use the service?

Just trying to cover all the bases from a logical point of view in order to answer questions from the powers that may be.
HA banking regulations....logical.

Hope you don't mind I borrowed your disclaimer and modified it. That's a great idea!

------------------
The opinions and discussions transmitted in this forum should not be interpreted to be those of my employer and are meant to explore a more in depth understanding of regulatory requirements pertaining to the banking industry.

I see bill pay as no different than a debit card. I might have one - I may never use it - but if I did two years down the road you don't send me a new disclosure. I have had the access device the whole time.

Thank you, Randy for the insight. Sorry it took me so long to respond, as I'm in annual Risk Assessment mode. Have a great Fall.

At account opening, a customer must choose whether to "opt-in" (authorize the bank to pay POS transactions into overdraft) or "opt-out" (requesting these transactions be declined at the terminal). This is clearly disclosed at account opening. If the debit card is lost/stolen/expired do we need to have them choose again? Based on this discussion, we don't have to re-disclose.

The opt-in/out under § 1005.17 of Regulation E is a choice concerning how the cardholder's account is handled with regard to card-related transactions, not about the card itself. Replacement of a card that's lost, stolen or expired does not affect the consumer's opt-in/out status under § 1005.17.

Apparently, we've been issuing a new Reg E disclosure every time a card is ordered or re-ordered for whatever reason. That's a lot of paper! If the account holder was provided with the massive Reg E disclosure at account opening, do they ever need it again?

We are required to provide a disclosure in "close proximity" if a customer contracts for a new service, such as requesting a debit card or internet banking for the first time. A new disclosure is not required when providing a replacement card due to expiration or loss of a previously requested card.

The problem is can they differentiate between issuing a replacement card and issuing a new card to an existing account holder which it is not in "close proximity". Many banks can't and they therefore include a new disclosure with each card that they issue.

Being an undefined term, "close proximity" meant about 5 minutes in my bank.

- No question of compliance.
- A $.03 disclosure.
- One less thing to keep me up at night after an examiner questioned us about it and there was no good or right answer at the time.