There isn't much on the forum about popmoney. I'm confused as to whether popmoney is an EFT under 1005.3 and subject to the disclosure requirements under 1005.7, change in terms/error resolution under 1005.8 and .11, and periodic statements under 1005.9? Or, is this a transaction covered under 1005.14 where the service provider gives the disclosures, conducts the error resolution, etc.? Is anyone familiar with this? Thanks for your input!

It would be no different than a debit or credit hitting an account to or from PayPal.

Sorry rlcarey... meaning what? If a debit card is used for PayPal, we, the bank, are required to give the EFT disclosures about the debit card. Since there is no card involved with the popmoney transaction, who has to give the EFT disclosures, conduct the error resolution, etc.?

Agree with Randy if the person registers their account directly with PopMoney. However, some internet banking service providers integrate PopMoney directly into the internet banking platform so if I use my bank provided access device to initiate the transfers. In these circumstances, PopMoney should be included in the description of the types of available transfers along with any dollar limitations that you impose. If my internet banking credentials are hacked and fraudulent transfers sent, the bank must investigate, provide provisional credit, etc.

Here in the Midwest I had a number of clients who had the FDIC starting an exam by levying level 2 findings into the exam report as soon as they saw PopMoney because the default disclosures that PopMoney directed the consumer to call PopMoney directly and the FDIC found that PopMoney was not resolving claims timely or providing provisional credit timely. Additionally the default PopMoney disclosures stated that a consumer had 60 days from the date of the transaction to report an error instead of 60 days from the delivery of the statement.

This last came up over a year ago so hopefully vendors have corrected their language, but if your institution if offering PopMoney, it is certainly worth reviewing before your next exam.

Brian, we integrate popmoney into our internet banking platform but customers can use their internet banking or smart phone to conduct the popmoney transaction. So, it sounds as though popmoney transactions need to be included in our EFT Disclosures just like ATM transactions, etc., and we are responsible for error resolution as well?

Yes, you are. You can elect to allow PopMoney to handle disputes on your behalf, but your Third Party Risk Management program should be very strong to ensure that PopMoney fully complies with the requirements. Your institution will bear the brunt of any non-compliance penalties. Many of my clients elect to accept the dispute themselves and handle all the customer communication and use their back office to deal with PopMoney rather than making the customer to minimize their regulatory risk.

Thank you for the clarification Brian... and sorry about the confusion. Not understanding how the transaction "operates" added to the confusion but I think I have it now. Thanks again.

Does the institution need to specifically add language that says "person-to-person" and "mobile banking" to its EFT Agreement or can the disclosure be more generic such as:

“Electronic fund transfer” or “EFT” means any transfer of funds that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account.

based on some of the things i am hearing the CFPB come after banks for, i would suggest being as specific as possible and every single type of transfer be listed

Quoting the Reg, especially if you add, "to include but not limited to..." you're fairly safe. Adding this to a model form is pretty safe, but it depends on what you do with it as well. What you define must be clear, not just a broad definition, but ensure it excludes what should be.

This is one of those "if it was easy, monkeys would be doing it" issues. That's why we get the big bucks.

https://www.bankersonline.com/regulations/12-1005-003

Thank you Happy and Andy.