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We are having an internal discussion to determine whether Reg. E covers internal transfers between deposit accounts. §1005.3(c) states an EFT does not include
(5) Automatic transfers by account holding institutions. Any transfer of funds under an agreement between a consumer and financial institution which provides that the institution will initiate individual transfers without a specific request from the consumer
(i) Between a consumer’s accounts within the financial institution.

If this is the case, then a customer who wishes to set up an internal preauthorized transfer the bank does not need to comply with the regulation with regards to the written authorization for preauthorized transfers from a consumer’s account (§1005.10(b)) as this “transfer” is excluded from coverage. This sounds really odd and not correct. Are we missing something?

Although not governed by the Reg E requirement for obtaining a written authorization, the transfer is still governed by your account agreement which stipulates how customers may withdraw funds from their account. That's the document you need to review to see if a signature is required. (If it doesn't legal counsel will likely recommend that you revise it so that it does.)

Brian, thank you we will review the language in our Agreement concerning signature requirements.