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#61143 - 02/13/03 06:15 PM Reg E initial disclosures
AuditorK Offline
Platinum Poster
Joined: Feb 2003
Posts: 962
PA
If we open a checking or savings account and no ATM or debit card is requested, shouldn't we provide an electronic funds transfer disclosure anyway, since the possibility of future preauthorized transfers exists? If this approach is not taken, we would have to send an EFT disclosure when the first preauthorized transfer would take place - correct?

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Operations Compliance
#61144 - 02/13/03 06:28 PM Re: Reg E initial disclosures
John Burnett Offline
10K Club
John Burnett
Joined: Oct 2000
Posts: 40,086
Cape Cod
I agree with you on this. This addresses the possibility -- no, the likelihood -- that your customer will find some way to access the account electronically even if he doesn't go through your bank first.
  • Exxon/Mobil Speedpass
  • Direct deposit of almost anything
  • Direct debit for tax payments
  • Subscriptions
  • Internet purchases
  • the list goes on . . .


But you still should provide disclosures if the customer actually signs up for something with the bank, like Internet banking, bill payment, ATM/debit card, etc.
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John S. Burnett
BankersOnline.com
Fighting for Compliance since 1976
Bankers' Threads User #8

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#61145 - 02/13/03 07:28 PM Re: Reg E initial disclosures
Retired DQ Offline
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Retired DQ
Joined: Dec 2002
Posts: 40,766
Turnpike Exit 10
We give them to everyone, for every thing, all of the time,
including loans & passbook accounts, etc. Between online banking and ACH, it
is almost inevitable that at some point there will be electronic
activity.
It's part of our New Account brochure package.
_________________________
Get your facts first, then you can distort them as you please. - Mark Twain

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#61146 - 02/14/03 03:16 AM Re: Reg E initial disclosures
Andy_Z Online
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Andy_Z
Joined: Oct 2000
Posts: 27,748
On the Net
I too believe in the disclosure rule. It is easier. But be mindful of the change notice and "proximity" time-frame mentioned in the OSC.

§205.7 Initial disclosures.
1. Early disclosures. Disclosures given by a financial institution earlier than the regulation requires (for example, when the consumer opens a checking account) need not be repeated when the consumer later enters into an agreement with a third party who will initiate preauthorized transfers to or from the consumer’s account, unless the terms and conditions differ from those that the institution previously disclosed. On the other hand, if an agreement 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.
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AndyZ CRCM
My opinions are not necessarily my employers.
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#61147 - 02/14/03 04:31 PM Re: Reg E initial disclosures
complylady Offline
Platinum Poster
complylady
Joined: Jul 2002
Posts: 614
Michigan
We too provide the disclosures at account opening. However due to the 'close proximity rule" you mentioned, we again provide them when applicable new services are contracted for. It is easier to provide again on a routine basis, and training staff to always provide disclosures. Otherwise we would be expecting staff to determine when disclosures were provided and if it was 'close proximity'. Safer to overdisclose.

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#61148 - 02/14/03 04:46 PM Re: Reg E initial disclosures
Anonymous
Unregistered

Thanks everyone for the help. This forum is a great source of information and opinion! I'm glad to be a new user.

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