We're reviewing our Error Resolution procedures and customer notifications. The Michigan Electronic Funds Transfer Act defines a customer as both a person and a business entity. It also includes its own Error Resolution requirements. Reg. E commentary to 1005.12(b), has a specific pre-emption for the error resolution section of the Michigan Electronic Funds Transfer Act (488.15). The Reg. E pre-emption would be for consumer customers only. Does anyone operating in MI use separate Error Resolution procedures for your business customers? If yes, do you apply them to ATM, POS, and NACHA transactions? If no, is there a reason you have determined not to apply the MI rules?

Hi lm,

Can you please cite where in the Act that it defines a customer as both a person and a business entity? I went to look up the Act so I could verify our process and this is what I found:

ELECTRONIC FUNDS TRANSFERS (EXCERPT)
Act 322 of 1978
488.3 Definitions; C to E.
Sec. 3.

(2) “Customer” means a person, but does not include a financial institution or a financial institution holding company.

Hi.

You have to go to the definition of a "person." It's so strange how this law is written, the definitions are alphabetically separated into different sections. We had an MI lawfirm confirm that business customers are covered.

Lynn

488.5 Definitions; P to U.

Sec. 5.

(1) “Person” means an individual, sole proprietorship, corporation, partnership, association, joint stock company, trust, or unincorporated organization.

Hi,
Another question regarding Michigan Reg. E. Section 488.16 (see below) requires us to provide credit for "authorized" debit card transactions that the customer disputes. This seems to be so far above and beyond what a bank must refund to it's customers. How are you managing this requirement if you are headquartered of operate in Michigan?

Thanks,
Lynn




488.16 Reversal of electronic fund transfer and recrediting customer's account; requirements; “normal business hours” defined.
Sec. 16.
(1) The financial institutions which are parties to an electronic fund transfer shall reverse an electronic fund transfer initiated by a customer to a third party in payment for goods or services and recredit the customer's account for the full amount of the transfer, if all of the following occur:
(a) The customer provides notice to the financial institution of having made a good faith attempt to seek redress and makes an assurance to the financial institution of return to the third party of related goods in dispute where returnable goods are involved. This does not imply that reversability applies only to goods.
(b) The amount of the transaction is $50.00 or more.
(c) Within 4 calendar days following the transaction, the financial institution receives from the customer during the normal business hours of the financial institution a written or oral request for the reversal.
(d) The customer verifies the reverse order, notice, and assurance in writing within 14 calendar days following oral notification, on a form to be provided by the financial institution for that purpose. If written verification is not furnished, the financial institution shall reinstate the original debits and credits involved in the transaction to the extent of the available account balance.
(2) For the purposes of this section “normal business hours” means that part of any day in which the financial institution is open to the public for carrying on substantially all of its business functions.

History: 1978, Act 322, Eff. Jan. 1, 1979