Skip to content

Reg E Compliance

Answered by: 

What are the major changes that financial institutions need to make in order to be Reg E compliant as of January 1st?

The changes to Reg E that require compliance by financial institutions by January 1, 2007, include revisions to initial disclosures designed to inform consumers that electronic check conversions (ECKs) are EFTs that they may authorize against their accounts. The model clauses and forms appendix to the regulation includes several changes that should be incorporated into your disclosures. Look in particular at model clauses A-2(a), (b), and (d). In addition, if your disclosures did not previously include ECKs as a form of EFT the consumer could initiate, you should notify your established accounts of that ability.

If your institution converts to EFTs checks it receives for loan payments, safe deposit rent or other obligations to the bank, the bank needs to comply with the new notification requirements included in section 205.3 of the regulation. Most of those requirements were already mandated by NACHA rules. Be sure to read the Official Staff Interpretations of those requirements, too. See new Model Clause A-6 for guidance on wording. Finally, if your institution plans to electronically assess a bounced-item fee on checks returned to you that were for obligations to the bank, in addition to providing for those fees in your contracts, Reg E requires that you provide a notice (see Model Clause A-8) of the fee.

First published on 1/29/07

First published on 01/29/2007

Filed under: 

Banker Store View All

From training, policies, forms, and publications, to office products and occasional gifts, it’s available here:

Banker Store

hot right now

image description

Looking for effective, convenient training on a particular subject?

BOL Learning Connect offers more than 200 courses ON-DEMAND or on CD ROM from AML to Reg Z and every topic in between.

Search Topics