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Reg E - Periodic Statements

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We are looking for some clarification on Reg E - 205.9 on periodic statements. In section (a) it talks about what is required on the receipt from a merchant, then in (b) when it is talking about the periodic statements, the requirement (v) says the name of any third party to or from whom funds were transferred. We have several merchants in the area that are passing just an address in the field captured by the core product and not putting an actual name. Is the merchant, such as ABC Company, considered the third party, and is the company name required on the statement? The item appears with date, amount, terminal ID number, location, but does not necessarily say the business name.

If you are describing a POS entry, where funds pass from the customer's account to the merchant, the merchant's name (either corporate name or d/b/a name) must appear. There are a number of ways that can work. It need not be separately given if it is already listed as part of the terminal location, for example.

However, there is some wiggle room in the Official Staff Interpretations (Commentary) to section 205.9(b). Specifically, Comment 1 to section 205.9(b)(1) - Transaction information, says "While financial institutions must maintain reasonable procedures to ensure the integrity of data obtained from another institution, a merchant, or other third parties, verification of each transfer that appears on the periodic statement is not required." That doesn't say you don't have to be concerned about the merchant name, but it does suggest that if it's missing from time to time you shouldn't pull your hair out over it.

In my experience most merchants were passing all the needed information along, but there are a number of systems that touch POS entries, especially those that are signature-based. Each of those systems has its own template for location data, and when they don't all agree on field locations and definitions, things can get dropped out. If you are consistently missing specific information from location records, contact your servicer with specific examples and ask for help in getting the correct data. At least have a copy of such a request in your files, and you should be all right with your examiners.

First published on 6/22/09

First published on 06/22/2009

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