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Training on Reg E - Checks are Covered?

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Question: 
I am in the process of preparing training materials for Reg E and I reviewed the PowerPoint presentation that I found in the <a href="http://www.bankersonline.com/tools/tools.html#Regulatione">Reg E section of the BOL Tools</a>. It states that a "covered transaction" is one that is "initiated by check". Is this correct? I thought this was a non-covered transaction.
Answer: 

This requires a little explanation. In the past, the rule of thumb was that if the withdrawal originated on paper it was exempted from Reg E but the coverage rules under Section 205.3(b)(2) tell us that checks used to initiate a one-time transfer (electronic check conversion) are included. The check itself never enters the payment stream. It was simply the access device used for the transaction.

First published on BankersOnline.com 1/15/07

First published on 01/15/2007

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