CFPB Bulletin On Preauthorized Electronic Fund Transfers

The Consumer Financial Protection Bureau (CFPB) issued a Bulletin clarifying its expectations for entities under the Electronic Fund Transfer Act (EFTA) and Regulation E when they are obtaining consumer authorizations for preauthorized electronic fund transfers (EFTs) from a consumer's account, including electronic authorization under the Electronic Signatures in Global and National Commerce Act (E-Sign Act). Preauthorized EFT refers to an "electronic fund transfer authorized in advance to recur at substantially regular intervals."

Compliance with EFTA and Regulation E has been the focus of supervisory examinations and enforcement actions brought by the CFPB, as well as at least one nonpublic supervisory appeal in which findings by examination staff were overturned because of a misapplication of the rules by examiners.