FRB Proposes Amendments to Regulation E Affecting Payroll Cards and ECK Transactions

The FRB requested public comment on certain proposed amendments to Regulation E ("Reg E"), which implements the Electronic Funds Transfer Act ("EFTA"), and to Reg E’s official commentary. Among other things, the proposed revisions to Reg E would provide: (1) guidance regarding the rights, liabilities, and responsibilities of parties engaged in electronic check conversion ("ECK") transactions and (2) that payroll card accounts are "accounts" covered by Reg E. In addition, the proposal addresses: (a) the issuance of multiple renewal or substitute credits cards; (b) error resolution; (c) preauthorized transfers, e.g., the withdrawal of the Reg E commentary that a tape-recorded authorization is not sufficient for preauthorized transfers; and (d) ATM surcharge disclosures. Currently, ECK transactions are covered by the EFTA and Reg E if the consumer authorizes the transaction as an electronic fund transfer ("EFT"). The proposed amendments would revise Reg E to include within the