Request for Comment on a Proposal to Amend Regulation E (Electronic Fund Transfer) - District Notice

ll★KFederal Reserve Bank of Dallas2200 N. PEARL ST.DALLAS, TX 75201-2272September 22, 2004Notice 04-64TO: The Chief Executive Officer of eachfinancial institution and others concernedin the Eleventh Federal Reserve DistrictSUBJECTRequest for Comment on a Proposal to Amend Regulation E(Electronic Fund Transfer)DETAILSThe Board of Governors of the Federal Reserve System has requested publiccomment on a proposal to amend Regulation E, which implements the Electronic Fund TransferAct. The proposal would also revise the official staff commentary to the regulation. Thecommentary interprets the requirements of Regulation E to facilitate compliance primarily byfinancial institutions that offer electronic fund transfer services to consumers.Proposed revisions to the regulation would address its coverage of electronic checkconversion services and those providing the services. Among other things, persons, such asmerchants and other payees, that make electronic check conversion services available toconsumers would have to obtain a consumer’s authorization for the electronic fund transfer. Inaddition, the regulation would be revised to provide that payroll card accounts establisheddirectly or indirectly by an employer on behalf of a consumer for the purpose of providingsalary, wages, or other employee compensation on a recurring basis are accounts covered byRegulation E. Proposed commentary revisions would provide guidance on preauthorizedtransfers, ...