Regulation E
The Federal Reserve regulation implementing the Electronic Fund Transfer Act, which protects consumers in electronic banking transactions.
What is Regulation E?
Regulation E is the Federal Reserve rule that implements the Electronic Fund Transfer Act (EFTA) of 1978, establishing the rights, liabilities, and responsibilities of parties in electronic fund transfer (EFT) transactions. It covers debit card transactions, ATM withdrawals, direct deposits, preauthorized transfers, and point-of-sale transactions. Key consumer protections include: the right to receive disclosures before using EFT services, the right to receive error resolution within specified timeframes (typically 10 business days to investigate), and limited liability for unauthorized transfers (liability capped at $50 if reported within 2 days, $500 within 60 days). Regulation E is administered by the Consumer Financial Protection Bureau (CFPB).
Example
A consumer discovers an unauthorized $800 debit card charge and reports it to their bank within 5 days. Under Regulation E, the bank must complete a provisional credit or investigation within 10 business days and cannot hold the consumer liable for more than $50 for the unauthorized transaction. If the consumer had waited 70 days before reporting, liability could be unlimited for transfers after day 60.