FDIC Compliance TE - Reg E UPDATED ACTUAL Questions
and CORRECT Answers
Electronic fund transfer Any transfer of funds that is initiated through an electronic terminal, telephone,
computer, or magnetic tape for the purpose of ordering, instruction, or
authorizing a bank to debit or credit a consumer's account.
Electronic fund transfer using information from a check. This part applies where a check, draft, or similar paper instrument is used as a
source of information to initiate a one-time electronic fund transfer from a
consumer's account.
Collection of returned items via electronic fund transfer The person initiating an electronic fund transfer to collect a fee for the return of
an electronic fund transfer or a check that is unpaid, including due to insufficient
or uncollected funds in the consumer's account, must obtain the consumer's
authorization for each transfer.
Exclusions Checks, check guarantee or authorization, wire or other similar transfers, securities
and commodities transfers, automatic transfers, telephone-initiated transfers, small
institutions
Solicited Issuance reason #1 In response to an oral or written request for the device
Solicited Issuance reason #2 As a renewal of, or in substitution for, an accepted device whether issued by the
institution or a successor.
Unsolicited issuance #1 Not validated, meaning that the institution has not yet performed all the
procedures that would enable a consumer to initiate an electronic fund transfer
using the access device
Unsolicited issuance #2 Accompanied by a clear explanation that the access device is not validated and
how the consumer may dispose of it if validation is not desired
Unsolicited Issuance #3 Accompanied by the disclosures required by 1005.7, of the consumer's rights and
liabilities that will apply if the access device is validated
Unsolicited Issuance #4 Validated only in response to the consumer's oral or written request for validation,
after the institution has verified the consumer's identity by a reasonable means
Timely notice given If the consumer notifies the bank within two business days after learning of the
loss or theft of the access device, the consumer's liability shall not exceed the
lesser of $50 or the amount of unauthorized transfer that occur before to the
bank.
Timely notice not given If the consumer fails to notify the bank within two business days, the consumer's
liability shall not exceed the lesser of $500 or the sum of (i) $50 or the amount of
unauthorized transfers that occur within two business days, and (ii) the amount of
unauthorized transfers that occur after the close of two business days and before
notice to the institution
, Periodic statement; timely notice not given If the consumer fails to report an unauthorized EFT that appears on a periodic
statement within 60 days, their liability shall not exceed the amount of the
unauthorized transfers that occur after the close of the 60 days and before notice
to the institution.
Initial disclosures Liability of consumer, telephone number and address, business days, types of
transfer; limitations, fees, documentation, stop payment, liability of institution,
confidentiality, error resolution, ATM fees.
Change in terms notice A bank shall mail or deliver a written notice to the consumer, at least 21 days
before the effective date, if the change would result in increased fees, increased
liability, few types of available EFTs, or stricter limitations on the frequency or
dollar amount of transfers.
Receipt shall include Amount, date, type, identification, terminal location, third party transfer
Periodic statement shall include Transaction information, account number, fees, account balances, address and
telephone number for inquiries, telephone number for preauthorized transfers
Exceptions to periodic statement Preauthorized transfers to accounts and instra-institutional transfers
Documentation for foreign-initiated transfers Does not violate if (1) the transfer is not initiated within a state and (2) the bank
treats an inquiry for clarification or documentation as a notice of error
Exception for receipts in small-value transfers A bank is not subject to the requirement if the amount of the transfer is $14 or less
Preauthorized transfers to consumer's account - Notice Positive notice, negative notice, or readily-available telephone line
by financial institution
Preauthorized transfers to consumer's account - Notice A bank need not provide notice of a transfer if the payor gives the consumer
by payor positive notice that the transfer has been initiated
Preauthorized transfers to consumer's account - A bank that receives a preauthorized transfer shall credit the amount of the
Crediting transfer as of the date the funds are received
Written authorization for preauthorized transfers from Preauthorized EFTs may be authorized only by a writing signed or similarly
consumer's account authenticated by the consumer.
Consumer's right to stop payment - Notice By notifying the bank orally or in writing at least three business days before
scheduled transfer
Consumer's right to stop payment - Written confirmation A bank can require the consumer to give written confirmation within 14 days of an
oral notification. They must inform the consumer of the requirement and provide
the address where confirmation must be sent.
Notice of transfers varying in amount - Notice The payee shall send the consumer written notice of the amount and date at least
10 days before scheduled transfer date
and CORRECT Answers
Electronic fund transfer Any transfer of funds that is initiated through an electronic terminal, telephone,
computer, or magnetic tape for the purpose of ordering, instruction, or
authorizing a bank to debit or credit a consumer's account.
Electronic fund transfer using information from a check. This part applies where a check, draft, or similar paper instrument is used as a
source of information to initiate a one-time electronic fund transfer from a
consumer's account.
Collection of returned items via electronic fund transfer The person initiating an electronic fund transfer to collect a fee for the return of
an electronic fund transfer or a check that is unpaid, including due to insufficient
or uncollected funds in the consumer's account, must obtain the consumer's
authorization for each transfer.
Exclusions Checks, check guarantee or authorization, wire or other similar transfers, securities
and commodities transfers, automatic transfers, telephone-initiated transfers, small
institutions
Solicited Issuance reason #1 In response to an oral or written request for the device
Solicited Issuance reason #2 As a renewal of, or in substitution for, an accepted device whether issued by the
institution or a successor.
Unsolicited issuance #1 Not validated, meaning that the institution has not yet performed all the
procedures that would enable a consumer to initiate an electronic fund transfer
using the access device
Unsolicited issuance #2 Accompanied by a clear explanation that the access device is not validated and
how the consumer may dispose of it if validation is not desired
Unsolicited Issuance #3 Accompanied by the disclosures required by 1005.7, of the consumer's rights and
liabilities that will apply if the access device is validated
Unsolicited Issuance #4 Validated only in response to the consumer's oral or written request for validation,
after the institution has verified the consumer's identity by a reasonable means
Timely notice given If the consumer notifies the bank within two business days after learning of the
loss or theft of the access device, the consumer's liability shall not exceed the
lesser of $50 or the amount of unauthorized transfer that occur before to the
bank.
Timely notice not given If the consumer fails to notify the bank within two business days, the consumer's
liability shall not exceed the lesser of $500 or the sum of (i) $50 or the amount of
unauthorized transfers that occur within two business days, and (ii) the amount of
unauthorized transfers that occur after the close of two business days and before
notice to the institution
, Periodic statement; timely notice not given If the consumer fails to report an unauthorized EFT that appears on a periodic
statement within 60 days, their liability shall not exceed the amount of the
unauthorized transfers that occur after the close of the 60 days and before notice
to the institution.
Initial disclosures Liability of consumer, telephone number and address, business days, types of
transfer; limitations, fees, documentation, stop payment, liability of institution,
confidentiality, error resolution, ATM fees.
Change in terms notice A bank shall mail or deliver a written notice to the consumer, at least 21 days
before the effective date, if the change would result in increased fees, increased
liability, few types of available EFTs, or stricter limitations on the frequency or
dollar amount of transfers.
Receipt shall include Amount, date, type, identification, terminal location, third party transfer
Periodic statement shall include Transaction information, account number, fees, account balances, address and
telephone number for inquiries, telephone number for preauthorized transfers
Exceptions to periodic statement Preauthorized transfers to accounts and instra-institutional transfers
Documentation for foreign-initiated transfers Does not violate if (1) the transfer is not initiated within a state and (2) the bank
treats an inquiry for clarification or documentation as a notice of error
Exception for receipts in small-value transfers A bank is not subject to the requirement if the amount of the transfer is $14 or less
Preauthorized transfers to consumer's account - Notice Positive notice, negative notice, or readily-available telephone line
by financial institution
Preauthorized transfers to consumer's account - Notice A bank need not provide notice of a transfer if the payor gives the consumer
by payor positive notice that the transfer has been initiated
Preauthorized transfers to consumer's account - A bank that receives a preauthorized transfer shall credit the amount of the
Crediting transfer as of the date the funds are received
Written authorization for preauthorized transfers from Preauthorized EFTs may be authorized only by a writing signed or similarly
consumer's account authenticated by the consumer.
Consumer's right to stop payment - Notice By notifying the bank orally or in writing at least three business days before
scheduled transfer
Consumer's right to stop payment - Written confirmation A bank can require the consumer to give written confirmation within 14 days of an
oral notification. They must inform the consumer of the requirement and provide
the address where confirmation must be sent.
Notice of transfers varying in amount - Notice The payee shall send the consumer written notice of the amount and date at least
10 days before scheduled transfer date
