We recently had a question regarding whether a non-resident alien, (NRA), could file a Reg E claim. In reading over section 205.3 of the Staff Commentary it references "resident aliens" as covered, but is silent for "non-resident aliens". If the bank offers transaction accounts to NRA, should we even be offering access devices as these transactions would not be covered under Reg E? (They meet the definition of consumer under 205.2(e)(j)). Your assistance is greatly appreciated.

Section 205.3—Coverage
3(a) General
3. Foreign applicability. Regulation E applies to all persons (including branches and other offices of foreign banks located in the United States) that offer EFT services to residents of any state, including resident aliens. It covers any account located in the United States through which EFTs are offered to a resident of a state. This is the case whether or not a particular transfer takes place in the United States and whether or not the financial institution is chartered in the United States or a foreign country. The regulation does not apply to a foreign branch of a U.S. bank unless the EFT services are offered in connection with an account in a state as defined in §205.2(l).

205.1 Authority and purpose
(b) Purpose. This part carries out the purposes of the Electronic Fund Transfer Act, which establishes the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer services and of financial institutions that offer these services. The primary objective of the act and this part is the protection of individual consumers engaging in electronic fund transfers.
205.2 Definitions.
(e) Consumer means a natural person.
(j) Person means a natural person or an organization, including a corporation, government agency, estate, trust, partnership, proprietorship, cooperative, or association.

I read section 205.3 to define the group of “persons” offering accounts that are subject to the EFTA and Regulation E. If a “person” [read: financial institution, as loosely defined in the regulation] offers EFT account services to residents of a state (including resident aliens), and the accounts are consumer asset accounts, the accounts and EFT transactions in them are covered, regardless of which consumers hold the accounts.

My read is that if you're a bank offering accounts to consumers in the U.S., Puerto Rico, or a territory or possession of the U.S., it doesn't matter whether the consumer that owns an account is a citizen, a resident alien, a non-resident alien or even an “undocumented” alien. His or her account is covered.

In other words, I don't believe the definition is meant to define which consumers are protected, but which account providers are covered.

Thank you John!

You might want to review your card issuer agreements also. VISA used to require a license to issue international VISA cards, if cards were issued to non-US citizens.

Assuming if these folks have accounts in the US but are residing outside of the US that they definitely fall outside the requirements of Reg E.

CARM9, I'm not sure I agree. I don't see how you could deny them a claim just because they don't currently reside in the US. JMHO

A non-resident is by definition not a resident of the US or a possession or territory. They are non-residents here because they are residents elsewhere.

You are issuing cards to residents of other countries and need to determine, as Randy mentioned, the rules for doing so.

Living outside the U.S. doesn't mean they aren't protected if the account resides in a U.S. bank in U.S. territory and the bank offers accounts to U.S. residents.