Answer:
If your bill payment program electronically transfers funds from a consumer's account either directly to the consumer's payee or to a central account from which checks are issued (or a combination of those two scenarios), the transactions in the consumer's account will be subject to Regulation E.
If, on the other hand, your bill payment program creates in some cases checks that are drawn upon the consumer's account and sends those checks to the payees, and you properly disclose to the consumer that fact, along with a list of payees or types of payees to whom you send that kind of check, those payments will not be considered electronic fund transfers, and will therefore not be within the scope of Regulation E.
You'll find the Interpretation that covers your question in Supplement I to the regulation. Specifically, look at Interpretation 1(vi) to Paragraph 3(b)(1).
First published on BankersOnline.com 11/27/06
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