Reg E Periodic Statements and EFT

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Question:

Is there something in writing from the Federal Reserve and/or the CFPB that supports the comment in this<a href="http://www.bankersonline.com/operations/guru2012/gurus_op011612a.html "> Q and A</a> on Reg E periodic statement requirements? The Iowa Bankers Association, our compliance liaison from the Federal Reserve, and all other sources I can find seem to disagree with this point of view. They say the IF an account CAN be accessed by an EFT, regardless of whether it actually is, that at a minimum quarterly statements have to be provided (and also for each month when an EFT occurs).

Answer:

Since I penned the answer you're referring to, it seems only right that I should comment on your "challenge."

The regulation specifically says "For an account to or from which electronic fund transfers can be made, a financial institution shall send a periodic statement for each monthly cycle in which an electronic fund transfer has occurred; and shall send a periodic statement at least quarterly if no transfer has occurred."

If I were a compliance officer at a bank that doesn't set accounts up for statements until the consumer completes or authorizes an EFT, I'd use the argument that an EFT cannot be made unless a consumer authorizes it, so authorization can be the trigger for statements, if an examiner were taking me to task.

If I were that examiner, I'd suggest (see how polite I would be as an examiner?) that "can" means that it's possible, and since it's possible that any consumer savings or transaction account will be hit with an EFT, your bank should set all such accounts for quarterly statements at minimum.

Given the ease with which a consumer can provide an EFT authorization (often without even knowing it, such as when writing a check), I guess I shouldn't get hung up over splitting hairs, so I'll say, "Just DO it!"

First published on BankersOnline.com 7/30/12