Stopping Preauthorized Payments

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Question:

We currently have outside counsel providing what I believe is inaccurate guidance. However, I'm struggling to find resources I can use to refute their regulatory interpretations. Specifically, this applies to a consumer's right to stop payment under 1005.10(c). Can you please advise how these requirements apply to: 1. Preauthorized transfers for loan payments (we are the lender/servicer) drawn on both external (we obtain debit authorization) and internal deposit accounts; and 2. Preauthorized bill payments both issued against the bank's/vendor's account and debited directly from the consumer's account. We hold the consumer's deposit account and offer the bill pay service.

Answer:

Without knowing what the regulatory interpretation that has been presented to you might be, how do we know what you are trying to dispute?

Any internal transfers from a consumer's asset account to make a loan payment at the same institution is exempt from coverage under 1005.3(c)(5)(iii).