QUESTION: Does Regulation E place any restrictions on lenders in connection with one-time electronic fund transfers (EFTs)?
ANSWER: Regulation E establishes specific requirements for preauthorized EFTs, which are automated payments that the consumer authorizes to take place on a recurring basis. However, it does not impose authorization requirements for one-time EFTs.
QUESTION: Should lenders obtain written authorization from the consumer for each one-time debit card payment even though Reg E doesn’t impose any requirements upon lenders for one-time EFTs? What about one-time payments by ACH?
ANSWER: We recommend obtaining written authorizations whenever possible. We also recognize that obtaining written authorizations is not always practical. Fortunately, Regulation E does not require written authorization for one-time EFTs, so lenders are free to take alternative approaches to obtaining authorization for one-time EFTs.
While Regulation E does not impose requirements in connection with one- time ACH transactions, lenders should be aware of National Automated Clearing House Association (NACHA) requirements. The NACHA Operating Rules require that all one-time (and recurring) ACH debit entries (except ARC, BOC, RCK and single-entry TEL entries) be authorized in writing.
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