Ask the Experts: Does Reg E apply to one-time payments?

Does Reg E apply to one-time EFTs?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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Tags: ACH, Ask the Experts, Debit Cards, EFTs, NACHA, Reg E

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