What is Regulation E?

Regulation E protects individual customers using electronic funds transfers (EFT). Non-consumer accounts are not protected by Regulation E.

What is an EFT?

An EFT is any transfer of funds that is initiated through an electronic terminal, telephone, computer, or magnetic tape for the purpose of ordering, instructing, or authorizing a financial institution to debit or credit a consumer's account. The term includes but is not limited to:

  • Point of sale transfers
  • Automated teller machine transfers
  • Direct deposits or withdrawals of funds
  • Transfers initiated by telephone
  • Transfers resulting from debit card transactions, whether or not initiated through an electronic terminal
  • Transfers initiated through internet banking and bill pay transactions, with the exception of transactions for which your vendor completes the transaction with a paper check.  Customers are notified which bill pay transactions are completed with checks.

How does Regulation E apply to a consumer using Online Banking and/or BillPay?

Regulation E is a consumer protection law for accounts such as checking or savings, established primarily for personal, family, or household purposes. Non-consumer accounts, such as Corporation, Trust, Partnerships, LLCs, etc., are excluded from coverage. Regulation E provides consumers a means to notify their financial institution that an EFT has been made to their account without their permission. If you are unsure if your account is protected by Regulation E contact us.

What protections are provided to consumers using Online Banking and/or BillPay?

If you believe an unauthorized transaction has been made to your account notify us at least 60 days after we send the FIRST statement on which the error occurs. If you fail to notify us within the 60 days, you may be liable for any transfers that occur after the 60 days and before you notify us.

What is the no liability limit?

Unlimited loss to a consumer account can occur if all of the following criteria are met:

  • The periodic statement you receive reflects an unauthorized transfer of money from your account.
  • You don’t report the unauthorized transfer to the bank within 60 days after the statement was mailed.
  • The loss could have been avoided if you had given timely notice.

How does Regulation E apply to a non-consumer using Online services?

A non-consumer using Online Banking and/or BillPay is not protected under Regulation E. Because the customer is not protected by Regulation E special consideration should be made by the customer to review the controls in place to ensure that they are commensurate of the risk level that the customer is willing to accept.