Federal Regulation D - aka Federal Limit on Electronic Transfer

This bugger limits the number of electronic transaction on savings and money market accounts to six transfers per month per account.

What qualifies as an electronic transfer?

  • Online, overdraft, telephone and preauthorized transfers
  • Checks clearing each month from any savings or money market account.
  • Faxes, ACH Debits, money market checks.

Basically, most type of transactions where you are not present. You can still make unlimited number of transfer through these methods:

  • Mail, ATM, and good old in-person visit to the branch

A regulation to keep in mind when you money money to and from your savings account, especially those utilizing high-yield online savings account. In many instances, it’s not a physical limit; thus, you may actually exceed the six transfer limit unintentionally and have your account suspended or closed.

Check 21 - aka Check Clearing for the 21st Century Act

Enacted in Oct 28 of 2003 and went into affect on Oct 28 of 2004 , this semi-complicated bugger allows recipient of paper check (banks) to create a digital version, eliminating the need for the recipient to keep the actual paper check. The whole point was to create a more efficient check truncation.

How does it affect you?

  • Most of you already know this. You won’t be able to get your original paper checks back because your banks aren’t keeping them anymore.
  • Contrary to what some banks claim, checks you write will generally clear faster than before. The funny part is that banks aren’t required to speed up the time they make funds available in your account from the checks you deposited. Thus, don’t write checks unless the funds are already in your account.
  • If you need to have checks back, you can request substitute checks from your bank for a fee. You should shop around to find a reasonable fee on substitute checks.
  • In the case of an error where a check was paid twice or with an incorrect amount, you can request a “recredit” to your account within 10 days and receive a refund of up to $2,500.

If you don’t write a lot of checks, Check 21 probably hasn’t affected you much. If you still write a lot of check for various amounts to numerous payees, you really should examine your bank’s Check 21 process, and request substitute checks for the added protection in case of error.

EFT Act - aka Electronic Funds Transfer Act

Implemented way back in 1978 (and in my opinion requiring some amendment), this law establishes the rights and liabilities of consumer, as well as the responsibilities of all participants in EFT activities (financial institutions).

What falls under electronic fund transfer?

  • ATM and POS (point of sale) transactions (debit/check card at grocery store).
  • Preauthorized and telephone transfers.

What happens when there is an error?

  • You must report the error no later than 60 days from the date of the statement containing the error (write or call).
  • The financial institution must promptly investigate the error and resolve it in 45 days. Errors involving new accounts, POS and foreign transactions may take up to 90 days.
  • If it takes longer than 10 days for the investigation to resolve, the financial institution must recredit the amount in question while it finishes its investigation.
  • The financial institution must report the result of the investigation to you and correct the error (make the recredit final) or in the case when there is no error, explain to you in writing and inform you of any amount deducted from the recredit.

Lost or Theft of ATM/Debit Card?

  • Your loss is limited to $50 if you notify the financial institution within 2 business days.
  • Loss may be up to $500 if you don’t notify the institution within 2 business days.
  • If loss is not reported within 60 business days, the liability could be unlimited (eek).

Your liability under federal law for the use of your ATM or debit card depends on how quickly you report the loss — an often mention difference between debit and credit cards.

For credit cards, under the Fair Credit Billing Act, yourmaximum liability for unauthorized charge is $50. If you report the card lost before its used, you cannot be held responsible for any unauthorized charges. To add, if the loss involves your credit card number but not the actual card itself, you have no liability for unauthorized use.

On the flip side, debit/check cards generally have additional protection with them from the bank that issue them (e.g., Bank of America’s Zero Liability Protection), or the zero liability that comes with a VISA and MasterCard check card. Of course, credit cards usually have these additional protection too (even if they don’t need them).

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