CFPB Issues Compliance Bulletin on Preauthorized Electronic Payments; Oral Recordings Acceptable

This week the Consumer Financial Protection Bureau (CFPB) issued a Compliance Bulletin (Bulletin 2015-06) concerning the Electronic Fund Transfer Act (EFTA) and Regulation E requirements for obtaining a consumer’s authorization for preauthorized electronic fund transfers (EFT). The Bulletin also outlines the CFPB’s compliance expectations.

The CFPB issued the Compliance Bulletin to remind entities of their obligations under the Electronic Fund Transfer Act (EFTA) and Regulation E when obtaining consumer authorizations for preauthorized electronic fund transfers (EFTs) from a consumer’s account. The Bulletin makes note of CFPB observations that some entities may not fully comply with the requirements imposed by EFTA and Regulation E or may be uncertain of their obligations under EFTA and Regulation E, as well as the intersections between Regulation E and the Electronic Signatures in Global and National Commerce Act (E-Sign Act).

The Bulletin summarizes the current law, highlights relevant supervisory findings, and articulates the CFPB’s expectations for entities obtaining consumer authorizations for preauthorized EFTs to help them ensure their compliance with Federal consumer financial law. The following are highlights from the Bulletin.

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