Pub. 3 2013 Issue 3

20 www.azbankers.org Question: Regulation E extends investigation time frames to 90 days for POS transactions. Where do eCommerce transactions fit? Are they under the 45 or 90 timelines for investigation? Answer: The clearings of EFTs are subject to Regulation E and the NACHA Rules. The types you may be familiar with include: Accounts Receivable Check (ARC) occurs when a consumer mails a check (e.g., the consumer’s payment of his or her monthly phone bill) to a company that, in turn, converts it to an elec- tronic transaction and clears it through the ACH network. Generally, the bank lists the item on the customer’s monthly statement as an electronic debit item and does not provide an im- age of the item. Point of Purchase (POP) occurs when a check is submitted for an over-the-coun- ter transaction. The cashier swipes the check to capture account information and normally returns the voided check to the check writer, and the transaction is cleared through the ACH or debit card network. Point of Sale (POS) occurs when the customer uses their debit card whether signature based or PIN based. Even if the cardholder was not present at the merchant location, i.e. mail/phone, internet, or mobile device. The investi- gation time for these transactions is 90 days. That being said, eCommerce is not clearly defined, but would generally be grouped in the internet or mobile device transactions, thus being covered under the 90 day timeframe. Question: Our marketing department brought in a marketing piece that advertises one of our checking account products as “Better than Free” because this particular product offers benefits such as merchant discounts, roadside assistance, travel discounts, free internet bank and bill pay, and reimburse- ment for using out of network ATMs. But, there is a monthly service charge assessed to this product. Are there any issues with marketing this product with the tag line – Better than Free? Answer: If there is any type of maintenance fee (monthly service charge) or activity fee, using the word “free” is prohibited Good to Know Banking Q&A under section 1030.8 (Regulation DD). The bank should also inform the mar- keting department that Reg DD also states that an advertisement shall not be misleading or inaccurate. Using the tag line – Better Than Free in this case would not only be prohibited by Reg DD, it would also likely be deemed as unfair and deceptive in nature. Question: We offer an Overdraft Privilege product at our bank, however, we just upgraded our system and the provider is insisting we include the ODP amount as a part of the balance on our ATM receipts. So, my question is: If a customer has Overdraft privilege, is the bank required to print bal- ances on receipts with the privilege as part of the balance? Answer: No, the bank is not required to print balances that include the ODP amount, that being said, Reg DD, section 1030.11(c) states: … if an institution discloses balance information to a con- sumer through an automated system, it must disclose a balance that excludes any funds that the institution may provide to cover an overdraft pursuant to a discretionary overdraft service, that will be paid by the institution under a service subject to Regulation Z (12 CFR Part 1026), or that will be transferred from another account held individually or jointly by a consumer. The balance may, but need not, include funds that are deposited in the consumer’s ac- count, such as from a check, that are not yet made available for withdrawal in accordance with the funds avail- ability rules under Regulation CC of the Board of Governors of the Federal Reserve System (12 CFR part 229). In addition, the balance may, but need not, include funds that are held by the insti- tution to satisfy a prior obligation of the consumer (for example, to cover a hold for an ATM or debit card transaction that has been authorized but for which the bank has not settled). Z