Pub. 9 2019 Issue 1

19 ISSUE 1. 2019 Now onto the Prepaid Accounts Rule Amendments (Amendments) – arguably one of the more major regulations to hit in 2019. The Amendments touch upon four areas: (1) the final effective date of the rule’s provisions; (2) error resolution and limited liability under Reg. E; (3) digital wallets; and (4) minor clarifications and adjustments. The final effective dates set out by the Amendments place the en- tirety of the rule becoming effective on April 1, 2019. In regards to error resolution and limited liability, the Amendments provide that banks are not required to follow the liability nor error resolution provisions on unverified prepaid accounts other than on payroll card accounts or governmental benefit accounts. Further, for later-veri- fied prepaid accounts, financial institutions are not required to follow those same provisions on disputed transactions that occurred before verification. The Amendments, for digital wallets, provide an exclusion for business relationships between prepaid account issuers and issuers of traditional credit cards from the definition of “business partner.” This would, in turn, exempt the arrangements from the hybrid prepaid credit card rules. Lastly, the Amendments make edits to both Regula- tion E and Regulation Z to correct typos, provide for more consistency between the rule and the regulations, and to correct other minor over- sights. Again – the effective date for these change is April 1, 2019. Finally, the Reg. CC amendments add a presumption and clarify the scope in disputes involving substitute/electronic checks and alterations/ unauthorized signatures. The presumption addition may be summa- rized as follows: when an original (paper-based) check is not available for inspection, it shall be presumed that a substitute or electronic check was altered in certain situations. It should be noted, however, that the breadth of the presumption is fairly limited. In conclusion, 2019 will pack quite a punch. Compliance Alliance can help you keep track of these changes, though. One tool we highly recommend is the Regulatory Change Management Tracker: https://www.compliancealliance.com/find-a-tool/tool/regulato- ry-change-management-tracker – It is updated regularly and lists out major provisions of which banks should be aware. w Sarah Sauceda , Associate General Counsel Sarah serves as Associate General Counsel for Com- pliance Alliance. She is an Honors Program grad- uate who graduated summa cum laude from Lamar University in Beaumont, Texas where she received her bachelor’s degree. While at Baylor Law School, Sarah heavily studied the financial aspects of the law—focusing her attention on secured transactions and the Uniform Commercial Code. Before coming to Compliance Alliance, she worked at Frost Bank within their Credit Administration Department. As an attorney with Compli- ance Alliance, Sarah is eager to help members with their compliance and regulatory questions What to Expect w Continued from page 17