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Electronic Fund Transfer Act 
Source: Encyclopedia of Banking & Finance (9h Edition) by Charles J Woelfel
(We recommend this as work of authority.)

Title XX of the FINANCIAL INSTITUTIONS REGULATORY AND INTEREST RATE CONTROL ACT OF 1978, which was signed by the President on November 10, 1978 (P.L. 95-630).  It became effective 18 months after enactment except for its provisions on consumer liability and unsolicited card distribution, which became effective 90 days after enactment.

The Board of Governors of the Federal Reserve System summarized the following provisions of the act, among others:

1.  Requires disclosure of the terms and conditions of electronic fund transfers
     (defined to exclude, among other things, wire transfers of funds, telephone
     transfers not pursuant to an agreement, and transfers made pursuant to an
     automatic transfer service program) at the time the consumer contracts for an
     electronic fund transfer (EFT) service.

2.  Requires that the consumer be afforded written documentation for each fund
     transfer made from an electronic terminal, notice as to whether preauthorized
     transfers were completed, and a periodic statement of account.

3.  Requires financial institutions to establish procedures for correcting errors for
     electronic fund transfers.

4.  Provides limitations on the maximum liability of a consumer for unauthorized
     transfers from his or her account, subject, in part, to whether the consumer
     reports to the financial institution within prescribed time periods either
     unauthorized transfers appearing on the periodic account statement or the loss
     or theft of an electronic fund transfer card.  (Note:  A consumer who notifies the
     issuer within two business days of learning that a card has been lost or stolen
     can be held liable for no more than $50.  A consumer who waits longer to notify
     the institution risks liability of up to $500 for losses that occur after the two
     business days.  But to impose such liability greater than $50, the institution must
     establish that the subsequent losses could have been prevented if the consumer
     had given notice within two business days.)

5.  Imposes liability on the financial institution under certain circumstances for all
     damages proximately caused by the institution's failure to make an electronic
     fund transfer or failure to stop payment of a preauthorized transfer when
     instructed to do so in accordance with the terms and conditions of the accounts.

6.  Permits unsolicited distribution only for unvalidated debit cards.

7.  Provides that Title XX does not annul, alter, or affect the laws of any state
     relating to electronic funds transfers, except to the extent that those laws are
     inconsistent with Title XX.

8.  Authorizes the Board of Governors of the Federal Reserve System to exempt
     from coverage electronic funds transfers within any state that imposes
     requirements substantially similar to Title XX.

9.  In connection with promulgating regulations to carry out the act, requires the
     Board of Governors of the Federal Reserve System to prepare a statement on
     economic impact, to issue model clauses to facilitate compliance, and, if
     necessary, to modify its regulations to ease the compliance burden on small
     financial institutions.  (Note:  In the case of an unauthorized EFT that is reflected
     on a periodic statement, a consumer has 60 days from the institution's
     transmittal of a statement to examine it and report any unauthorized transfer,
     and doing so will limit liability of the customer to $50.  But failure to report
     unauthorized transfers occurring after the 60 days have elapsed.

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