EFTA stands for the Electronic Funds Transfers Act. It is a law that was first enacted in 1978 to protect consumers engaging in electronic transfers because impersonal banking was on the rise. Less and less people were going to tellers, and more and more to machines.
EFTA is implemented through Regulation E which was first created by the Board of Governors of the Federal Reserve System. Aside from rules that banks must abide by, it includes official interpretations of EFTA. Regulation E was amended to include prohibiting financial institutions from charging overdraft fees for ATM and one-time debit card transactions. It also created rules restricting fees and expiration dates on gift cards. Generally, EFTA and Regulation E place requirements on financial institutions that hold monetary assets of consumers. Aside from important disclosure requirements, EFTA provides strict protections for consumers when unauthorized, fraudulent, or erroneous transactions occur. Consumers have rights under EFTA to a reasonable investigation into fraudulent or erroneous transfers.
In 2010, the rule making authority was transferred from the Board of Governors to the Consumer Financial Protection Bureau (CFPB). As financial institutions and consumers find new ways to transfer money though electronic means, the CFPB maintains the authority to create new rules to assure consumers are protected.
If you experience an unauthorized, fraudulent, or erroneous electronic transfer out of your account, contact SmithMarco, P.C. for a free case review.