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The Consumer Financial Protection Bureau (CFPB) recently issued Supervisory Highlights, Issue 22 (Summer 2020) reporting on examiner findings related to federal consumer protection regulations.
One of the examiner findings involves the Electronic Funds Transfer Act (EFTA) and Regulation E and the waiving of consumers’ error resolution rights. Examiners found financial institutions required consumers to sign deposit account agreements stating the consumers would “cooperate” with the institution’s investigation of any errors filed by the consumer. The “cooperation” included providing affidavits and notifying law enforcement authorities.
The EFTA states “no writing or other agreement between a consumer and any other person may contain any provision which constitutes a waiver of any right conferred or cause of action created by this subchapter.” Under the EFTA and Regulation E, consumers have a right to have their claims of error investigated if their notice of error meets certain criteria, which does not include agreeing to “cooperate” with the financial institution’s error investigation. Financial institution investigate errors are subject only to the requirements set forth in the EFTA and Regulation E. By requiring consumers to “cooperate” with Regulation E error investigations and provide information beyond what is required in EFTA and Regulation E, the financial institutions’ agreements contained provisions waiving consumers’ rights in violation of EFTA.
For more information on EFTA and Regulation E requirements, contact Doeren Mayhew’s regulatory compliance specialists.
This publication is distributed for informational purposes only, with the understanding that Doeren Mayhew is not rendering legal, accounting, or other professional opinions on specific facts for matters, and, accordingly, assumes no liability whatsoever in connection with its use. Should the reader have any questions regarding any of the news articles, it is recommended that a Doeren Mayhew representative be contacted.
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