Regulation E Electronic Fund Transfers

The Federal Reserve Board (FRB) has amended Regulation E (Electronic Fund Transfers) to require disclosure of certain automated teller machine (ATM) fees. This amendment stems from the Gramm-Leach-Bliley Act’s amendments to the Electronic Fund Transfer Act. Many ATM operators imposing such fees already disclose fee information to satisfy existing regulatory and network requirements.

As a result of this amendment:

• ATM operators imposing fees for providing an electronic fund transfer (EFT) service or balance inquiry must post a notice in a prominent and conspicuous location on or at the ATM;
• ATM operators must disclose that a fee will be imposed and the amount of the fee, either on the screen of the ATM or on a paper notice, before the consumer is committed to completing the transaction; and
• the credit union must provide initial disclosures when a member contracts for an EFT service, including a notice that a fee may be imposed by (1) an ATM operator not holding the consumer’s account, or (2) any national, regional, or local network used to complete the transaction.

The official FRB staff interpretations of the revised rule provide guidance on:

• interchange system fees,
• display of the transaction fee, and
• specific fee notices.

In an effort to provide adequate time to make any necessary systems changes, mandatory compliance is delayed until October 1, 2001.

The FRB’s amendment, with FRB staff interpretations, is enclosed. A notice describing the FRB’s action and the comments received is available on the FRB’s web site (www.federalreserve.gov/boarddocs/press/boardacts/2001) or from their Public Affairs Department at (202) 452-3204.