The Clearing House has released a white paper that analyzes the application of the Electronic Fund Transfer Act (EFTA) and Regulation E (Reg E) error resolution requirements to financial institutions involved in certain person-to-person (P2P) transactions.

The white paper aims to provide additional information for the financial institutions involved in an Intermediated Transfer – the sender’s bank and the transfer provider – and to help supplement the Frequently Asked Questions (FAQs) issued by the Consumer Financial Protection Bureau (CFPB) in June and December 2021 regarding the EFTA and its implementing regulation, Reg E.

The TCH white paper provides additional information and clarity on several issues related to the application of Reg E, including:

• How Intermediated Transfers involve two different financial institutions (FIs) and two separate transactions
• How FIs involved in Intermediated Transfers each have responsibilities when it comes to investigating and resolving errors
• How the scope of those responsibilities vary and the type of error asserted matters
• How the various Transfer Provider operating models differ and how Reg E applies differently depending on the model
• How clarity regarding error resolutions is critical for protecting consumers and for the financial services industry

“To best protect consumers, an efficient error resolution process is important for all participants in a P2P Intermediated Transfer,” said Stephen Krebs, Vice President and Associate General Counsel, The Clearing House. “Understanding the various types of Intermediated Transfers, how Reg E applies to different Transfer Provider models, and which financial institution is responsible for error investigation and resolution, are important to making sure that errors are resolved correctly and expeditiously for consumers.”

To read the full white paper click here.