Regulation E (EFTA) Policy — Electronic Fund Transfers & Remittance Rule
Priyo Inc. (“Priyo” or the “Company”) has developed this Regulation E Policy (“Policy”) to comply with the Electronic Fund Transfer Act (“EFTA”), which establishes the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer and remittance transfer services and of financial institutions or other persons that offer these services.
The Electronic Funds Transfer Act and its implementing Regulation E (collectively, “Reg E”) establish the basic rights, liabilities, and responsibilities of consumers who use electronic fund transfer (“EFT”) services and of financial institutions or other persons that offer these services. The primary objective of the act and regulation is the protection of individual consumers engaging in EFTs. Reg E sets forth specific disclosure content and timing requirements, issuance of access devices, prepaid card requirements, stop payment rights on Pre-authorized EFTs, and error resolution requirements.
The Dodd-Frank Act granted rule making authority under the EFTA to the Consumer Financial Protection Bureau (“CFPB”) and, with respect to entities under its jurisdiction, granted authority to the CFPB to supervise and enforce compliance with the EFTA and its implementing regulations including Regulation E.
Priyo recognizes the importance of satisfying the requirements of the EFTA and Regulation E when engaging in processes related to the deposit accounts, debit cards and remittance services the Company offers to consumers through its platform and in partnership with the sponsor bank. It is the policy of Priyo to comply with the requirements of the EFTA and Regulation E that apply to its business activity, and as amended from time to time. This Policy directs Management to develop appropriate procedures to ensure compliance with the EFTA and Reg E, and controls to prevent any violations of law, regulations, statute, or other requirement.
Reg E Subpart A applies to electronic fund transfers (“EFTs”). Reg E Subpart B applies to remittance transfers, which are applicable to Priyo. Priyo is committed to protecting the rights of consumers who use the EFT services that the Company offers.
Chief Compliance Officer
The CCO, or designee (individually and collectively, referred to herein as Compliance) will report directly to the executive team and is responsible for owning, maintaining and enforcing this Policy. The executive team will maintain oversight of this Policy and must be informed of any deficiencies identified through compliance monitoring that require corrective action. At least annually, Compliance will review this Policy and recommend appropriate changes to the executive team.
In conjunction with the Company’s partner, Priyo offers deposit account products to consumers. While the Company’s partner bank is the “financial institution” subject to the requirements of Regulation E, Priyo is responsible for carrying out the operational processes related to complying with the provisions set forth by the Regulation.
Priyo and its partner bank jointly offer prepaid accounts as defined by Subpart A of Regulation E, and remittance transfer services to consumers as defined in Subpart B of the Regulation. Should the Company’s product offerings change to the extent that there is additional Regulation E impact to Priyo, this Policy will be amended accordingly.
Regulation E applies to any electronic fund transfer that authorizes Priyo to debit or credit a consumer’s account. The requirements of the Regulation apply only to covered accounts. Covered accounts, for purposes of the Regulation, are those for which an agreement for EFT services to or from the account have been entered into between:
Electronic Fund Transfer (EFT)
Any transfer of funds that is initiated through an electronic terminal (point-of-sale), telephone, computer, magnetic tape or any other electronic means (such as ACH transactions) for the purpose of ordering, instructing or authorizing a financial institution to debit or credit a consumer's account. EFT does not include fund transfers by check, draft or similar paper instrument, or a wire or similar transfer.
Account
A demand deposit (checking), savings or other consumer asset account held directly or indirectly by a financial institution and established primarily for personal, family, or household purposes. Does not include an account held under a bona fide trust agreement.
Access Device
A card, code, or other means of access to a consumer's account, or any combination thereof, that may be used by the consumer to initiate electronic fund transfers.
Pre-authorized EFT
An EFT authorized in advance to recur at substantially regular intervals.
Business Day
Any day on which the offices of the consumer's financial institution are open to the public for carrying on substantially all business functions.
Disclosures required under Regulation E are to be clear and readily understandable, in writing, and in a form that the customer may keep. Initial written disclosures will be made at the time a customer contracts for an EFT service or prior to the time of the first EFT involving the customer’s account.
The contents of such disclosures will include, as they may apply:
If the Company contemplates a change in terms, it will provide consumers a written or electronic notice at least 21 days before the effective date of any change that results in any of the following:
For accounts to or from which electronic fund transfers can be made, Priyo will mail or deliver to the consumer, at least once each calendar year, an error resolution notice. It is Priyo’s policy to use the model forms provided under the Regulation.
Priyo will provide the customer with a periodic statement for each monthly cycle where an EFT occurred, or at least quarterly if an EFT did not occur. For each EFT made during the statement period, the periodic statement will include, as applicable:
If the consumer notifies Priyo within two business days after learning of the loss or theft of the access device, the consumer’s liability shall not exceed the lesser of $50 or the amount of unauthorized transfers that occur before notice to the Company.
If the consumer fails to notify the Company within two business days after learning of the loss or theft of the access device, the consumer’s liability shall not exceed the lesser of $500 or the sum of $50 (or the amount of unauthorized transfers within the two business days, whichever is less) and the amount of unauthorized transfers that occur after the close of two business days and before notice to the Company.
If a statement shows unauthorized transfers without an access device, consumers must notify the Company within 60 days of statement delivery. If the customer notifies Priyo within 60 days, there is no customer liability. If the customer notifies Priyo after 60 days, there is no customer liability for the first 60 days, but customer liability is unlimited during the time period between 60 days and notification.
If the consumer’s delay in notifying Priyo was due to extenuating circumstances (such as extended travel or hospitalization), Priyo is required to extend the times specified above to a reasonable period.
A preauthorized transfer is an EFT authorized in advance to recur at substantially regular intervals. Preauthorized electronic transfers from a consumer’s account may be authorized only by a writing signed or similarly authenticated by the consumer. When Priyo obtains the authorization, Priyo will provide a copy of the authorization to the consumer.
Priyo must honor an oral stop-payment order made at least three business days before a scheduled debit. If the debit item is resubmitted, the Company must continue to honor the stop-payment order. Once Priyo has been notified that the consumer’s authorization is no longer valid, the Company must block all future payments for the particular debit transmitted by the designated payee-originator.
If a consumer identifies a potential error related to an electronic fund transfer, Priyo’s Operations team will review the circumstances of the request and notify Compliance of the dispute. Priyo will respond to the consumer within 10 business days unless notice is provided to the consumer within 10 business days that additional time is needed to research the dispute. In any event, disputes must be resolved no later than 45 days after receipt.
These requirements only apply if Priyo is notified not later than 60 days after delivering a periodic statement that first reflects the error. The term “error” includes but is not limited to:
Regulation E identifies remittance transfer providers (“providers”) as those financial institutions that consistently conduct over 500 remittance transfers per year. For purposes of the Rule, a remittance transfer is an electronic transfer of funds requested by a consumer to a designated recipient that is sent by a remittance transfer provider and that is more than $15. The consumer must be located in the United States and the funds transfer is sent to a person or business in a foreign country.
Only consumer-to-consumer transfers and consumer-to-business transfers are covered under the Rule. The following transactions are NOT covered under the Rule:
Except for transfers scheduled before the date of transfer, Priyo will comply with cancellation requirements with respect to any oral or written request to cancel a remittance transfer from the sender that is received no later than 30 minutes after the sender makes payment, provided the transferred funds have not yet been picked up by or deposited to the designated recipient.
Priyo will refund, at no additional cost to the sender, the total amount of funds provided in connection with a remittance transfer, including any fees and, to the extent not prohibited by law, taxes imposed in connection with the remittance transfer, within three business days of receiving a sender’s request to cancel.
Priyo will comply with the following requirements of Regulation E with respect to any oral or written notice of error from a sender that is received by Priyo no later than 180 days after the disclosed date of availability of the remittance transfer, enables Priyo to identify the sender and the transfer in question, and indicates why the sender believes an error exists.
Priyo will promptly investigate and determine whether an error occurred within 90 days of receiving a notice of error. The Company will report the results to the sender, including notice of any remedies available for correcting any error that Priyo determines has occurred, within three business days after completing its investigation.
The Company will train all employees involved in customer interaction or customer service on EFTA each calendar year, and monitor and track completion of this training. Other periodic or ad hoc trainings may be added as required.
Regulation E requires institutions to retain all documentation, such as disclosures, consumer disputes, reports, and other miscellaneous documents mentioned in this Policy. Priyo will retain evidence of compliance with these requirements imposed by Reg E for a period of not less than two years from the date disclosures are required to be made or action is required to be taken.
Questions or disputes? Contact Priyo support through your account dashboard or visit pay.priyo.com to report an error or request documentation.
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