12 C.F.R. § 205.10

Preauthorized transfers

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(a) Preauthorized transfers to consumer's account—(1) Notice by financial institution. When a person initiates preauthorized electronic fund transfers to a consumer's account at least once every 60 days, the account-holding financial institution shall provide notice to the consumer by:

(i) Positive notice. Providing oral or written notice of the transfer within two business days after the transfer occurs; or

(ii) Negative notice. Providing oral or written notice, within two business days after the date on which the transfer was scheduled to occur, that the transfer did not occur; or

(iii) Readily-available telephone line. Providing a readily available telephone line that the consumer may call to determine whether the transfer occurred and disclosing the telephone number on the initial disclosure of account terms and on each periodic statement.

(2) Notice by payor. A financial institution need not provide notice of a transfer if the payor gives the consumer positive notice that the transfer has been initiated.

(3) Crediting. A financial institution that receives a preauthorized transfer of the type described in paragraph (a)(1) of this section shall credit the amount of the transfer as of the date the funds for the transfer are received.

(b) Written authorization for preauthorized transfers from consumer's account. Preauthorized electronic fund transfers from a consumer's account may be authorized only by a writing signed or similarly authenticated by the consumer. The person that obtains the authorization shall provide a copy to the consumer.

(c) Consumer's right to stop payment—(1) Notice. A consumer may stop payment of a preauthorized electronic fund transfer from the consumer's account by notifying the financial institution orally or in writing at least three business days before the scheduled date of the transfer.

(2) Written confirmation. The financial institution may require the consumer to give written confirmation of a stop-payment order within 14 days of an oral notification. An institution that requires written confirmation shall inform the consumer of the requirement and provide the address where confirmation must be sent when the consumer gives the oral notification. An oral stop-payment order ceases to be binding after 14 days if the consumer fails to provide the required written confirmation.

(d) Notice of transfers varying in amount—(1) Notice. When a preauthorized electronic fund transfer from the consumer's account will vary in amount from the previous transfer under the same authorization or from the preauthorized amount, the designated payee or the financial institution shall send the consumer written notice of the amount and date of the transfer at least 10 days before the scheduled date of transfer.

(2) Range. The designated payee or the institution shall inform the consumer of the right to receive notice of all varying transfers, but may give the consumer the option of receiving notice only when a transfer falls outside a specified range of amounts or only when a transfer differs from the most recent transfer by more than an agreed-upon amount.

(e) Compulsory use—(1) Credit. No financial institution or other person may condition an extension of credit to a consumer on the consumer's repayment by preauthorized electronic fund transfers, except for credit extended under an overdraft credit plan or extended to maintain a specified minimum balance in the consumer's account.

(2) Employment or government benefit. No financial institution or other person may require a consumer to establish an account for receipt of electronic fund transfers with a particular institution as a condition of employment or receipt of a government benefit.

Notes of Decisions

Cited in 19 cases (1 in the last 5 years), 1995–2024 · leading case: In Re Easysaver Rewards Litig., 737 F. Supp. 2d 1159 (S.D. Cal. 2010).

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In Re Easysaver Rewards Litig., 737 F. Supp. 2d 1159 (S.D. Cal. 2010). · cites it 3× “” 12 C.F.R. § 205.10 , app. C, supp. I, ¶ 10(b)(5).”

Robins v. Global Fitness Holdings, LLC, 838 F. Supp. 2d 631 (N.D. Ohio 2012). “” 12 C.F.R. § 205.10 (b). With the exception of the unauthorized $1 added to the monthly withdrawals from the accounts of Plaintiffs Baker and Green, all EFTs were authorized by the parties’ unambiguous, written agreements.”

Cobb v. Monarch Fin. Corp., 913 F. Supp. 1164 (N.D. Ill. 1995). · cites it 2× “, 12 C.F.R. § 205.10 (a) (directing the "financial institution” to provide notice).”

Nordberg v. Trilegiant Corp., 445 F. Supp. 2d 1082 (N.D. Cal. 2006). “12 C.F.R. § 205.10 (d) (emphasis added). Similarly, the Official Staff Interpretations (“OSI”) of Regulation E expressly state that for “authorization obtained by a third party .”

Fed. Trade Comm'n v. Payday Fin. LLC, 989 F. Supp. 2d 799 (D.S.D. 2013). · cites it 2× “” 12 C.F.R. § 205.10 (e)(1); 15 U.S.C. § 1693k(l).”

Wike v. Vertrue, Inc., 566 F.3d 590 (6th Cir. 2009). “§ 1693e(a); accord 12 C.F.R. § 205.10 (b); see also id. pt. 205 supp.”

Wendorf v. Landers, 755 F. Supp. 2d 972 (N.D. Ill. 2010). “§ 1693e(a); accord 12 C.F.R. § 205.10 (b); id. Pt. 205 Supp.”

Affinion Benefits Grp., LLC v. Econ-O-Check Corp., 784 F. Supp. 2d 855 (M.D. Tenn. 2011). · cites it 4× “1) by requiring banks to disclose their customers’ nonpublic personal information to Affinion in violation of the Gramm-Leach-Bliley Act (“GLBA”); (2) by requiring banks to disclose their customers’ unencrypted account numbers to Affinion in violation of the GLBA; and (3) by…”

Fed. Trade Comm'n v. Johnson, 96 F. Supp. 3d 1110 (D. Nev. 2015). · cites it 2× “10(b) of Regulation E, 12 C.F.R. § 205.10 (b): (Count X) Defendants debited consumers’ bank accounts on a recurring basis without obtaining written authorization.”

Puglisi v. Debt Recovery Solutions, LLC, 822 F. Supp. 2d 218 (E.D.N.Y 2011). “12 C.F.R. § 205.10 (b). As a threshold issue, it is clear from defendant’s papers that defendant is disputing whether its attempted withdrawal of plaintiffs funds on December 17, 2007 was a “preauthorized electronic funds transfer” which is “an electronic fund transfer…”

Fed. Trade Comm'n v. Grant Connect, LLC, 827 F. Supp. 2d 1199 (D. Nev. 2011). “” 12 C.F.R. § 205.10 (b). A preauthorized electronic fund transfer is “an electronic fund transfer authorized in advance to recur at substantially regular intervals.”

de la Torre v. CashCall, Inc., 56 F. Supp. 3d 1073 (N.D. Cal. 2014). “” 12 C.F.R. § 205.10 (e)(1); 15 U.S.C. § 1693k(1).”

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— 12 C.F.R. § 205.10(b) — 1 case

Affinion Benefits Grp., LLC v. Econ-O-Check Corp., 784 F. Supp. 2d 855 (M.D. Tenn. 2011). “1) by requiring banks to disclose their customers’ nonpublic personal information to Affinion in violation of the Gramm-Leach-Bliley Act (“GLBA”); (2) by requiring banks to disclose their customers’ unencrypted account numbers to Affinion in violation of the GLBA; and (3) by…”

— 12 C.F.R. § 205.10(c) — 1 case

Cobb v. Monarch Fin. Corp., 913 F. Supp. 1164 (N.D. Ill. 1995). “, 12 C.F.R. § 205.10 (a) (directing the "financial institution” to provide notice).”

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