Federal Register / Vol. 90, No. 9 / Wednesday, January 15, 2025 / Proposed Rules 3723 

1See Electronic Fund Transfers, Public Law 95– 

630, tit. XX, section 2001, 92 Stat. 3728 (1978); see 

also S. Rept. 95–1273 at 10 (1978) (‘‘EFT payment 

systems, which now involve billions of dollars 

annually and are growing in size, must have clearly 

defined rules to operate fairly, efficiently, and with 

public confidence.’’). 

2See 15 U.S.C. 1693m, 1693o. 

3Clemmer v. Key Bank Nat. Ass’n, 539 F.3d 349, 

353 (6th Cir. 2008) (citation omitted); see also Curtis 

v. Propel Prop. Tax Funding, LLC, 915 F.3d 234, 

239 (4th Cir. 2019). 

4Electronic Fund Transfer Act, H. Rept. 95–1315, 

at 5 (1978) (discussing definition of ‘‘financial 

institution’’); see also, e.g., S. Rept. 95–1273 at 25 

(1978) (‘‘The definition of ‘electronic fund transfer’ 

is intended to give the Federal Reserve Board 

flexibility in determining whether new or 

developing electronic services should be covered by 

the act and, if so, to what extent.’’); id. at 26 (noting 

that ‘‘[t]he definitions of ‘financial institution’ and 

‘account’ are deliberately broad so as to assure that 

all persons who offer equivalent EFT services 

involving any type of asset account are subject to 

the same standards and consumers owning such 

accounts are assured of uniform protection’’). 

5See 15 U.S.C. 1693b, 1693m(d). 

6See 44 FR 18468 (Mar. 28, 1979); 44 FR 59464 

(Oct. 15, 1979). 

7See, e.g., 61 FR 19662, 19662 (May 2, 1996) 

(amending Regulation E as part of periodic review 

to ‘‘reflect technological and other developments’’); 

62 FR 43467 (Aug. 14, 1997) (amending Regulation 

E with respect to government-administered EBT 

programs); 71 FR 51437 (Aug. 30, 2006) (amending 

Regulation E with respect to payroll cards). The 

CFPB also issued new requirements in subpart B of 

Regulation E relating to remittance transfers in final 

rules issued in 2012 and 2013. See 78 FR 30662, 

Continued 

carton or equivalent is established for 

oranges and grapefruit grown in the 

Lower Rio Grande Valley in Texas. 

Erin Morris, 

Associate Administrator, Agricultural 

Marketing Service. 

[FR Doc. 2025–00193 Filed 1–14–25; 8:45 am] 

BILLING CODE P 

CONSUMER FINANCIAL PROTECTION 

BUREAU 

12 CFR Part 1005 

[CFPB–2025–0003] 

Electronic Fund Transfers Through 

Accounts Established Primarily for 

Personal, Family, or Household 

Purposes Using Emerging Payment 

Mechanisms 

AGENCY: Consumer Financial Protection 

Bureau. 

ACTION: Notice of proposed interpretive 

rule; request for comment. 

SUMMARY: In light of interest by 

electronic fund transfer system market 

participants to offer new types of 

products to transfer funds and make 

purchases through accounts established 

primarily for personal, family, or 

household purposes, the Consumer 

Financial Protection Bureau (CFPB) is 

proposing this interpretive rule to assist 

companies, investors, and other market 

participants evaluating existing 

statutory and regulatory requirements 

governing electronic fund transfers 

(EFTs). 

DATES: Comments must be received by 

March 31, 2025. 

ADDRESSES: You may submit comments, 

identified by Docket No. CFPB–2025– 

0003, by any of the following methods: 

• Federal eRulemaking Portal: 

https://www.regulations.gov. Follow the 

instructions for submitting comments. A 

brief summary of this document will be 

available at https://

www.regulations.gov/docket/CFPB2025-0003. 

• Email: 2025-Emerging-PaymentsInterpretive-Rule@cfpb.gov. Include 

Docket No. CFPB–2025–0003 in the 

subject line of the message. 

• Mail/Hand Delivery/Courier: 

Comment Intake—2025 Emerging 

Payments Interpretive Rule, c/o Legal 

Division Docket Manager, Consumer 

Financial Protection Bureau, 1700 G 

Street NW, Washington, DC 20552. 

Instructions: The CFPB encourages 

the early submission of comments. All 

submissions should include the agency 

name and docket number. Because 

paper mail is subject to delay, 

commenters are encouraged to submit 

comments electronically. In general, all 

comments received will be posted 

without change to https://

www.regulations.gov. 

All submissions, including 

attachments and other supporting 

materials, will become part of the public 

record and subject to public disclosure. 

Proprietary information or sensitive 

personal information, such as account 

numbers or Social Security numbers, or 

names of other individuals, should not 

be included. Submissions will not be 

edited to remove any identifying or 

contact information. 

FOR FURTHER INFORMATION CONTACT: 

George Karithanom, Program Analyst, 

Office of Regulations at (202) 435–7700 

or https://reginquiries.consumer

finance.gov. If you require this 

document in an alternative electronic 

format, please contact CFPB_

Accessibility@cfpb.gov. 

SUPPLEMENTARY INFORMATION: 

I. Background 

A. The Passage and Evolution of the 

Electronic Fund Transfer Act 

Advances in automation brought 

about enormous innovation in the 

middle of the twentieth century with 

respect to the movement of funds. In 

1969, Chemical Bank installed the first 

automated teller machine in Rockville 

Center, New York. New payment 

networks also launched, forming the 

foundation of mechanisms facilitating 

EFTs. However, adoption of these new 

technologies raised questions about the 

rights and liabilities of consumers who 

use EFT services, and the 

responsibilities of financial institutions 

that offer them. In particular, while 

financial firms would reap benefits from 

automation, consumer adoption might 

be stymied by concerns about and risks 

of errors and fraud. 

To provide fairness, efficiency, and 

confidence in burgeoning technologies 

to make payments outside of paper 

currency, coins, and paper checks, 

Congress enacted the Electronic Fund 

Transfer Act (EFTA) in 1978.1 To ensure 

that industry participants in electronic 

fund transfers (EFTs) had appropriate 

incentives to guard against errors and 

fraud, EFTA provides a considerable set 

of rights to consumers to dispute errors 

and limit their liability for unauthorized 

EFTs, among other things. To help 

vindicate the rights established in 

EFTA, Congress provided mechanisms 

for both public and private 

enforcement.2 In addition, courts have 

held that EFTA is a ‘‘remedial statute 

accorded a broad, liberal construction in 

favor of the consumer.’’ 3

The United States was among the first 

to adopt a framework like EFTA, 

providing greater certainty and 

protection for consumers, financial 

firms, and other participants in 

electronic fund transfer systems. In 

enacting that legislation, Congress 

recognized that electronic fund transfer 

services would continue to develop in 

the future. In particular, EFTA’s 

legislative history demonstrates that 

Congress drafted the definitions used in 

the statute in a broad manner to ensure 

that EFTA was ‘‘sufficiently flexible to 

accommodate the continued evolution 

of electronic fund transfer services.’’ 4

Congress also granted the Board of 

Governors of the Federal Reserve 

System (the Board) and later the CFPB 

the authority to issue regulations and 

guidance to implement the broad 

provisions of EFTA.5

The Board implemented EFTA 

through Regulation E shortly after the 

statute’s passage in 1978.6 Over time, 

the Board and then the CFPB have 

amended and interpreted Regulation E 

in response to the emergence of new 

electronic payment instruments and 

systems, broader developments in the 

market, and new congressional 

legislation.7 Most recently, in 2016, the 


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30662 (May 22, 2013) (summarizing 2012 and 2013 

rules). 8 81 FR 83934 (Nov. 22, 2016). The prepaid rule 

also amended Regulation Z, which implements the 

Truth in Lending Act, to create consumer 

protections for prepaid accounts. 9 Id. at 83978 (discussing ‘‘virtual currencies’’). 10 Id. 11See Mike Isaac & Nathaniel Popper, Facebook 

Plans Global Financial System Based on 

Cryptocurrency, N.Y. Times (June 18, 2019), https:// 

www.nytimes.com/2019/06/18/technology/ 

facebook-cryptocurrency-libra.html. 12See Rebecca Nelson & David Perkins, Libra: A 

Facebook-led Cryptocurrency Initiative, 

Congressional Research Service (Oct. 21, 2019), 

https://crsreports.congress.gov/product/pdf/IN/ 

IN11183/2. 

13See Libra, White Paper (June 18, 2019), https:// 

web.archive.org/web/20190618085610/https://

libra.org/en-US/white-paper/ (‘‘[t]he mission for 

Libra is a simple global currency and financial 

infrastructure that empowers billions of people’’). 

14See PYMNTS, A Brief History of Libra (July 15, 

2019), https://www.pymnts.com/cryptocurrency/ 

2019/a-brief-history-of-facebook-libra/. 

15See Off. of the Priv. Comm’r of Can., Joint 

statement on global privacy expectations of the 

Libra network (Aug. 5, 2019), https://

www.priv.gc.ca/en/opc-news/speeches-andstatements/2019/s-d_190805/; Foo Yun Chee, EU 

antitrust regulators raise concerns about Facebook’s 

Libra currency: sources, Reuters (Aug. 21, 2019), 

https://www.reuters.com/article/technology/euantitrust-regulators-raise-concerns-about-facebookslibra-currency-sources-idUSKCN1VB1C1/. 

16See, e.g., Zachary Warmbrodt, Jerome Powell: 

Facebook’s Libra poses potential risk to financial 

system, Politico (July 10, 2019), https://

www.politico.com/story/2019/07/10/jerome-powellfacebook-libra-1578306. 

17 Katie Paul, Facebook’s cryptocurrency venture 

to wind down after asset sale to Silvergate, Reuters 

(Jan. 31, 2022), https://www.reuters.com/ 

technology/facebooks-cryptocurrency-venture-winddown-after-asset-sale-silvergate-2022-02-01. 

18See CFPB, Prepared Remarks of CFPB Director 

Rohit Chopra at the Brookings Institution Event on 

Payments in a Digital Century (Oct. 6, 2023), 

https://www.consumerfinance.gov/about-us/ 

newsroom/prepared-remarks-of-cfpb-director-rohitchopra-at-the-brookings-institution-event-onpayments-in-a-digital-century/ (‘‘Libra never 

became a new global currency. But the questions it 

provoked in the West for consumer and data 

protection regulators . . . live on.’’). 

19Press Release, CFPB, CFPB Orders Tech Giants 

to Turn Over Information on their Payment System 

Plans (Oct. 21, 2021), https://

www.consumerfinance.gov/about-us/newsroom/ 

cfpb-orders-tech-giants-to-turn-over-information-ontheir-payment-system-plans/. 

20See CFPB, Banking in video games and virtual 

worlds (Apr. 4, 2024), https://

www.consumerfinance.gov/data-research/researchreports/issue-spotlight-video-games/. 

21 Id. (‘‘Third-party websites also facilitate a 

growing skin gambling industry that supports 

wagering skins, similar to casino chips, in virtual 

games such as blackjack, roulette, or craps. . . . 

competitive gaming contests, also known as esports, 

and games between professional sports teams. 

Winnings can be converted to fiat currency or other 

forms of virtual currency and withdrawn for a fee 

directly to the player’s digital wallet.’’) 

CFPB issued a final rule to create 

comprehensive consumer protections 

for prepaid accounts under Regulation 

E.8 The CFPB noted in the rule that its 

analysis with respect to virtual 

currencies and related products and 

services was ongoing, and that the rule 

did not resolve issues with respect to 

the application of existing regulations or 

the prepaid rule to such products and 

services.9 The CFPB therefore treated 

comments addressing crypto-assets and 

related products and services as outside 

the scope of the rulemaking.10

B. Facebook’s 2019 Libra Proposal 

While most payment networks rely on 

significant network effects, like those 

that exist among banks and merchants 

through card networks, advances in 

mobile technology spawned new 

networks for payments. More recently, 

large technology firms have begun to 

explore additional ways to leverage 

their network effects to facilitate 

payments. 

In 2019, the technology firm Facebook 

announced the creation of a new global 

currency known as Libra.11 Libra was a 

proposed ‘‘stablecoin.’’ 12 Rather than 

offering Libra to the public for 

speculative trading, the goal of Libra 

was to provide a mechanism to make 

payments throughout the digital 

world.13 Users would transmit Libra 

through a Calibra wallet account, which 

would also be established by Facebook. 

A broad range of merchants, including 

app-based services, indicated that they 

would participate in the Libra scheme.14

Regulators around the world charged 

with assuring compliance with privacy, 

consumer protection, and anti-money 

laundering laws raised concerns about 

many aspects of the Libra proposal.15

Central banks and authorities charged 

with ensuring stability of the financial 

system also sought clarity on how the 

Libra stablecoin would fit into existing 

regulatory frameworks.16

Ultimately, Libra was abandoned.17

However, questions surrounding the 

safety and utility of emerging forms of 

fund transfers for ‘‘personal, family, or 

household purposes’’ operating outside 

of traditional bank and credit union 

accounts have persisted.18

C. CFPB Research Into Emerging 

Payments 

While there has been considerable 

attention paid to cryptocurrencies 

acquired for speculation and other 

purposes, the CFPB has conducted 

research to evaluate emerging forms of 

payments, fund transfers, and digital 

technologies for ‘‘personal, family, or 

household purposes.’’ For example, in 

2021, the CFPB launched an inquiry 

into the payment products and services 

offered by large technology firms and by 

widely used digital payment 

applications.19 There were many 

insights from the research, including 

developments in how firms were 

offering accounts for storing and 

transmitting funds. While firms 

primarily offered the ability to transfer 

funds by relying on balances in a 

consumer’s bank or credit union 

account, many of the firms offered 

stored balance products, where funds 

held in an account were not necessarily 

deposited in a traditional insured 

account. There were indicia that some 

of the firms were actively developing 

proprietary products, including 

stablecoins similar to Libra. 

Because gaming platforms served as 

early adopters of technologies that 

inevitably become more broadly 

adopted, the CFPB also undertook a 

study of payments in fund transfers 

used on such platforms.20 In a report 

from April 2024, the CFPB detailed 

some of the business practices on how 

game players convert U.S. dollars into 

virtual currencies. The payment systems 

on these gaming platforms have rapidly 

evolved. Rather than relying on a 

business model in which players make 

a one-time payment to buy or play the 

game, some gaming platforms have 

developed elaborate economies where 

the platforms accept U.S. dollars in 

exchange for virtual currency that can 

be transacted among players and other 

platform participants, and even 

exchanged back to U.S. dollars in 

certain circumstances. The report 

described how players and other 

platform participants maintain an 

account where these virtual currencies 

are stored, and how some consumers 

have experienced the loss of assets in 

these accounts through hacking 

attempts, account theft, scams, and 

unauthorized transactions. The 

developments described in the report 

raise questions about responsibilities 

and liabilities when errors or fraud take 

place. 

The CFPB has also conducted 

research into online services that offer 

betting on sporting events and casino 

games.21 Some of these services allow 

bettors to maintain accounts that allow 

individuals to make a range of 

electronic transfers, including to and 

from linked accounts. These accounts 

may be denominated in U.S. dollars, or 

in proprietary currencies. 

Recognizing that many arrangements, 

such as stablecoins and virtual 

currencies, constitute alternative 

electronic fund transfer mechanisms, 

private sector participants have made 

certain determinations about how to 

treat transactions to obtain these 

currencies. For example, many large 

credit card issuers categorize purchases 

of virtual currencies as ‘‘cash 


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22See President’s Working Grp. on Fin. Mkts., 

Fed. Deposit Ins. Corp.& Off. of the Comptroller of 

the Currency, Report on Stablecoins (Nov. 2021), 

https://home.treasury.gov/system/files/136/ 

StableCoinReport_Nov1_508.pdf. 

23 Id. at 18. 

24 Id. at 2, 16–18. 

25See CFPB, Statement of CFPB Director Chopra 

on Stablecoin Report (Nov. 1, 2021), https://

www.consumerfinance.gov/about-us/newsroom/ 

statement-cfpb-director-chopra-stablecoin-report/. 

26See 12 U.S.C. 5511(a); 15 U.S.C. 1693(b). 

27 12 CFR 1005.3(a). 

28EFTA section 903(7); 15 U.S.C. 1693a(7). 

29 12 CFR 1005.2(i). Regulation E defines ‘‘access 

device’’ as 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. 12 CFR 

1005.2(a)(1). 

30See, e.g., S. Rept. 95–1273 at 26 (‘‘The term 

‘financial institution’ is defined to mean traditional 

depository institutions as well as any other person 

who directly or indirectly holds a consumer’s 

account.’’); Electronic Fund Transfer Act, H. Rept. 

95–1315, at 5 (1978) (‘‘Section 903(h) of the bill 

defines the term ‘financial institution’ to include 

not only traditional depository institutions that are 

normally considered to be financial institutions but 

also ‘. . . any other person who, . . . indirectly, 

holds a consumer account belonging to an 

individual; . . . .’ This language is intended by the 

Committee to assure that the legislation remains 

sufficiently flexible to accommodate the continued 

evolution of electronic fund transfer services.’’); see 

also 81 FR 83934 at 83964 (noting that the prepaid 

rule’s ‘‘requirements apply equally to depositories 

and non-depositories alike’’). 

31Keene v. Keene, 371 P.2d 329, 332 (Cal. 1962) 

(quoting definition of ‘‘funds’’ in Webster’s New 

International Dictionary 921 (3d ed. 1961)); see also 

Funds, Webster’s New International Dictionary 921 

(3d ed. 1961) (defining ‘‘funds’’ as ‘‘available 

pecuniary resources ordinarily including cash and 

negotiable paper that can be converted to cash at 

any time without loss’’). 

32 In re Plich’s Est., 348 P.2d 706, 708–09 (Colo. 

1960); see also, e.g., Zamora v. United States, 369 

F.2d 855, 859 (10th Cir. 1966) (‘‘The word ‘funds’ 

is broader than but in its usual sense includes 

‘moneys.’ ’’). 

advances,’’ reflecting the money-like 

nature of the funds held in these 

accounts. 

D. 2021 Report on Stablecoins 

In November 2021, the President’s 

Working Group on Financial Markets 

(consisting of the Secretary of the 

Treasury, the Chairperson of the Board 

of Governors of the Federal Reserve 

System, the Chairperson of the 

Securities and Exchange Commission, 

and the Chairperson of the Commodity 

Futures Trading Commission), in 

conjunction with the Federal Deposit 

Insurance Commission and the Office of 

the Comptroller of the Currency, issued 

a report on stablecoins.22 The report 

described certain financial stability 

concerns, as well as issues related to the 

issuance of stablecoins by banks and 

nonbanks. The report did not include a 

specific assessment on consumer 

protection issues, but noted that existing 

laws (including EFTA) accord certain 

consumer protections to payments 

services used by consumers.23 The 

report further urged regulators to 

continue to coordinate on these issues 

and for Congress to consider legislation 

on a prudential framework for so-called 

‘‘payment stablecoins.’’ 24

Consistent with the report, the CFPB 

has coordinated with regulators on 

issues with respect to stablecoins and 

emerging payments.25 There has been 

considerable legislative discussion on 

many aspects of stablecoins and digital 

assets, but these discussions have 

primarily focused on stablecoins’ status 

under the securities and commodities 

trading laws, rather than their potential 

use as a payment mechanism. 

E. Rationale for Development of 

Interpretive Rule 

The CFPB is concerned that if market 

participants do not apply EFTA and 

Regulation E in a consistent manner, 

consumers making electronic fund 

transfers using accounts established 

primarily for personal, family, or 

household purposes might face 

challenges in vindicating their rights in 

the event of unauthorized transfers and 

other errors. The CFPB is also 

concerned that inconsistent application 

of EFTA and Regulation E might put 

certain providers at an unfair, 

competitive disadvantage. 

While the application of Federal 

consumer financial protection laws, 

such as EFTA, to new methods of 

payments is often developed through 

case-by-case adjudications by courts, 

consumers and market participants may 

face conflicting guidance from case law. 

Consistent with the CFPB’s mandate to 

promote fair, transparent, and 

competitive markets, as well as its 

mandate to advance the underlying goal 

of EFTA to create confidence in 

electronic fund transfer mechanisms by 

establishing a framework of rights, 

liabilities, and responsibilities,26 this 

proposed interpretive rule, if adopted, 

would provide a consistent framework 

for the applicability of EFTA and 

Regulation E with respect to a range of 

emerging payment mechanisms. The 

proposed interpretive rule seeks to 

synthesize the range of insights 

developed by the CFPB in recent years 

derived from research and coordination 

to outline how market participants can 

develop beneficial products and 

services in compliance with EFTA and 

Regulation E, by ensuring that similar 

products are treated similarly under the 

law. 

II. Proposed Interpretive Rule 

The text of the proposed interpretive 

rule is as follows. 

A. Legal Analysis 

EFTA and Regulation E apply to an 

electronic fund transfer (EFT) that 

authorizes a ‘‘financial institution’’ to 

debit or credit a consumer’s account.27

The term ‘‘electronic fund transfer’’ 

generally means any transfer of ‘‘funds’’ 

that is initiated through an electronic 

terminal, telephone, computer, or 

magnetic tape for the purpose of 

ordering, instructing, or authorizing a 

financial institution to debit or credit a 

consumer’s account.28

1. ‘‘Financial Institution’’ 

The term ‘‘financial institution’’ 

under EFTA, as implemented in 

Regulation E, means a bank, savings 

association, credit union, or any other 

person that directly or indirectly holds 

an account belonging to a consumer, or 

that issues an access device and agrees 

with a consumer to provide EFT 

services.29 It is well-established that 

financial institutions include nonbank 

entities that directly or indirectly hold 

an account belonging to a consumer, or 

that issue an access device and agree 

with a consumer to provide EFT 

services.30

2. ‘‘Funds’’ 

The term ‘‘funds’’ is not specifically 

defined in EFTA or Regulation E, but 

has been broadly construed to cover a 

broad array of assets, beyond those held 

in a traditional bank or credit union 

account. Specifically, at the time of 

EFTA’s enactment in 1978, as well as 

today, the term was and is broadly 

understood to cover much more than 

the U.S. dollar and other fiat currencies. 

For example, one leading court 

decision from before the enactment of 

EFTA recognized that the dictionary 

defined ‘‘funds’’ ‘‘as ‘available 

pecuniary resources ordinarily 

including cash and negotiable paper’ ’’ 

and that ‘‘in a legal context the courts 

have also taken it to include property of 

value which may be converted into 

cash.’’ 31 Another decision from that 

time stated that the term ‘‘ ‘[f]unds’ 

includes moneys, and much more, such 

as notes, bills, checks, drafts, stocks, 

and bonds. In other words the general 

term can and does include not only 

currency but also other types of 

pecuniary resources which are readily 

converted into cash.’’ 32

Similarly, Black’s Law Dictionary at 

that time defined ‘‘fund’’ as ‘‘[a] generic 

term and all-embracing as compared 

with [the] term ‘money,’ etc., which is 


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33 Fund, Black’s Law Dictionary (4th ed.1957); see 

also Funds, Black’s Law Dictionary (4th ed.1957) 

(‘‘Moneys and much more, such as notes, bills, 

checks, drafts, stocks and bonds, and in broader 

meaning may include property of every kind.’’). 

34 Funds, Collins English Dictionary, https://

www.collinsdictionary.com/us/dictionary/english/ 

funds (last visited Dec. 11, 2024); Pecuniary, Collins 

English Dictionary, https://www.collinsdictionary.

com/us/dictionary/english/pecuniary (last visited 

Dec. 16, 2024); Funds, Merriam-Webster Dictionary, 

https://www.merriam-webster.com/dictionary/ 

money (last visited Dec. 11, 2024); Pecuniary, 

Merriam-Webster Dictionary, https://www.merriamwebster.com/dictionary/pecuniary (last visited Dec. 

16, 2024). 

35 Money, Merriam-Webster Dictionary, https://

www.merriam-webster.com/dictionary/money (last 

visited Dec. 11, 2024). 

36Whether a specific digital asset is included in 

the term ‘‘funds’’ for purposes of EFTA and 

Regulation E is fact specific, and there are likely 

some digital assets that are not ‘‘funds’’ because, for 

example, they cannot be used to make payments or 

cannot be readily exchanged for fiat currency. For 

example, most nonfungible tokens (‘‘NFTs’’) are 

unlikely to be ‘‘funds.’’ 

37See, e.g., United States v. Day, 700 F.3d 713, 

726 (4th Cir. 2012) (holding that ‘‘gold can 

constitute ‘funds’ under the . . . statute where it is 

moved as a liquid, monetary asset’’); United States 

v. Iossifov, 45 F.4th 899, 913 (6th Cir. 2022), cert. 

denied, 143 S. Ct. 812 (2023) (holding that the 

ordinary meaning of ‘‘funds’’ is ‘‘available 

pecuniary resources,’’ and noting that courts have 

‘‘unanimously determined that Bitcoin’’ is 

encompassed by the terms ‘‘funds’’ and ‘‘monetary 

instrument’’); United States v. Murgio, 209 F. Supp. 

3d 698, 707 (S.D.N.Y. 2016) (‘‘[t]he ordinary 

meaning of ‘funds’ . . . is ‘available pecuniary 

resources’ ’’) (citation omitted); United States v. 

Budovsky, No. 13CR368 DLC, 2015 WL 5602853 

(S.D.N.Y. Sept. 23, 2015) (assigning ‘‘funds’’ its 

ordinary meaning, ‘‘assets that ‘can be used to pay 

for things in the colloquial sense,’ ’’ and holding 

that ‘‘funds’’ encompassed the digital currency at 

issue); see also United States v. Harmon, 474 F. 

Supp. 3d 76 (D.D.C. 2020). 

38Rider v. Uphold HQ Inc., 657 F. Supp. 3d 491, 

498 (S.D.N.Y. 2023). 

39S. Rept. 95–915 at 9. 

40 Id. at 4, 9 (providing as examples mutual fund 

accounts that provide an EFT card that can be used 

to make payments, money market mutual fund 

accounts, and positive balances in margin accounts 

at a stock brokerage). 

41 12 CFR 1005.2(b)(1); see also 15 U.S.C. 

1693a(2). 42See 12 CFR 1005.2(b)(3). Whether a particular 

product meets the definition of ‘‘prepaid account’’ 

in Regulation E depends on the features of the 

product and is outside the scope of this interpretive 

rule. 

43See 12 CFR 1005.2(b)(1). Whether a particular 

account sufficiently resembles a checking or savings 

account, and thus qualifies as an ‘‘other consumer 

asset account’’ for purposes of Regulation E, will 

depend on the account’s specific features. 

44Regulation E comment 2(b)–1.i. 

45Regulation E comment 2(b)–1.ii. 

46 12 CFR 1005.11(c)(2)(i)(B). 

47 12 CFR 1005.3(c)(4); Regulation E comment 

3(c)(4)–3.i; see also, 61 FR 19680 (May 2, 1996). 

48EFTA section 903(7); 15 U.S.C. 1693a(7); 12 

CFR 1005.3(c). 

specific.’’ 33 Modern dictionaries (both 

legal and general-use) similarly define 

‘‘funds’’ in reference to pecuniary 

resources and further define 

‘‘pecuniary’’ as ‘‘concerning or 

involving money’’ or ‘‘of or relating to 

money.’’ 34 The term ‘‘money’’ means 

‘‘something generally accepted as a 

medium of exchange, a measure of 

value, or a means of payment.’’ 35

Based on the plain language used in 

EFTA and the reasoning of judicial 

decisions, as well as the CFPB’s 

experience in market monitoring, it has 

long been clear that the term ‘‘funds’’ in 

EFTA is not limited to fiat currency like 

U.S. dollars. The CFPB interprets the 

term ‘‘funds’’ to include assets that act 

or are used like money, in the sense that 

they are accepted as a medium of 

exchange, a measure of value, or a 

means of payment. Under this 

interpretation, the term ‘‘funds’’ would 

include stablecoins, as well as any other 

similarly-situated fungible assets that 

either operate as a medium of exchange 

or as a means of paying for goods or 

services.36

In addition, the fact that the asset may 

fluctuate in value does not exempt it 

from this definition. Several courts 

interpreting ‘‘funds’’ in the context of 

Federal money transmitter and money 

laundering statutes have similarly held 

that the term ‘‘funds’’ is not limited to 

fiat currency and encompasses other 

types of assets, including widely held 

currencies like Bitcoin.37 A Federal 

district court also recently held that 

cryptocurrency, as a ‘‘digital form of 

liquid, monetary assets,’’ 

unambiguously constitutes ‘‘funds’’ 

under EFTA.38 These interpretations of 

‘‘funds’’ accord with Congress’s intent 

by ensuring that consumers are 

adequately protected and have access to 

the benefits of innovative electronic 

fund transfer systems and technology. 

3. ‘‘Account’’ and ‘‘Other Consumer 

Asset Account’’ 

Given the breadth of the term 

‘‘funds,’’ the applicability of EFTA and 

Regulation E will often turn on the 

definition of ‘‘account’’ in EFTA and 

Regulation E. 

EFTA section 903(2) defines 

‘‘account’’ to mean ‘‘a demand deposit, 

savings deposit, or other asset account 

. . . as described in regulations of the 

[CFPB], established primarily for 

personal, family, or household 

purposes,’’ subject to limited 

exceptions. The legislative history 

confirms that Congress intended EFTA 

to cover more than checking or savings 

accounts, noting that EFTA’s definition 

of ‘‘account’’ is intended to be broad 

enough ‘‘to assure that all persons who 

offer equivalent EFT services involving 

any type of asset account are subject to 

the same standards and consumers 

owning such accounts are assured of 

uniform protections.’’ 39 The legislative 

history also explained that the term 

‘‘account’’ was intended to go beyond a 

consumer’s checking or savings account. 

It provided several examples of nonbank 

asset accounts that were within EFTA’s 

coverage because they could potentially 

be used to make electronic payments 

from consumer accounts.40

Both EFTA and Regulation E generally 

define ‘‘account’’ to mean: 

[A] demand deposit (checking), savings, or 

other consumer asset account (other than an 

occasional or incidental credit balance in a 

credit plan) held directly or indirectly by a 

financial institution and established 

primarily for personal, family, or household 

purposes.41

Essentially, ‘‘other consumer asset 

accounts’’ include prepaid accounts,42

and other asset accounts established 

primarily for a consumer’s individual, 

family, or household use, that are not 

checking accounts or savings accounts, 

but into which funds can be deposited 

by the consumer or on their behalf and 

which have features of deposit or 

savings accounts. Such features include, 

but are not limited to: paying for goods 

or services from multiple merchants, 

ability to withdraw funds or obtain 

cash, or conducting person-to-person 

transfers.43 Depending on the facts and 

circumstances, the following could be 

considered ‘‘accounts’’ under EFTA: 

video game accounts used to purchase 

virtual items from multiple game 

developers or players; virtual currency 

wallets that can be used to buy goods 

and services or make person-to-person 

transfers; and credit card rewards points 

accounts that allow consumers to buy 

points that can be used to purchase 

goods from multiple merchants. 

This interpretation of the term ‘‘other 

consumer asset account’’ is consistent 

with the legislative history discussed 

above, and longstanding provisions in 

both Regulation E’s regulatory text and 

the Official Staff Interpretations to 

Regulation E, where certain types of 

accounts that are functionally similar to 

checking and savings accounts are 

Regulation E ‘‘accounts.’’ Examples 

include club accounts,44 retail 

repurchase agreements,45 margin 

accounts,46 as well as any securities and 

commodities accounts that are 

functionally similar to checking or 

savings accounts.47

4. Exceptions for Securities and 

Commodities 

EFTA and Regulation E both contain 

specific securities and commodities 

exceptions to the definition of EFT.48 As 

implemented in Regulation E, these 

specific exceptions include any transfer 


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Federal Register / Vol. 90, No. 9 / Wednesday, January 15, 2025 / Proposed Rules 3727 

49 12 CFR 1005.3(c)(4). 

50See S. Rept. 95–915 at 4 (explaining that EFTA 

would cover, for example, instances where a mutual 

fund issues ‘‘an EFT card which would draw on the 

consumer’s fund shares. Each time the card would 

be used, the fund could instantaneously redeem 

shares necessary to cover a payment and transfer 

the funds to the payee’’). 

51Nero v. Uphold HQ Inc., 688 F. Supp. 3d 134, 

144 (S.D.N.Y. 2023). (‘‘[P]ersonal asset accounts that 

are investment accounts like the money market 

mutual fund accounts identified in the Senate 

Report or [certain] cryptocurrency accounts . . . , 

are accounts covered by the EFTA. This is true even 

though a transaction from those accounts may not 

be subject to the EFTA in the event it is a 

transaction for the purchase or sale of a security 

regulated by the SEC.’’) 

52Regulation E comment 3(c)(4)–3.i; see also, 61 

FR 19680 (May 2, 1996). The SEC has authority to 

enforce EFTA against broker-dealers that are subject 

to the Securities Exchange Act. 15 U.S.C. 

1693o(a)(4). This interpretive rule is not intended 

to limit the authority of the SEC under the 

Securities Exchange Act or the CFTC under the 

Commodities Exchange Act. 

53 15 U.S.C. 1693f(a); 12 CFR 1005.11(b). 

Regulation E also tailored certain error resolution 

obligations for prepaid accounts. 12 CFR 1005.18(e). 

54 15 U.S.C. 1693f(f)(1); 12 CFR 1005.11(a)(1)(i). 

55However, the CFPB reiterates here that nothing 

in this proposed interpretive rule would change the 

existing statutory or regulatory exceptions to the 

definition of EFT. 

56 12 CFR 1005.2(m); Regulation E comments 

2(m)–3 and 4; see also CFPB, Electronic Fund 

Transfers FAQs, https://www.consumerfinance.gov/ 

compliance/compliance-resources/depositaccounts-resources/electronic-fund-transfers/ 

electronic-fund-transfers-faqs/#unauthorized-eft 

(last visited Dec. 2, 2024). 

57EFTA section 905; 15 U.S.C. 1693c; see 

generally 12 CFR 1005.7. 

58 12 CFR 1005.8 and 1005.9(b). 

59See generally 12 CFR part 1005, app. A. 

60See 12 CFR 1005.20; see also 81 FR 83934 at 

83977 (discussing interaction of the Gift Card Rule 

and the Prepaid Rule). 

61 12 U.S.C. 5512(b)(1). 

62 15 U.S.C. 1693m(d). 

63 44 U.S.C. 3501 through 3521. 

of funds the primary purpose of which 

is the purchase or sale of a security or 

commodity if, among other things, the 

security or commodity is regulated by 

the Securities and Exchange 

Commission (SEC) or the Commodity 

Futures Trading Commission (CFTC) or 

purchased or sold through a brokerdealer regulated by the SEC or through 

a futures commissions merchant 

regulated by the CFTC.49 This exception 

is limited to EFTs which have as their 

primary purpose the purchase or sale of 

commodities or securities, and does not 

reach instances where securities or 

commodities are used as ‘‘funds’’ in an 

‘‘account’’ to purchase goods or 

services.50

Put another way, EFTA generally does 

not apply to the purchase or sale of a 

stock or bond.51 But it could apply if a 

stock, bond, or other form of funds in 

an investment account—including 

funds and accounts also regulated by 

the SEC or CFTC—is used to purchase 

goods or services from a retailer. Indeed, 

the longstanding Official Commentary 

to Regulation E makes clear that EFTs 

from a securities account to purchase 

goods or services or obtain cash are 

regulated under EFTA.52

5. Consumer Protections Under EFTA 

and Regulation E 

Financial institutions have a number 

of legal obligations under EFTA and 

Regulation E. Among the most 

important are error resolution and limits 

on consumers’ liability for unauthorized 

EFTs, and well as initial and ongoing 

disclosures. A financial institution has 

investigation and error resolution 

obligations under Regulation E when a 

consumer notifies the financial 

institution of an error, with limited 

exceptions.53 EFTA and Regulation E 

define the term ‘‘error’’ to include, 

among other things, ‘‘an unauthorized 

electronic fund transfer.’’ 54 Subject to 

certain exceptions, Regulation E defines 

an unauthorized EFT to mean an EFT 

from a consumer’s account initiated by 

a person other than the consumer 

without actual authority to initiate the 

transfer and from which the consumer 

receives no benefit.55 Unauthorized 

EFTs include transfers initiated by a 

person who obtained a consumer’s 

access device through fraud or robbery 

and consumer transfers at an ATM that 

were induced by force. Another 

example of an unauthorized EFT is 

when a bad actor obtains a consumer’s 

account credential through computer 

hacking or other forms of cyber theft 

and uses that credential to steal funds.56

EFTA and Regulation E place limits on 

a consumer’s liability for unauthorized 

EFTs, based on a number of factors. 

A financial institution must provide 

initial disclosures of the terms and 

conditions of EFT services before the 

first EFT is made or at the time the 

consumer contracts for an EFT 

service.57 The disclosures must include 

a summary of various consumer rights 

under Regulation E, including the 

consumer’s liability for unauthorized 

EFTs, the types of EFTs the consumer 

may make, limits on the frequency or 

dollar amount, fees charged by the 

financial institution, and the errorresolution procedures. Regulation E also 

requires a financial institution to 

provide regular, periodic statements, 

and change-in-terms notices.58

Regulation E contains model forms and 

clauses with respect to the required 

disclosures.59 Note that accounts that 

separately meet the definition of a gift 

card would have different obligations 

under the Gift Card Rule and generally 

would not be subject to the remainder 

of subpart A of Regulation E.60

In sum, market participants offering 

new types of payment mechanisms to 

facilitate electronic fund transfers 

should understand whether their 

account meets the definition of ‘‘other 

consumer asset account,’’ including 

whether it is established for ‘‘personal, 

family, or household purposes.’’ 

III. Regulatory Matters 

This is a proposed interpretive rule 

issued under the CFPB’s authority to 

interpret EFTA and Regulation E, 

including under section 1022(b)(1) of 

the Consumer Financial Protection Act 

of 2010, which authorizes guidance as 

may be necessary or appropriate to 

enable the CFPB to administer and carry 

out the purposes and objectives of 

Federal consumer financial laws.61

While not required under the 

Administrative Procedure Act (APA), 

the CFPB is soliciting comments on the 

proposal and may make revisions when 

it issues a final interpretive rule as 

appropriate in light of feedback 

received. 

By operation of EFTA section 916(d), 

no provision of EFTA sections 916 or 

917 imposing liability would apply to 

any act done or omitted in good faith in 

conformity with the final interpretive 

rule, notwithstanding that after such act 

or omission has occurred, the final 

interpretive rule is amended, rescinded, 

or determined by judicial or other 

authority to be invalid for any reason.62

The CFPB has determined that this 

proposed interpretive rule, if finalized, 

would not impose any new or revise any 

existing recordkeeping, reporting, or 

disclosure requirements on covered 

entities or members of the public that 

would be collections of information 

requiring approval by the Office of 

Management and Budget under the 

Paperwork Reduction Act.63

Rohit Chopra, 

Director, Consumer Financial Protection 

Bureau. 

[FR Doc. 2025–00565 Filed 1–14–25; 8:45 am] 

BILLING CODE 4810–AM–P 


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