The Reserve Board's decision to amend Regulation E to include EBT was made based on the idea of equal protection. And that Regulation E applies to consumers in general. The board was unconvinced that EBT should not be covered by Regulation E, and the onus is on governments to show why an exemption should be made. On the bright side for EBT, the board made the unusual move of delaying Regulation E application until 1997 at the request of the Federal EBT Task Force. The Reserve Board derives its authority to regulate electronic commerce under the Electronic Funds Transfer Act of 1992.
Regulation E is a set of regulations under the act that applies mainly to commercial banks.
Included in the regulation are such requirements as offering customer receipts for ATM transactions. Governments are also taking issue with the Reserve Board's Regulation E decision to treat public benefits like commercial bank accounts. Governments are arguing that private banks have ways unavailable to the public sector to cover their Regulation E liability. A bank can eliminate card privileges if a customer loses too many cards, for example, and banks can spread the liability cost among its customers. But governments do not have either of these possibilities.