Source: https://www.consumerfinance.gov/policy-compliance/rulemaking/regulations/1005/10/
Timestamp: 2019-06-26 16:16:14
Document Index: 314011729

Matched Legal Cases: ['§ 1005', '§ 1005', '§ 1005', '§ 1005', '§ 1005', '§ 1005']

(a) Preauthorized transfers to consumer's account —
Official interpretation of 10(a) Preauthorized Transfers to Consumer's Account Show Hide
See interpretation of 10(a) Preauthorized Transfers to Consumer's Account in Supplement I
(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:
Official interpretation of 10(a)(1) Notice by Financial Institution Show Hide
See interpretation of 10(a)(1) Notice by Financial Institution in Supplement I
Official interpretation of 10(b) Written Authorization for Preauthorized Transfers From Consumer's Account Show Hide
See interpretation of 10(b) Written Authorization for Preauthorized Transfers From Consumer's Account in Supplement I
(c) Consumer's right to stop payment —
Official interpretation of 10(c) Consumer's Right to Stop Payment Show Hide
3. Alternative procedure for processing a stop-payment request. If an institution does not have the capability to block a preauthorized debit from being posted to the consumer's account - as in the case of a preauthorized debit made through a debit card network or other system, for example - the institution may instead comply with the stop-payment requirements by using a third party to block the transfer(s), as long as the consumer's account is not debited for the payment.
See interpretation of 10(c) Consumer's Right to Stop Payment in Supplement I
(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.
(d) Notice of transfers varying in amount —
Official interpretation of 10(d) Notice of Transfers Varying in Amount Show Hide
See interpretation of 10(d) Notice of Transfers Varying in Amount in Supplement I
Official interpretation of 10(d)(1) Notice Show Hide
See interpretation of 10(d)(1) Notice in Supplement I
Official interpretation of 10(d)(2) Range Show Hide
See interpretation of 10(d)(2) Range in Supplement I
(e) Compulsory use —
Official interpretation of 10(e) Compulsory Use Show Hide
See interpretation of 10(e) Compulsory Use in Supplement I
(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. This exception does not apply to a covered separate credit feature accessible by a hybrid prepaid-credit card as defined in Regulation Z, 12 CFR 1026.61.
Official interpretation of 10(e)(1) Credit Show Hide
2. Overdraft credit plans not accessible by hybrid prepaid-credit cards.
i. Section 1005.10(e)(1) provides an exception from the general rule for an overdraft credit plan other than for a covered separate credit feature accessible by a hybrid prepaid-credit card as defined in Regulation Z, 12 CFR 1026.61. A financial institution may therefore require the automatic repayment of an overdraft credit plan, other than a covered separate credit feature accessible by a hybrid prepaid-credit card, even if the overdraft extension is charged to an open-end account that may be accessed by the consumer in ways other than by overdrafts.
3. Applicability to covered separate credit features accessible by hybrid prepaid-credit cards.
i. Under § 1005.10(e)(1), creditors may not require by electronic means on a preauthorized, recurring basis repayment of credit extended under a covered separate credit feature accessible by a hybrid prepaid-credit card as defined in Regulation Z, 12 CFR 1026.61. The prohibition in § 1005.10(e)(1) applies to any credit extended under such a credit feature, including preauthorized checks. See Regulation Z, 12 CFR 1026.61, and comment 61(a)(1)–3.
ii. Under Regulation Z, 12 CFR 1026.12(d)(1), a card issuer may not take any action, either before or after termination of credit card privileges, to offset a cardholder’s indebtedness arising from a consumer credit transaction under the relevant credit card plan against funds of the cardholder held on deposit with the card issuer. Under Regulation Z, 12 CFR 1026.12(d)(3), with respect to covered separate credit features accessible by hybrid prepaid-credit cards as defined in 12 CFR 1026.61, a card issuer generally is not prohibited from periodically deducting all or part of the cardholder’s credit card debt from a deposit account (such as a prepaid account) held with the card issuer under a plan that is authorized in writing by the cardholder, so long as the card issuer does not make such deductions to the plan more frequently than once per calendar month. A card issuer is prohibited under Regulation Z, 12 CFR 1026.12(d), from automatically deducting all or part of the cardholder’s credit card debt under a covered separate credit feature from a deposit account (such as a prepaid account) held with the card issuer on a daily or weekly basis, or whenever deposits are made to the deposit account. Section 1005.10(e)(1) further restricts the card issuer from requiring payment from a deposit account (such as a prepaid account) of credit card balances of a covered separate credit feature accessible by a hybrid prepaid-credit card by electronic means on a preauthorized, recurring basis.
ii. Mortgage plans calling for preauthorized biweekly payments that are debited electronically to the consumer’s account and produce a lower total finance charge.
See interpretation of 10(e)(1) Credit in Supplement I
Official interpretation of 10(e)(2) Employment or Government Benefit Show Hide
See interpretation of 10(e)(2) Employment or Government Benefit in Supplement I
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