Electronic Fund Transfer Act (EFTA, 1978)

1) Link to the Text of the Act
Read the statute (15 U.S.C. § 1693 et seq.)

2) Why It Was Done
The EFTA was enacted to protect consumers in electronic banking transactions, ensuring fair treatment, clear disclosures, and protection against unauthorized transfers.

3) Pre-existing Law or Constitutional Rights
Before EFTA, consumer protections for electronic payments (ATM, debit cards, direct deposit) were minimal. Traditional banking laws didn’t account for new technologies.

4) Overreach or Proper Role?
Supporters say it gave consumers confidence in electronic banking. Critics argue it imposed additional compliance burdens on banks and limited flexibility in resolving disputes.

5) Who or What It Controls

• Financial institutions offering electronic fund transfer services
• Consumers (gain rights to error resolution and liability limits for fraud)
• Merchants (indirectly affected through debit card and EFT systems)

6) Key Sections / Citations

• 15 U.S.C. § 1693f: Error resolution procedures
• 15 U.S.C. § 1693g: Limits on consumer liability for unauthorized transfers
• 15 U.S.C. § 1693h: Disclosure requirements

7) Recent Changes or Live Controversies

• Regulation E (CFPB) implements EFTA rules
• Ongoing issues include peer-to-peer payment apps (Venmo, Zelle, CashApp)
• Rising disputes over liability for fraud in electronic transfers

8) Official Sources

• U.S. Code – Title 15, Subchapter VI
• Consumer Financial Protection Bureau – EFTA/Regulation E
• Federal Reserve – Regulation E

• Consumer Protection
• Finance
• Banking
• Electronic Payments
• Privacy