The Electronic Funds Transfer Act

The Electronic Funds Transfer Act Summary​

The Electronic Funds Transfer Act (EFTA) of 1978 protects consumers who use electronic fund transfers (EFTs). It establishes the rights and responsibilities of consumers and financial institutions. 

​

What does the EFTA do? 

• Requires financial institutions to have procedures for preauthorized transfers

• Requires financial institutions to set liability limits for unauthorized transfers

• Prohibits banks from charging overdraft fees without the account holder's permission

• Requires notices and creates rights for consumers who send international wire transfers

• Sets caps on interchange debit card fees

​

How is the EFTA implemented?

• The EFTA is implemented through Regulation E, which includes official interpretations 

• The Credit CARD Act and the Dodd-Frank Act have made amendments to the EFTA 

​

What does EFT stand for?

An EFT, or direct deposit, is a digital money movement from one bank account to another. 

​

What is not included in EFTA regulations?

Credit card transactions are not included in EFTA regulations because they are covered by the Fair Credit Billing Act.