(a) Relation to Truth in Lending.
(1) The Electronic Fund Transfer Act and
this part govern—
(i) The addition to an accepted credit
card as defined in Regulation Z (12 CFR 226.12, comment 12-2), of
the capability to initiate electronic fund transfers;
(ii) The issuance of an access device
that permits credit extensions (under a preexisting agreement between
a consumer and a financial institution) only when the consumer’s account
is overdrawn or to maintain a specified minimum balance in the consumer’s
account, or under an overdraft service, as defined in section 205.17(a);
(iii) The addition
of an overdraft service, as defined in section 205.17(a), to an accepted
access device; and
(iv) A consumer’s liability for an unauthorized electronic fund transfer
and the investigation of errors involving an extension of credit that
occurs under an agreement between the consumer and a financial institution
to extend credit when the consumer’s account is overdrawn or to maintain
a specified minimum balance in the consumer’s account, or under an
overdraft service, as defined in section 205.17(a).
(2) The Truth in Lending
Act and Regulation Z (12 CFR part 226), which prohibit the unsolicited
issuance of credit cards, govern—
(i) The addition of a credit
feature to an accepted access device; and
(ii) Except as provided in paragraph
(a)(1)(ii) of this section, the issuance of a credit card that is
also an access device.
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(b) Preemption of inconsistent state laws.
(1) Inconsistent requirements. The Board shall determine, upon its
own motion or upon the request of a state, financial institution,
or other interested party, whether the act and this part preempt state
law relating to electronic fund transfers, or dormancy, inactivity,
or service fees, or expiration dates in the case of gift certificates,
store gift cards, or general-use prepaid cards.
(2) Standards
for determination. State law is inconsistent with the requirements
of the act and this part if it—
(i) requires or permits
a practice or act prohibited by the federal law;
(ii) provides for consumer liability
for unauthorized electronic fund transfers that exceeds the limits
imposed by the federal law;
(iii) allows longer time periods than
the federal law for investigating and correcting alleged errors, or
does not require the financial institution to credit the consumer’s
account during an error investigation in accordance with section 205.11(c)(2)(i);
or
(iv) requires
initial disclosures, periodic statements, or receipts that are different
in content from those required by the federal law except to the extent
that the disclosures relate to consumer rights granted by the state law and
not by the federal law.
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(c) State exemptions.
(1) General rule. Any state may apply for an exemption from the requirements of the
act or this part for any class of electronic fund transfers within
the state. The Board shall grant an exemption if it determines that—
(i) under state law, the class of electronic fund transfers is subject
to requirements substantially similar to those imposed by the federal
law; and
(ii) there
is adequate provision for state enforcement.
(2) Exception. To assure that the federal and state courts continue
to have concurrent jurisdiction and to aid in implementing the act—
(i) no exemption shall extend to the civil liability provisions of
section 915 of the act; and
(ii) when the Board grants an exemption,
the state law requirements shall constitute the requirements of the
federal law for purposes of section 915 of the act, except for state
law requirements not imposed by the federal law.
