Regulation E is a key piece of banking legislation in the U.S. that implements the Electronic Fund Transfer Act (EFTA). The regulation protects consumers’ electronic payments and applies to a wide range of electronic fund transfers (EFTs), including transactions made through ATMs, debit cards, point-of-sale systems, and Automated Clearing House (ACH) networks.
What does Regulation E cover?
Regulation E requires financial institutions (FIs) to provide clear and upfront information about their EFT services. This includes:
Fee disclosures
Error resolution procedures
Consumer liability rules in the case of unauthorized transactions
One of its most critical protections is the limitation of consumer liability, provided the unauthorized transaction is reported within a certain timeframe
How are disputes handled?
When a consumer reports an error or fraudulent transaction, financial institutions must:
Investigate the issue within 10 business days
Provide provisional credit if more time is needed (up to 45 days)
This protects consumers while investigations are ongoing and encourages prompt resolution from institutions.
Why is Regulation E still important?
As digital banking grows — alongside the risk of digital banking fraud — Regulation E remains a cornerstone of consumer protection. For financial institutions, Regulation E compliance is not just a legal requirement — itis also essential for maintaining customer trust and managing fraud risks.
How FIs can reduce Regulation E fraud liability costs
To reduce the liability costs associated with Regulation E, FIs can partner with providers that offer strong fraud prevention and provable authentication solutions. Fraud prevention measures that include device identity, endpoint signals, and biometric step-up authentication can create audit-ready proof of customer consent for FIs that reduce fraud exposure and build customer trust.