[Code of Federal Regulations]
[Title 12, Volume 2]
[Revised as of January 1, 2002]
From the U.S. Government Printing Office via GPO Access
[CITE: 12CFR205.12]

[Page 137-138]
 
                       TITLE 12--BANKS AND BANKING
 
                   CHAPTER II--FEDERAL RESERVE SYSTEM
 
PART 205--ELECTRONIC FUND TRANSFERS (REGULATION E)--Table of Contents
 
Sec. 205.12  Relation to other laws.

    (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(a)(2), footnote 21), 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; and
    (iii) 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.
    (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.
    (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. Only state laws that are inconsistent with the act and

[[Page 138]]

this part are preempted and then only to the extent of the 
inconsistency. A state law is not inconsistent with the act and this 
part if it is more protective of consumers.
    (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 Sec. 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.
    (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.