The Electronic Fund Transfer Act (EFTA), implemented by federal Regulation E (12 CFR Part 1005), establishes strict consumer rights governing electronic bank account debits.
1. Critical Consumer Protections Under Regulation E
Prohibition on Compulsory Preauthorized Transfers
Under 12 CFR § 1005.10(e), no creditor may condition the extension of credit upon the consumer's agreement to repay the loan through preauthorized electronic fund transfers (recurring ACH debits).
| Consumer Right | Legal Standard | Enforcement Action |
|---|---|---|
| Right to Revoke Authorization | Written or verbal notice to lender 3 business days prior | Lender must immediately cease ACH debit attempts |
| Bank Stop Payment Order | Oral or written notice to financial institution | Bank blocks specified ACH company identifier |
| Unauthorized Debit Dispute | 60-day dispute window from bank statement date | Bank must provisionally recredit funds within 10 business days |