Electronic Fund Transfer Act (EFTA) and E-Sign

Troutman Sanders’ Financial Services Litigation lawyers are well-equipped to respond to EFTA and E-Sign inquiries, enforcement actions, and litigation, and to provide compliance advice. EFTA and Regulation E provide the basic framework for participants in electronic fund transfer systems, including the regulation of preauthorized fund transfers from client or customer bank accounts. Preauthorized transfers are a frequent source of litigation and are subject to increasing attention from the Consumer Financial Protection Bureau and other regulatory bodies.

Our lawyers have significant experience representing clients in consumer complaints involving local, state and Federal statutes that regulate not only financial institutions, but also debt collectors, loan servicers, and service contractors. Our team’s EFTA litigation and compliance experience, coupled with our extensive experience dealing with the interaction between E-Sign and EFTA, provide the necessary framework for an effective compliance regime, strategies to respond to regulators, and to defend individual and class action lawsuits. Our lawyers provide ongoing analysis and commentary on developments in the consumer financial services industry on the Consumer Financial Services Law Monitor located at www.cfslawmonitor.com.

  • Defended national bank in multiple cases involving individual and commercial depositor claims of violations of EFTA, as well as inter-bank claims involving application and interplay of EFTA, National Automated Clearinghouse Association (NACHA) rules, and customer deposit agreements.
  • Advised multiple debt buyers and collectors on compliance with EFTA requirements pertaining to obtaining consent and consumer authorization for single and ongoing bank drafting.
  • Advised multiple consumer facing companies, including top public companies, on E-Sign requirements and obtained remote consumer consents to comply with various consumer protection statutes.
  • Defended class action and individual consumer lawsuits alleging violations of EFTA, including the defense of a credit card issuer and collection agency where we compelled arbitration and settled on favorable terms.
  • Defended national bank in matter involving bank customer’s allegations of EFTA violations in connection with allegedly unauthorized transfer of funds out of customer’s account, as well as applicable NACHA rules governing issues related to the complaint. The case was settled during discovery phase on favorable terms to our client.
  • Defended debt buyer and collection agencies against class action lawsuits alleging EFTA violations by debiting class members’ bank accounts on a recurring basis without obtaining written authorization for preauthorized electronic fund transfers, in violation of Section 907(a) of EFTA.