If social media is used to facilitate a consumer's use of payment systems, a financial institution should keep in mind the laws, regulations, and industry rules regarding payments that may apply, including those providing disclosure and other rights to consumers. Under existing law, no additional disclosure requirements apply simply because social media is involved (for instance, providing a portal through which consumers access their accounts at a financial institution). Rather, the financial institution should continue to be aware of the existing laws, regulations, guidance, and industry rules that apply to payment systems and evaluate which will apply. These may include the following:
Electronic Fund Transfer Act/Regulation E
The Electronic Fund Transfer Act (EFTA) and its implementing Regulation E provide specific protections, including required disclosures and error resolution procedures, to individual consumers who engage in "electronic fund transfers" and "remittance transfers."
Rules Applicable to Check Transactions
When a payment occurs via a check-based transaction rather than an EFT, the transaction will be governed by applicable industry rules and/or Article 4 of the Uniform Commercial Code of the relevant state, as well as the Expedited Funds Availability Act, as implemented by Regulation CC (regarding the availability of funds and collection of checks).
- If lenders use social media to facilitate a consumer's use of payment systems, Regulation E outlines that certain disclosures must be displayed.
- Lenders should have error resolution procedures available on social media to individual consumers.