1. HOT TOPICS: Date of Delinquency, the Electronic Funds Transfer Act and Appendix E of the Fair Credit Reporting Act
JOHN H. BEDARD, JR.
BEDARD LAW GROUP, P.C.
Bedardlawgroup.com
DENNIS J. BARTON III
THE BARTON LAW GROUP,LLC
Bartonlawllc.com
Dennis J. Barton III
Managing Attorney
The Barton Law Group, LLC
JOHN H. BEDARD, JR.
BEDARD LAW GROUP, P.C.
Bedardlawgroup.com

2. Legal Disclaimer
Any content included in this presentation or discussed during this session (“Content”) is presented for educational and general reference purposes only. The Bedard Law Group, LLC, The Barton Law Group, LLC , John Bedard, and Dennis J. Barton III (collectively referred to as “BLG”) provide the Content as a courtesy to be used for informational purposes only. The Contents are not intended to serve as legal advice. BLG does not represent or warrant that the Content is accurate, complete or current for any specific or particular purpose or application.
This information is not intended to be a full and exhaustive explanation of the law in any area, nor should it be used to replace the advice of your own legal counsel. The BLG is the copyright owner of all session contents herein unless otherwise noted; contents are distributed by BLG with its sole permission. By using the Contents in any way, whether or not authorized, the user assumes all risk and hereby releases BLG from any liability associated with the Content.
The views and opinions of BLG are solely those of BLG and not necessarily the view and opinions of anyone else.

3. Electronic Fund Transfer Act (and Regulation E)
AGENDA
Date of Delinquency
Electronic Fund Transfer Act (and Regulation E)
Appendix E of the FCRA

4. Date of Delinquency
A person who furnishes information to a consumer reporting agency regarding a delinquent account being placed for collection, charged to profit or loss, or subjected to any similar action shall, not later than 90 days after furnishing the information, notify the agency of the date of delinquency on the account, which shall be the month and year of the commencement of the delinquency on the account that immediately preceded the action.
©2019 ACA International

5. Date of Delinquency DoD
Performing
Delinquency 1
D1 Cured
Delinquency 2
Charge Off
Placed For Collection
Furnished
DoD
©2019 ACA International
. . .month and year of the commencement of the delinquency on the account that immediately preceded the action.

6. Date of Delinquency DoD
Performing
Delinquency 1
D1 Cured
Delinquency 2
Partial Payment
Placed for Collection
Charged Off
Furnished
DoD
©2019 ACA International
. . .month and year of the commencement of the delinquency on the account that immediately preceded the action.

7. Date of Delinquency: Rules of Construction
Provided the consumer does not dispute, a furnisher complies with DoD obligations if it does any one of the following:
Report the same DoD as the creditor reported
If the creditor did not report, report the date obtained by following the furnisher’s reasonable procedures for obtaining the DoD from the creditor or other reliable source, or
If (1) and (2) are not successful, report the date derived by following the furnisher’s reasonable procedures to ensure the date reported precedes the date on which the account is placed for collection, charged to profit or loss, or subjected to similar action
©2019 ACA International

8. Date of Delinquency
Not proper to jump straight to 3, without first trying 1 and 2
No private right of action under FCRA
False representation under FDCPA?
See, Daley v. A & S Collection Assocs., Inc., 717 F. Supp. 2d 1150 (D. Or. 2010)
©2019 ACA International

9. EFTA

10. Electronic Funds Transfer Act
Four sources for interpretation:
EFTA - 15 USC 1693 et seq.
CFPB Rules (Reg E) - 12 CFR et seq.
Official Staff Interpretations, Appendix C to Reg E
Case Law

11. Electronic Funds Transfer Act
Electronic transfer of funds to/from a consumer account;*
Initiated through phone, computer, or other electronic device;
To order, instruct, or authorize a financial institution to debit or credit an account.
Direct withdrawals of funds;
Transfers initiated by telephone; and
Any debit card transaction.**
*Checking, savings, or other consumer asset account established primarily for personal, family, or household purposes.
**Added by Regulation E.

12. Electronic Funds Transfer Act
Does not include:
checks, drafts, paper instruments even if made at an electronic terminal
check guarantee or authorization
Credit Cards – they are not “asset accounts” under the Act (no money transferred from one account to another).
certain transfers between financial institutions or businesses
securities and commodities transfers
certain automatic transfers by account-holding institution
certain telephone initiated transfers between consumers and financial institutions

13. Electronic Funds Transfer Act
“Preauthorized Electronic Funds Transfer” = [a]n electronic fund transfer authorized in advance to recur at substantially regular intervals.
Electronic fund transfer using information from a check:
Check, draft, or similar paper instrument is used as a source of information to initiate a one-time electronic fund transfer from a consumer’s account. The consumer must authorize the transfer.
Authorization is obtained when consumer receives notice 10 days in advance of transfer.
Consumer must give written authorization and receive a copy (includes digital signature and security codes).

14. ONE YEAR STATUTE OF LIMITATIONS
Electronic Funds Transfer Act
Civil Liability - 15 USC 1693m(a)
Actual damages
Statutory damages
(A) Individual action: $ 100 nor greater than $ 1,000
(B) Case action: no minimum for class rep and lesser of
$500,000 or 1% net worth
Court costs and reasonable attorney’s fees
ONE YEAR STATUTE OF LIMITATIONS

15. Electronic Funds Transfer Act
Three Defenses
Bona Fide Error
Good Faith Reliance
“I Made It Right”

16. Electronic Funds Transfer Act Bona Fide Error - 15 USC 1693m(c)
No liability if defendant shows by a preponderance of evidence that the violation was not intentional and resulted from a bona fide error notwithstanding the maintenance of procedures that are reasonably adapted to avoid any such error.

17. Electronic Funds Transfer Act Good Faith Reliance - 15 USC 1693m(d)
No civil liability under section 1693m if:
(1) Act/omission in good faith and in conformity with the CFPB’s rules, regulations, or interpretations, or
(2) any failure to make disclosure in proper form if a financial institution utilized an appropriate model clause issued by the Bureau or the Federal Reserve Board (even if the rule, regulation, or interpretation changed after the act or omission).

18. Electronic Funds Transfer Act “I Made It Right” Defense 15 USC 1693m(e)
No Liability if:
Notify consumer of a EFTA compliance failure;
Prior to the filing of a lawsuit;
Comply with EFTA’s requirements;
Makes adjustment to the consumer's account; and
Pays actual damages.

19. Bad Faith/Harassment - 15 USC 1693m(f)
On a finding by the court that an unsuccessful action under this section was brought in bad faith or for purposes of harassment, the court shall award to the defendant attorney's fees reasonable in relation to the work expended and costs.

20. APPENDIX E
What?

21. Dodd Frank

22. Policies and Procedures – regarding accuracy and integrity
Guidelines – must consider and incorporate guidelines in Appendix E
Reviewing and Updating – must review/update to ensure effectiveness

23. Section I: Nature, Scope, and Objectives of Policies and Procedures
Section II: Objectives [of Policies and Procedures]
Section III: Specific Components of Policies and Procedures

24. Section I: Nature, Scope, and Objectives of Policies and Procedures
P&P’s should be appropriate to the nature, size, complexity, and scope of the furnisher. Should consider:
Type of business
Nature and frequency of furnishing
Technology used to furnish
P&P’s should be reasonably designed to ensure data accuracy:
Identity of proper consumer
Reflects terms of and liability for accounts
Reflects consumer performance on accounts

25. Section I: Nature, Scope, and Objectives of Policies and Procedures
P&P’s should be designed to ensure data integrity:
Furnished information is substantiated by furnishers’ records (see consent orders on “substantiation”)
Furnished in manner likely to minimize inaccuracy, including:
Appropriate identifying information about the consumer
Standardized and understandable form and time period
Conduct reasonable investigations and take actions in response
Properly updating accounts

26. Section II: Establishing and Implementing Policies and Procedures
Identify practices or activities that could compromise accuracy or integrity, such as:
Reviewing existing furnishing practices, including technology and reporting frequency
Reviewing historical records relating to accuracy, integrity, disputes
Reviewing data/feedback from bureaus/eoscar, consumers, and furnisher’s staff
Considering impact of practices on consumers

27. Section II: Establishing and Implementing Policies and Procedures
Evaluate effectiveness of existing policies and procedures
Evaluate effectiveness of specific methods used to provide information to the CRAs

28. Section III: Specific Components Of Policies and Procedures
(P&P’s should address the following. Not comprehensive List – 13 items total)
Record retention for “reasonable period of time” to substantiate disputed information
Internal Controls regarding accuracy and integrity, *such as*
Standard procedures for verifying random samples of furnished information
Training staff to implement P&Ps
Service provider oversight whose activities may affect accuracy or integrity

29. Section III: Specific Components Of Policies and Procedures
Prevention of re-aging, duplicative reporting, or similar problems affecting accuracy and integrity
Conducting reasonable investigations of disputes
Furnishing sufficient information to enable CRAs to identify the proper consumer
Periodic evaluation of furnisher’s own practices, including dispute investigations, corrections of inaccurate information, other facts affecting accuracy and integrity

31. HOT TOPICS: Date of Delinquency, the Electronic Funds Transfer Act and Appendix E of the Fair Credit Reporting Act
JOHN H. BEDARD, JR.
BEDARD LAW GROUP, P.C.
Bedardlawgroup.com
DENNIS J. BARTON III
THE BARTON LAW GROUP,LLC
Bartonlawllc.com
Dennis J. Barton III
Managing Attorney
The Barton Law Group, LLC
JOHN H. BEDARD, JR.
BEDARD LAW GROUP, P.C.
Bedardlawgroup.com