Academic journal article ABA Banking Journal

Prompt Payment Crediting When Payment's Via Website

Academic journal article ABA Banking Journal

Prompt Payment Crediting When Payment's Via Website

Article excerpt

Q. Please explain the meaning of Reg Z, Sect. 226.10, regarding prompt crediting of payments initiated on a bank's website:

"Payment made via the creditor's website is received on the date on which the consumer authorizes the creditor to effect the payment, even if the consumer gives the instruction authorizing that payment in advance of the date on which the creditor is authorized to effect the payment. If the consumer authorizes the creditor to effect the payment immediately, but the consumer's instruction is received after 5 p.m. or any later cut-off time specified by the creditor, the date on which the consumer authorizes the creditor to effect the payment is deemed to be the next business day."

Does this mean that if a consumer effects a payment on our bank's website today (say Friday, Dec. 16) authorizing the transfer to occur on Tuesday, Dec. 20, the bank has to credit the payment as of Dec. 16 even though it did not receive funds until Dec. 20?

A. No. What's key is "the date on which the consumer authorizes the creditor to effect the payment" rather than the date on which the instruction is given. For example, if your bank's online banking system allows the customer to schedule a payment immediately as of today's date (i. …

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