Electronic Funds Transfer (EFT) Law and Legal Definition
Electronic Funds Transfer (EFT) is a system of transferring money from one bank account directly to another without any paper money transactions. It is used for both credit transfers, such as payroll payments, and for debit transfers, such as mortgage payments. EFT reduces administrative costs, simplifies bookkeeping and increases efficiency. The statutory definition under Electronic Funds Transfer Act (EFTA) is as follows:
The term “electronic fund transfer” means any transfer of funds, other than a transaction originated by check, draft, or similar paper instrument, which is initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account. Such term includes, but is not limited to, point-of-sale transfers, automated teller machine transactions, direct deposits or withdrawals of funds, and transfers initiated by telephone. Such term does not include—
(A) any check guarantee or authorization service which does not directly result in a debit or credit to a consumer’s account:
(B) any transfer of funds, other than those processed by automated clearinghouse, made by a financial institution on behalf of a consumer by means of a service that transfers funds held at either Federal Reserve banks or other depository institutions and which is not designed primarily to transfer funds on behalf of a consumer;
(C) any transaction the primary purpose of which is the purchase or sale of securities or commodities through a broker-dealer registered with or regulated by the Securities and Exchange Commission;
(D) any automatic transfer from a savings account to a demand deposit account pursuant to an agreement between a consumer and a financial institution for the purpose of covering an overdraft or maintaining an agreed upon minimum balance in the consumer’s demand deposit account; or
(E) any transfer of funds which is initiated by a telephone conversation between a consumer and an officer or employee of a financial institution which is not pursuant to a prearranged plan and under which periodic or recurring transfers are not contemplated
Legal Definition list
- Electronic Funds Transfer (EFT)
- Electronic Fund Transfer System [EFTS]
- Electronic Fund Transfer
- Electronic Fish Ticket [Wildlife and Fisheries]
- Electronic Export Information
- Electronic Games of Skill
- Electronic Gaming
- Electronic Gaming Table
- Electronic Government
- Electronic Hearing Docket
- Electronic Instant Bingo Game
