§1693h Liability of Financial Institutions

Summary

Banks and other financial institutions must pay customers for harm caused when they do not make an electronic money transfer the right way or on time after the customer properly asks for it. This also covers cases where the bank failed to credit a deposit that would have covered the transfer and cases where the bank did not stop a preauthorized (automatic) payment when asked. The bank is not responsible if the customer's account had insufficient funds, the money was legally held, the transfer would exceed a credit limit, an ATM had no cash, or other agency rules say the same. A bank is not responsible if it can show the problem was caused by an act of God or something beyond its control and it used reasonable care and effort. The bank is also not responsible if the customer knew about a technical malfunction when trying to make the transfer. If the error was unintentional and happened despite reasonable procedures, the bank must pay only the actual harm the customer proves. If an ATM operator properly posted a required notice but someone else later removed or damaged it, the operator is not liable for that missing notice.