WASHINGTON—The CFPB has issued an interpretive rule to clarify that government benefits under the Electronic Fund Transfer Act (EFTA) and Regulation E do not include assistance or economic impact payments related to the coronavirus pandemic.
NAFCU is offering additional information around what credit unions should know regarding the clarification, noting the interpretive rule takes into consideration the urgent matters posed by the spread of the coronavirus and how they relate to the distribution of pandemic-related assistance into prepaid accounts.
The interpretive rule, by excluding certain pandemic-related funds from the meaning of "government benefit," eases restrictions otherwise imposed by the EFTA and Regulation E’s compulsory use prohibition and allows payment of such funds into prepaid accounts, provided certain conditions are met, NAFCU said.
Additional Details
Specifically, the rule states government benefits do not include payments from federal, state, or local governments if those payments:
- Are made to provide assistance to consumers in response to the COVID-19 pandemic or its economic impacts
- Are not part of an already-established government benefit program
- Are made on a one-time or otherwise limited basis
- Are distributed without a general requirement that consumers apply to the agency to receive funds