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12 CFR 1005.6(a)(4), Liability of consumer for unauthorized transfers, says

(4) Extension of time limits. If the consumer's delay in notifying the financial institution was due to extenuating circumstances, the institution shall extend the times specified above to a reasonable period.

This is consistent with 15 USC 1693g(a) (Consumer liability / Unauthorized electronic fund transfers; limit), which establishes the time limits with a parenthetical extension, for example

within sixty days of transmittal of the statement (or in extenuating circumstances such as extended travel or hospitalization, within a reasonable time under the circumstances)

However, I can find no further guidance in the statute nor in the regulation as to the determination of "reasonable time under the circumstances." Is there any jurisprudence on this question?

I am particularly interested in the second circuit, in the case of extended travel, and in the question of whether 75 days or 95 days might be considered reasonable given that the traveler has not returned home during that period.

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    I would assume that, as with most uses of the word "reasonable", it's meant to be evaluated on a case-by-case basis if the issue arises in court. Commented Jul 4, 2022 at 22:26

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There is heaps of case law on reasonableness

It’s one of the oldest standards in common law jurisprudence. It means:

Just, rational, appropriate, ordinary, or usual in the circumstances.

In the context above, a reasonable period is probably an extension which gives the customer 60 days outside the “extenuating circumstances”.

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  • See also Boechler, P.C. v. Commissioner of Internal Revenue, 2022 WL 1177496 (U.S. April 21, 2022), in which the Court ruled that a federal time deadline is jurisdictional only if Congress clearly states that it is. If a limitations period instead is nonjurisdictional, then the limitations period is presumptively subject to equitable tolling.
    – ohwilleke
    Commented Aug 4, 2022 at 1:57
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There are only six reported cases that have interpreted 15 USC § 1693g. Only three of them address the notice requirement. Two of them are trial court orders, and one of those trial court orders and the sole reported appellate court decision, are from California.

  • Widjaja v. JPMorgan Chase Bank, N.A., 21 F.4th 579 (9th Cir. 2021) (holding that notice received from a third-party unconnected to the consumer, rather than from the consumer, did not satisfy the deadline and also holding that "Consumer failed to plausibly allege “extenuating circumstances” excusing her failure to timely report to financial institution unauthorized electronic fund transfers from her checking account, as required for reimbursement for transfers under Electronic Fund Transfer Act (EFTA), despite contention she had very limited or no access to her banking records or the internet during her extended international travel during time period at issue; contention did not explain how someone with consumer's financial means lacked adequate internet access to view her banking records for more than a year.");

  • Friedman v. 24 Hour Fitness USA, Inc., 580 F. Supp.2d 985, motion to certify appeal denied 2009 WL 545783 (C.D.Cal. 2008) (holding that the notice requirement does not bar any claims for receiving an improper payment against parties other than the financial institution);

  • Green v. Capital One, N.A., 557 F.Supp.3d 441 (S.D.N.Y. 2021). This, rather trivially concludes that notice within one business day satisfied the requirement even though it was not given while the transfers were pending, stating:"

Capital One argued in its opening brief that Green did not contact Capital One “while the transfers were pending” to stop the bank from processing them, but rather waited until the following business day to do so. Doc. 34 at 11. This is true, but it does not impact Green's claim. Rather, § 1693g(a), which presumptively caps consumer liability for unauthorized transfers at $50, provides only that “reimbursement need not be made to the consumer for losses which ... would not have occurred but for the failure of the consumer to report any loss or theft of a card or other means of access within two business days ....” Here, it is undisputed that Green reported the theft of his account information within two business days. Thus, the fact that Green called Capital One the day after the disputed transactions had posted is of no legal significance.

There is also regulatory guidance:

Both the Board of Governors of the Federal Reserve System and the CFPB have promulgated regulations implementing the EFTA. These agencies have proffered identical definitions of “unauthorized electronic fund transfer,” which are substantially the same as the definition appearing in the statute. See 12 C.F.R. § 205.2(m) (Board of Governors regulation); 12 C.F.R. § 1005.2(m) (CFPB regulation).3 The agencies have also proffered Official Interpretations of §§ 205.2(m) and 1005.2(m), respectively, elaborating on this definition. Both Official Interpretations include the so-called “fraud exception,” which states that “[a]n unauthorized [electronic funds transfer] includes a transfer initiated by a person who obtained the access device from the consumer through fraud or robbery.” See 12 C.F.R. § 205, Supp. I at 2(m) (Board of Governors’ Official Interpretation of § 205.2(m)); 12 C.F.R. § 1005, Supp. I at 2(m) (CFPB's Official Interpretation of § 1005.2(m)). An “access device” refers to “a card, code, or other means of access to a consumer's account, or any combination thereof, that may be used by the consumer to initiate electronic fund transfers.” 12 C.F.R. § 205.2(a)(1).

4 Because all provisions of 12 C.F.R. § 205.2(m) and its Official Interpretation cited to in this Opinion are identical to the corresponding provisions of § 1005.2(m) and its Official Interpretation, to Court will cite only to the Board of Governors materials for brevity.

5 The Court independently can identify no reason why it should not follow the applicable regulations and Official Interpretations. See Gale v. Hyde Park Bank, No. 02 Civ. 3663, 2007 WL 2358625, at *3 (N.D. Ill. Aug. 8, 2007) (noting, in the EFTA context, that the Board of Governors’ interpretation of its own regulations is accorded great deference) (citing Udall v. Tallman, 380 U.S. 1, 16, 85 S.Ct. 792, 13 L.Ed.2d 616 (1965)).

  • Green v. Capital One, N.A., 557 F. Supp. 3d 441, 447–48 (S.D.N.Y. 2021).

The relevant Consumer Financial Protection Bureau regulation to the notice requirement, 12 C.F.R. § 1005.6 (which should have a parallel and identical Federal Reserve Regulation) states:

(a) Conditions for liability. A consumer may be held liable, within the limitations described in paragraph (b) of this section, for an unauthorized electronic fund transfer involving the consumer's account only if the financial institution has provided the disclosures required by § 1005.7(b)(1), (2), and (3). If the unauthorized transfer involved an access device, it must be an accepted access device and the financial institution must have provided a means to identify the consumer to whom it was issued.

(b) Limitations on amount of liability. A consumer's liability for an unauthorized electronic fund transfer or a series of related unauthorized transfers shall be determined as follows:

(1) Timely notice given. If the consumer notifies the financial institution within two business days after learning of the loss or theft of the access device, the consumer's liability shall not exceed the lesser of $50 or the amount of unauthorized transfers that occur before notice to the financial institution.

(2) Timely notice not given. If the consumer fails to notify the financial institution within two business days after learning of the loss or theft of the access device, the consumer's liability shall not exceed the lesser of $500 or the sum of:

(i) $50 or the amount of unauthorized transfers that occur within the two business days, whichever is less; and

(ii) The amount of unauthorized transfers that occur after the close of two business days and before notice to the institution, provided the institution establishes that these transfers would not have occurred had the consumer notified the institution within that two-day period.

(3) Periodic statement; timely notice not given. A consumer must report an unauthorized electronic fund transfer that appears on a periodic statement within 60 days of the financial institution's transmittal of the statement to avoid liability for subsequent transfers. If the consumer fails to do so, the consumer's liability shall not exceed the amount of the unauthorized transfers that occur after the close of the 60 days and before notice to the institution, and that the institution establishes would not have occurred had the consumer notified the institution within the 60–day period. When an access device is involved in the unauthorized transfer, the consumer may be liable for other amounts set forth in paragraphs (b)(1) or (b)(2) of this section, as applicable.

(4) Extension of time limits. If the consumer's delay in notifying the financial institution was due to extenuating circumstances, the institution shall extend the times specified above to a reasonable period.

(5) Notice to financial institution. (i) Notice to a financial institution is given when a consumer takes steps reasonably necessary to provide the institution with the pertinent information, whether or not a particular employee or agent of the institution actually receives the information. (ii) The consumer may notify the institution in person, by telephone, or in writing. (iii) Written notice is considered given at the time the consumer mails the notice or delivers it for transmission to the institution by any other usual means. Notice may be considered constructively given when the institution becomes aware of circumstances leading to the reasonable belief that an unauthorized transfer to or from the consumer's account has been or may be made.

(6) Liability under state law or agreement. If state law or an agreement between the consumer and the financial institution imposes less liability than is provided by this section, the consumer's liability shall not exceed the amount imposed under the state law or agreement.

The CFPB has an FAQ on its website, although I'm not certain that this is the "Official Interpretation" reference in Green. But this does not appear to clarify the law with respect to the notice issues described in the question.

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