Unauthorized EFT?
This is why I love my job. A member called with an interesting issue. We don't know the answer, and we don't know that there is an answer. But it is fascinating, in a compliance kind of way.
The situation. A member opens a joint account with her minor child. The credit union has a policy whereby they will not issue a debit card to a minor. Therefore, they issue a debit card just to the mother. The mother now reports that the daughter has withdrawn $500 at an ATM, and she'd like the credit union to reimburse her via Regulation E's unauthorized EFT provisions. Regulation E does not really address this situation.
Here are some observations:
- The daughter is joint, so she has a right to all the money. So where is the harm?
- Is the joint relationship an implicit authority for the daughter to use the card?
- The account is a joint account, not a UTMA.
- The mother is adamant that the transaction was unauthorized.
- How did the daughter get the PIN?
So what's a credit union to do? I'd love to hear your thoughts.