Federal Guidelines for Debit Cards

Debit cards are plastic cards that allow individuals to make purchases without using cash. Debit cards, unlike credit cards, use an individual's cash in transactions. As with credit cards, the federal government has established guidelines for debit card usage. These guidelines cover debit card transactions as well as lost or stolen cards.

Regulation E (Receipts)

Section 205.9 of Regulation E states that financial institutions must provide consumers with receipts immediately upon making a transaction. It also stipulates what should be included on the receipt. First, receipts should mention the amount of any transfer of money as well as any transaction fees. Also, the location of the terminal should be specified by noting the terminal code or number. In some cases, the street address along with city and state may be present. ATM machine receipts at a bank should also clearly state remaining account balances as well as starting balances before transfers are made.

Regulation E (Identity Theft)

Regulation E is the policy created by the board of governors of the Federal Reserve System to regulate all electronic fund transfers in an effort to protect those who make these transactions. Under this policy, debit card users are required to report their lost or stolen card to their bank within 2 days of noticing its absence. If you meet this deadline, according to Consumer-action.org, "you will only be liable for $50 of your losses. Additionally, if you notice transactions that you did not make on your monthly statement, you must report it within 60 days to your bank. Regulation E says that if you miss this deadline, you may forfeit the opportunity to receive any refunds.

New Overdraft Regulations

On July 1, 2010, the Federal Reserve Bank issued new regulations to prevent banks from automatically enrolling its customers in overdraft protection. For debit card users, this means that there is purchase coverage if you do not opt in. As an example, according to Western Security Bank, by opting out of overdraft protection, a debit card purchase that is over by 5 cents will not be covered by the bank. Still, the Federal Reserve Bank maintains that providing consumers with this option is the best way to protect them from costly overdraft fees.