National Check Professional (NCP) Certification Practice Test

Which document outlines the rights and responsibilities related to electronic transactions?

1. UCC 3

2. Regulation E

3. Check 21 Act

4. UCC 2

The correct answer is: Regulation E

The correct answer is Regulation E, which is a federal regulation that implements the Electronic Fund Transfer Act (EFTA). This regulation outlines the rights and responsibilities of individuals and financial institutions concerning electronic transactions, including how funds may be transferred electronically using debit cards, ATMs, and other electronic means. Regulation E is crucial as it provides consumer protections, such as requirements for disclosure of terms and risks associated with electronic transactions and procedures for correcting errors. These protections help ensure that consumers are informed about their rights and what to expect when engaging in electronic transactions. The other choices refer to different legal frameworks and do not specifically focus on electronic transactions. UCC 3 relates to negotiable instruments and focuses on the rights and responsibilities relating to checks, but it doesn’t cover electronic transactions specifically. The Check 21 Act modifies aspects of how checks are processed electronically but does not primarily govern consumer rights around electronic transactions. UCC 2 deals with the sale of goods and again does not address electronic transactions directly.