On April 13, 2020, the CFPB issued and interpretive rule to provide guidance to government agencies distributing aid to consumers in response to the COVID-19 pandemic. The CFPB concluded that certain pandemic-relief payments are not “government benefits” for purposes of Regulation E and the Electronic Fund Transfer Act (EFTA) and are therefore not subject to the compulsory use prohibition in EFTA, provided that certain conditions are met. Specifically, 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

The rule became effective April 27, 2020.


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