What Is a Descriptive Statement?
A descriptive statement is a bank statement that lists deposits, withdrawals, service fees, and other such transactions in chronological order. The term "descriptive statement" sometimes refers specifically to information on a statement for which no physical item (such as a check) is enclosed.
- Banks must provide monthly descriptive statements to account holders who make electronic funds transfers.
- Electronic funds transfers include debit card payments and ATM transactions.
- The Consumer Financial Protection Bureau has authority over Regulation E, which sets the rules for descriptive statements.
Understanding a Descriptive Statement
Under the Federal Reserve System's Regulation E, financial institutions must provide statements to customers for each monthly cycle in which an electronic funds transfer (EFT) has occurred. Specific examples of an EFT under Regulation E include debit card and automated teller machine (ATM) transactions, as well as automated clearing house (ACH) and non-operator-assisted telephone transfers. If no EFT has occurred, only quarterly statements are necessary.
The U.S. Federal Reserve issued Regulation E to implement the Electronic Funds Transfer Act, which the U.S. Congress passed in 1978 to provide greater protections for consumers in their banking transactions. The Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010 gave the newly created Consumer Financial Protection Bureau (CFPB) authority for rule making under the Electronic Funds Transfer Act. The CFPB has amended the rules, which also address gift cards and gift certificates, several times in the years since.
Separately, the CFPB also has authority over credit card statements, as a result of the Credit Card Accountability, Responsibility and Disclosure Act of 2009, also known as the CARD Act.
Much of Regulation E outlines the procedures that consumers are required to follow when they report errors in regard to EFTs, along with the steps that banks must take to investigate complaints and resolve them. Such errors could include the consumer receiving the wrong amount of money from an ATM, unauthorized debit card activity, or an unauthorized wire transfer. Regulation E also outlines the rules for reporting and resolving incidents involving lost or stolen debit cards.
Increasingly, banks will send descriptive statements via email or make them available electronically, due to the rise in online banking and mobile banking. While more efficient, and often less costly for the bank, this can also lead to cybersecurity threats. Consumers who receive their bank statements electronically need to take extra care to protect their sensitive data from hackers, using complex passwords, password managers, and other forms of security. They also need to review their statements, whatever form those come in, so that they can report any errors promptly.
Consumers who receive their descriptive statements electronically need to be vigilant in protecting their account information from hackers.
Examples of Descriptive Statements
As noted above, a descriptive statement will list the account holder's debit card and automated teller machine transactions, as well as automated clearing house and non-operator-assisted telephone transfers. For example:
- Debit card transactions commonly involve payments at local stores or other brick-and-mortar and online retailers.
- Automated teller machine transactions would include withdrawals at physical ATM locations.
- Automated clearing house transactions encompass both electronic credits, such as a direct deposit of the account holder's paycheck, government benefits, or stock dividends, or electronic debits, such as bill payments (even if the account holder made the payment with a physical check).
- Non-operator-assisted telephone transfers would include utility bill payments or other transactions where the account holder punches in a code to authorize the withdrawal of money from their bank account via telephone.