---
kind: "section"
citation: "15 U.S.C. § 1693h"
title: "15"
title_heading: "Commerce and Trade"
number: "1693h"
heading: "Liability of financial institutions"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/15/1693h"
units:
  - "Chapter 41 — Consumer Credit Protection"
  - "Subchapter VI — Electronic Fund Transfers"
---

# §1693h. Liability of financial institutions

- (a) **Action or failure to act proximately causing damages—** Subject to subsections [(b)](#b) and [(c)](#c), a [financial institution](/usc/15/1693a.md?p=9) shall be liable to a [consumer](/usc/15/1692a.md?p=3) for all damages proximately caused by—
  - (1) the [financial institution](/usc/15/1693a.md?p=9)’s failure to make an [electronic fund transfer](/usc/15/1693a.md?p=7), in accordance with the terms and conditions of an [account](/usc/15/1693a.md?p=2), in the correct amount or in a timely manner when properly instructed to do so by the [consumer](/usc/15/1692a.md?p=3), except where—
    - (A) the [consumer](/usc/15/1692a.md?p=3)’s [account](/usc/15/1693a.md?p=2) has insufficient funds;
    - (B) the funds are subject to legal process or other encumbrance restricting such transfer;
    - (C) such transfer would exceed an established [credit](/usc/15/1602.md?p=f) limit;
    - (D) an [electronic terminal](/usc/15/1693a.md?p=8) has insufficient cash to complete the transaction; or
    - (E) as otherwise provided in regulations of the [Bureau](/usc/15/1692a.md?p=1);
  - (2) the [financial institution](/usc/15/1693a.md?p=9)’s failure to make an [electronic fund transfer](/usc/15/1693a.md?p=7) due to insufficient funds when the financal[^1] institution failed to [credit](/usc/15/1602.md?p=f), in accordance with the terms and conditions of an [account](/usc/15/1693a.md?p=2), a deposit of funds to the [consumer](/usc/15/1692a.md?p=3)’s [account](/usc/15/1693a.md?p=2) which would have provided sufficient funds to make the transfer, and
  - (3) the [financial institution](/usc/15/1693a.md?p=9)’s failure to stop payment of a preauthorized transfer from a [consumer](/usc/15/1692a.md?p=3)’s [account](/usc/15/1693a.md?p=2) when instructed to do so in accordance with the terms and conditions of the [account](/usc/15/1693a.md?p=2).
- (b) **Acts of God and technical malfunctions—** A [financial institution](/usc/15/1693a.md?p=9) shall not be liable under subsection [(a)(1)](#a-1) or (2) if the [financial institution](/usc/15/1693a.md?p=9) shows by a preponderance of the evidence that its action or failure to act resulted from—
  - (1) an act of God or other circumstance beyond its control, that it exercised reasonable care to prevent such an occurrence, and that it exercised such diligence as the circumstances required; or
  - (2) a technical malfunction which was known to the [consumer](/usc/15/1692a.md?p=3) at the time he attempted to initiate an [electronic fund transfer](/usc/15/1693a.md?p=7) or, in the case of a preauthorized transfer, at the time such transfer should have occurred.
- (c) **Intent—** In the case of a failure described in [subsection (a)](#a) which was not intentional and which resulted from a bona fide error, notwithstanding the maintenance of procedures reasonably adapted to avoid any such error, the [financial institution](/usc/15/1693a.md?p=9) shall be liable for actual damages proved.
- (d) **Exception for damaged notices—** If the notice required to be posted pursuant to [section 1693b(d)(3)(B)(i) of this title](/usc/15/1693b.md) by an automated teller machine operator has been posted by such operator in compliance with such section and the notice is subsequently removed, damaged, or altered by any [person](/usc/15/1602.md?p=e) other than the operator of the automated teller machine, the operator shall have no liability under this section for failure to comply with [section 1693b(d)(3)(B)(i) of this title](/usc/15/1693b.md).

## Footnotes

[^1]: So in original. Probably should be “financial”.

## Source credit

(Pub. L. 90–321, title IX, § 910, as added Pub. L. 95–630, title XX, § 2001, Nov. 10, 1978, 92 Stat. 3735; amended Pub. L. 106–102, title VII, § 705, Nov. 12, 1999, 113 Stat. 1465; Pub. L. 111–203, title X, § 1084(1), July 21, 2010, 124 Stat. 2081.)

## Notes

### Editorial Notes

### Amendments

2010—Subsec. (a)(1)(E). Pub. L. 111–203 substituted “Bureau” for “Board”.

1999—Subsec. (d). Pub. L. 106–102 added subsec. (d).

### Statutory Notes and Related Subsidiaries

### Effective Date of 2010 Amendment

Amendment by Pub. L. 111–203 effective on the designated transfer date, see section 1100H of Pub. L. 111–203, set out as a note under section 552a of Title 5, Government Organization and Employees.