Articles ZEK Earns Win for Bank in EFTA Claim Dispute October 28, 2025 Arbitration Decision Dismisses Claim That EFTA Governs Wire Transfers New York, NY – Zeichner Ellman & Krause LLP partners Bryan D. Leinbach and Barry J. Glickman achieved a significant victory in a recent arbitration involving one of the major hot-button issues in the area of bank payments today by obtaining a decision dismissing an Electronic Funds Transfer Act (EFTA) claim against one of ZEK’s bank clients, despite the holding earlier this year by the United States District Court for the Southern District of New York in The People of the State of New York, by Leticia James v. Citibank, N.A., 763 F. Supp. 3d 496 (S.D.N.Y. 2025) (the “NYAG Decision”). In the NYAG Decision, the Court denied defendant bank’s motion to dismiss plaintiff’s Electronic Funds Transfer Act (“EFTA”) claim, finding EFTA may govern wire transfers where payment orders directing the wire were transmitted to the defendant electronically. The decision is one of significance because damages may be more easily proven and bank defenses more limited applying EFTA than in a case to which UCC Article 4A governing payment orders (often called wire transfers) applies. This issue has been certified by the District Court for appeal to the Second Circuit; that appeal is currently proceeding. While not a determination of a court, the American Arbitration Association decision is well-reasoned and written in the form of a judicial decision. It found that the NYAG Decision was not convincing and implied that it was wrongly decided because it did not follow the language of EFTA/Reg E and years of court precedent holding that funds transfers through commercial wire transfer networks are governed by UCC Article 4A and not EFTA/Reg E. Use the following link to read the full American Arbitration Association decision: AAA Decision on Motion to Dismiss EFTA Claim. Related Services: Arbitration, Banking Litigation, Litigation, Restructuring and Bankruptcy
ZEK Earns Win for Bank in EFTA Claim Dispute October 28, 2025 Arbitration Decision Dismisses Claim That EFTA Governs Wire Transfers New York, NY – Zeichner Ellman & Krause LLP partners Bryan D. Leinbach and Barry J. Glickman achieved a significant victory in a recent arbitration involving one of the major hot-button issues in the area of bank payments today by obtaining a decision dismissing an Electronic Funds Transfer Act (EFTA) claim against one of ZEK’s bank clients, despite the holding earlier this year by the United States District Court for the Southern District of New York in The People of the State of New York, by Leticia James v. Citibank, N.A., 763 F. Supp. 3d 496 (S.D.N.Y. 2025) (the “NYAG Decision”). In the NYAG Decision, the Court denied defendant bank’s motion to dismiss plaintiff’s Electronic Funds Transfer Act (“EFTA”) claim, finding EFTA may govern wire transfers where payment orders directing the wire were transmitted to the defendant electronically. The decision is one of significance because damages may be more easily proven and bank defenses more limited applying EFTA than in a case to which UCC Article 4A governing payment orders (often called wire transfers) applies. This issue has been certified by the District Court for appeal to the Second Circuit; that appeal is currently proceeding. While not a determination of a court, the American Arbitration Association decision is well-reasoned and written in the form of a judicial decision. It found that the NYAG Decision was not convincing and implied that it was wrongly decided because it did not follow the language of EFTA/Reg E and years of court precedent holding that funds transfers through commercial wire transfer networks are governed by UCC Article 4A and not EFTA/Reg E. Use the following link to read the full American Arbitration Association decision: AAA Decision on Motion to Dismiss EFTA Claim. Related Services: Arbitration, Banking Litigation, Litigation, Restructuring and Bankruptcy