There are a couple of settings that impact this. The first is on the general tab of settings. This selects the contact type for contacts.
The second one is to specify the contact type for use with AP EFT notices which is what you're dealing with here.
If selecting a vendor type, the email is pulled from the vendor record:
If selecting Vendor EFT Bank Contact you need to click on the EFT bank information tab. There you can select the Default bank. Make sure EFT status is set to EFT. There is where the email would be entered.