Debit/ATM Cards for Minors

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Question:

Our financial institution wants to offer atm/debit cards to minors. I was hoping for some direction with the following: <ul><li>Do we need specific information about this in the EFT disclosure?<li>If we offer cards to minors between 14-18 is there a discrimnation issue?<Li>I am assuming we need to have a liability form signed by the parents any thoughts on what should be included?</ul>

Answer:

Answer by Randy Carey:You are going to have to check your issuer's agreement. VISA use to require that the cardholder was at least eighteen. Whether or not the minor can be held liable on a checking account prior to being eighteen will be based on state law.

Answer:

Answer by John Burnett:Some states specifically allow deposit accounts for minors and address the minority issue by saying the contracts will be enforceable without regard to the fact of minority (the wording will vary, but you get the drift). None of those laws that I have seen includes a minimum age in the statute. I guess the lawmakers assume some form of common sense on the part of the banks.

First published on BankersOnline.com 12/13/10