Are Health Savings Account debit cards covered under the protections of Reg E?

Yes. HSA's qualify under the definition of account

226.2.(b)(1) Account means a demand deposit (checking), savings, or other consumer asset account (other than an occasional or incidental credit balance in a credit plan) held directly or indirectly by a financial institution and established primarily for personal, family, or household purposes.

Actually, I believe the answer is no:

OSC Paragraph 2(b)(2)

2. Custodial agreements. An account held under a custodial agreement that qualifies as a trust under the Internal Revenue Code, such as an individual retirement account, is considered to be held under a trust agreement for purposes of Regulation E.

HSAs are held under a trust or custodial agreement under the IRS code.

I listened to a telephone conference yesterday and they also stated they are not covered under Reg E - stating the same reason - being a custodial account.

Do most of you agree???

I didn't realize that an HSA was considered a trust account. Thanks for the correction.

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We had incorporated information into our REG E disclosure about HSA's. NOW WHAT!! Our forms provider insisted that we had to have this information in the disclosure. (should have done my own research) Does anyone else have this problem?

"Our forms provider insisted that we had to have this information in the disclosure."

Don't you normlly rely on your attorney's opinion?

No.

How many community banks have an attorney that they can ask opinions of for banking issues? We rely on our state banking agency for guidance, but they won't give a legal opinion. Compliance officers in nonmetro communities usually rely on themselves and other compliance officers to research regulatory issues, or on rare occasion, contact the proper regulatory agency.

And that is why community banks get themselves into trouble. I have never understood management that thinks they can operate a bank in today's environment with the legal risks that are present and never want to consult an attorney. I know that this decision is out of your control, but it does continue to amaze me.

rl,

I totally agree with you. We do have an attorney on retainer, but when it comes to a banking question, he won't give an opinion. I do rely on our banking assn when I have to "run something by them". Still, the ultimate decision is up to me on interpretation. I had even emailed our last FDIC EIC on a deposit issue and didn't receive a response. After two weeks of no response, I called the district office and that person is on extended leave. Not even a rejected email or a phone call from that examiner. So, where does a person turn? BankersOnline.com I am very appreciative of having this website to browse and learn from.

Bankster:

If your forms vendor insisted on it being in the disclosures - then I believe that you are well within your right to "insist" that they reprint these for you correctly. You do not want to contractually cover these accounts under the Regulation E rules unless you are required.

Back to this--Now what? We are in the same situation. We provided the Reg. E disclosures at account opending as well.

We can re-do account opening disclosures and modify our periodic statements, but what do we do about existing accounts? Is this a change in terms, or can you just "turn off" the Reg. E protections?

What type of debit card did you issue? VISA/MC? What types of protections are the customers offered through your card issuer agreement? Does your card issue know you have tied these cards to a non-qualified Reg E account? I would start with finding out what types of customer liability you can impose than work on reissuing disclosures.