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#693235 - 02/26/07 05:54 PM Health Savings accounts & debit card use pitfalls
lefty Offline
100 Club
lefty
Joined: Oct 2002
Posts: 188
What are the main reasons why a bank would not offer a debit card on new Health Savings Accounts?

I realize that Regulation E may not be applicable and if it isn't what impact might that have on dispute resolution? Is disputes the main area one would need to be concerned about.

I look at the use of a debit card being a big plus to the operational aspects of processing, however I do not want to be blind to any regulatory issues.

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#693627 - 02/27/07 01:28 AM Re: Health Savings accounts & debit card use pitfalls lefty
rlcarey Offline
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rlcarey
Joined: Jul 2001
Posts: 83,225
Galveston, TX
Well, it's not that Reg E "may" not be applicable - it just plain isn't applicable unless you choose to make it so through your contractual agreements. However, that doesn't mean that VISA/MC rules won't apply - you would have to refer to your card issuers agreement.

The only pitfall is if a debit card transaction (that you cannot return) causes an overdraft. You will need to decide how you handle it.
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#693802 - 02/27/07 03:11 PM Re: Health Savings accounts & debit card use pitfalls rlcarey
lefty Offline
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lefty
Joined: Oct 2002
Posts: 188
I didn't think there was an option if Reg E is not applicable and we should change our initial disclosures and statements to revise language that would remove Regulation E disclosures and retain the language that discusses the Visa liability coverage.

My understanding and reading previous posts is that Regulation E is not covering debit card activity that are linked to a Health Savings account.

The returning of a transaction that causes an overdraft is definitely a concern.

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