Do We Disclose if We Charge Back a HELOC Check?
by John Burnett, BOL Guru Guru BIOS
Question:If a credit card or HELOC account isn't subject to Check 21 but a check drawn on these accounts can become a substitute check, do we have to make a consumer awareness disclosure if one of these checks bounces?
Answer:
Even though the check is drawn on a credit account that is not subject to subpart D of Regulation CC, the protections of Check 21 apply whenever a substitute check is created and charged to a deposit account. If the credit card or HELOC check is charged back to a consumer deposit account as a return item substitute check, and delivered to the consumer as a substitute check, the occasional recipient rule is triggered, and a consumer awareness disclosure must go with the charged-back substitute check.
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