I have a question with regard to Reg CC and the ever changing environment of delivery methods and new accounts. The local tax firms such as H & R Block, Joseph Hewitt, etc. are providing tax refunds via a debit card. The way I understand from a manager of H & R Block, the tax forms are submitted to the IRS for review. Once the IRS approves it and releases the funds to H & R Block, the funds are then captured on a secured server and transferred to the debit card. This would be done by H & R Block. The customer gets this card in the mail. Their PIN is the last 4 digits of their SSN. Their customer is told they can access the cash at any ATM. If we have a new customer to the bank who wants to open an account, and they present one of these debit cards to have the balance on their card as their opening deposit, would that transaction be considered a Next Day Item/Electronic Payment? For us to access the funds, we would have to process it like a Cash Advance, typically a type of transaction done with a credit card. I am thinking it would be an electronic payment, even though there is some manual process to it. Would that be correct? I know the debit card is a substitute for the check, but again to access the funds, we have to go through an electronic medium to get them. We would get an approval code on the machine and record it in our paperwork. With a Cash Advance, once we get that approval, it authorizes our bank to pay the funds. We can then deposit it to an account or give the customer cash. It would be the same process with a debit card.
Is a money market account considered a transactional account? With the limit of 6 checks per months, can we offer debit cards for this type of an accout?
If a customer has applied for a construction loan, and at the same time we considered that application we submitted a loan prospector to Freddie Mac to pre-qualify for the end loan, when do we have to send the earlies for the end loan? There is a six month lapse between construction to perm. Do they need to fill out a new loan application for the purpose of the earlies being dated in time with the end loan?When an applicant applies for a debit card and is denied, I understand that if you use a third party for credit checks, then you must follow the FCRA guidelines on denying that customer, but is there a reg or guideline used when you don't use a third party to collect credit info, based on bank information, such as a repeated overdrafted accounts?
Marketing has created a new program in which we will be offering new customers up to $25.00 to buy back their checks and debit cards from other banks. Does this trigger any compliance issue or 1099 reporting issues?
We want to promote our Visa debit cards by having people "show us their debit card" and be entered for a Staples Gift Card drawing. If someone doesn't have our Visa debit card and we tell them if they sign up for one, they can be entered in the drawing. Are there any compliance concerns with this?
Can a bank use the same BIN for their debit card program and their HSA program? We've been told you have to have a separate BIN number, but know of several banks that use the same BIN for both. We are looking into offering HSA's and want to be in compliance, but I cannot find the right answer.
The bank is thinking about conducting a mass mailing of debit cards to all customers who do not currently have a card. I understand that this may be done so long as we follow Section 205.5 of Reg E. The question is, can we exclude customers age 70 and over from the mailing? All of our accounts have overdraft coverage. I am concerned that due to that fact, the regulators might construe the coverage to be incidental credit, which could potentially mean an age discrimination issue per ECOA. I know that the bank can offer a product that benefits persons over age 62. Do you think excluding those over 70 (or 62) would be a benefit or a detriment? Do you think we can exclude the customers over age 70? Do you think we could use Regulation B's definition of "open-end credit" to get around the "incidental credit" issue?
Can you please clarify the bank's responsibility and liability regarding Reg E compliance and MasterCard Zero liability related to business debit cards?
I wanted to get clarification on whether ACH debits were considered in the three or six limit, so I talked with the Director of Compliance for the Federal Reserve and she told me that ACH counts in the three limit along with checks, drafts, debit cards and similar orders to pay because of the convenience. Is that correct?
Our bank would like to pay $100 to every customer who opens a checking account and signs up for direct deposit. The incentive would be paid to the account upon confirmation of the service, which could be 30-60 days from account opening. In looking at the requirements of 217.101(b), I'm concerned that an examiner could argue that duration and minimum to open an account is a factor in the promotion. It goes without saying that an account would have to be established to hold the funds and I understand that direct deposit is an ancillary service. At the same time, the whole objective of the promotion is to get new customers and new accounts. Is this promotion risky from a compliance standpoint? Should we consider this non-employee compensation for IRS reporting purposes?