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#1104233 - 12/31/08 03:37 PM HSA's - argh...
RBanker Offline
Power Poster
RBanker
Joined: Jul 2003
Posts: 2,675
Austin Texas
Has anyone run in to this scenario -
Employer comes to us to open HSA's for employees - one employee is on ChexSystems - large charge off at another FI...Refusal to open the account could damamge the relationship with the insurance agency the refers the business.
Now, since the contributions will be primarily from the employer, and no other deposits/contributions from the employee, I'm wondering about opening the account, but not providing the debit card. I'm trying to understand if there are account access requirements somewhere that I'm not seeing. The customer could have access via check and/or internet banking/bill pay.

Second question - how are folks handling NSF issues? Since we don't use a restricted card, it is possible for non-eligible charges, like at a gas station (which does the whole $1 hold, then charge comes in), meantime another charge/debit comes in - now the account is negative.

We're considering a one or two strike policy - after one NSF we shut down your debit, or - we warn you after the first one and shut down on the second one...

What are others who have HSA doing?
(we don't want to do the restricted cards yet due to costs from our service provider)

Thanks
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#1104248 - 12/31/08 04:01 PM Re: HSA's - argh... RBanker
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
You cannot pay a HSA into the negative. It would be like overdrawing an IRA. You would have to collect outside of the HSA, as it would have excessive contribution implications.
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#1104251 - 12/31/08 04:02 PM Re: HSA's - argh... RBanker
critter586 Offline
New Poster
Joined: Dec 2008
Posts: 20
Minnesota
1) At least in MN - HSA accounts are exempt from consideration as a transaction account. Therefore - we still open the account and provide all the services requested.
2) Most of our HSA transactions are via POS - and we would have the same issue - but simply have not encountered NSFs on our HSAs yet. Our HSA balances seem to just be going up...

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#1104401 - 12/31/08 06:03 PM Re: HSA's - argh... RBanker
Jenni G Offline
New Poster
Joined: Dec 2008
Posts: 2
Indianapolis, IN
We have the same concern. Our HSA's are checking accounts that have checks and debit cards. Therfor the can possibly overdraw the account. I have not seen this happen yet. Our policy is if they have a record we still cannot open an HSA account. But we are working on providing a second chance HSA account for those with chexsystems. It is similiar to our Bounce Back Checking that is for those with a record.

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#1105050 - 01/02/09 09:33 PM Re: HSA's - argh... Jenni G
chgogal Offline
Member
chgogal
Joined: Mar 2003
Posts: 71
Illinois
We have run into this situation and have opened the HSA but did not give a debit card. And, any items coming through that overdraw the account are returned.
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#1105083 - 01/02/09 10:17 PM Re: HSA's - argh... chgogal
RBanker Offline
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RBanker
Joined: Jul 2003
Posts: 2,675
Austin Texas
I think that's what we'll do - first, I'll need to write HSA transaction account specific procedures that will detail both limiting ability to receive a debit card based on e-funds report (this begs a new question - because we're making that decision based on information from e-funds, do I have to give the customer an e-funds denial letter? I don't think I do because I'm still opening the account) and implementing a two-strike, your debit card gets shut off.

Thanks for everyone's input.
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My comments are absolutely no reflection of, nor influenced by, my employer - take them at your own risk.

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#1105181 - 01/03/09 02:45 PM Re: HSA's - argh... RBanker
rlcarey Online
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rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
"I don't think I do because I'm still opening the account"

Yes you do, you are taking adverse action by not issuing the debit card.
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#1114263 - 01/21/09 05:30 PM Re: HSA's - argh... rlcarey
Tberry Offline
Member
Tberry
Joined: Mar 2002
Posts: 84
Kansas
"yes you do, you are taking adverse action by not issuing the debit card."

Are you saying that you can open the account but if you deny them a decit card you must send an adverse action? If so is this Reg. B or what regulation?

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#1114418 - 01/21/09 06:54 PM Re: HSA's - argh... Tberry
MN Banker Offline
Platinum Poster
Joined: Aug 2006
Posts: 980
It's FCRA - you used information in a consumer report to deny them a debit card.

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#1114534 - 01/21/09 08:59 PM Re: HSA's - argh... MN Banker
rlcarey Online
10K Club
rlcarey
Joined: Jul 2001
Posts: 83,219
Galveston, TX
Specifically Section 603:

(k) Adverse Action

(1) Actions included. The term “adverse action”

(A) has the same meaning as in section 701(d)(6) of the Equal Credit Opportunity Act; and

(B) means

(iv) an action taken or determination that is

(II) adverse to the interests of the consumer.
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The opinions expressed here should not be construed to be those of my employer: PPDocs.com

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