We are considering becoming a depository bank for a store value card company. Basically all we would do is to hold the individual funds in one reserve DDA account. All the accounting, statement production and error resolution will be done by the card issuing company.

I've been asked to create an availability and error resolution disclosure for the monthly statement. Is this our obligated to make these disclosures? (e.g. Reg. E and Reg. CC) Would this not be up to the card issuing company?

I'd think it would be the responsibility of the company to provide disclosures. But, my understanding is that MasterCard is now requiring some if not all would-be non-financial institution stored-value issuers to have a financial institution act as issuer which brings the disclosures back into your arena. The "Visa Buxx" product is a widely marketed stored-value card. If you go to the Visa website and click through to the application page for Visa Buxx, you will find a number of bank-issuer's cardholder agreements and disclosures there for inspection. http://www.visabuxx.com/signup/parents.cfm

------------------
Opinions expressed by this organic, non-digital compliance resource are its own, not those of its employer, and should not be construed as legal advice.

[This message has been edited by Ken Holmes (edited 02-28-2002).]

Debbie: I would say NO WAY.

All you are doing is opening a business account for the stored value card company, right? How the business earns it income shouldn't affect you or require that you make these disclosures.

In addition, I'd be worried about the liability your bank is exposed to if you develop these disclosures and there is a mistake.

OH MY ! I wish I'd read Ken's excellent response before I spouted off!! Just goes to show ya...