In exchange for a customer opening a credit card, the LOB would like to offer a refund of overdraft fees assessed to a customer's DDA to a newly opened credit card (instead of crediting back to the dda). I don't believe this to be a tying issue since both are traditional bank products- am I missing something? Any other issues with doing this that I am missing?

To clarify- in most cases, this would/could create a credit balance, in hopes of generating card activity...

You will have to cut refund checks if the credit balance remains for more than 6 months.

Right- I pointed that out. More concerned with the general practice and if it presents issues just to do this.