With our HELOC product the customer is able to access the funds in numerous ways including accessing the funds with a debit card.

Would this, even though it is a HELOC, be considered a credit card account? Our confusion stems from 1026.2(15)(ii). Does this mean a HELOC is not considered a credit card account?

If it is a credit card account, then would it be subject to 1026.12(d)?

If it is then this would mean our contract could not contain right of setoff language. Correct?

Let's start with this question:

How can you access a HELOC through a debit card????

Our HELOC contract states the following:

"Advance Methods. You may request advances by the following methods:

You write a check.
You request a withdrawal in person.
You request a withdrawal by phone.
You request a withdrawal by mail.
You make a withdrawal with your ATM/Debit Card.
You authorize us to make a payment to a third person or another account."

I am not asking what your agreement says, I am asking how can you use a debt card to access a HELOC. Neither VISA or MasterCard allow their debit cards to be directly tied to a consumer liability account. What are the mechanics to use the ATM/Debit Card??

The card is actually a Discover card. The card is issued to a customer and tied only to the HELOC account. It can not be used to access any kind of deposit account.

Soooo.......you're saying the card in question "can not be used to access any kind of deposit account" and is "tied only to the HELOC account" isn't that a slam-dunk conclusion that it has to be a credit card?

Thus, it would it be subject to 1026.12(d) and our contract could not contain right of setoff language. Correct?

Note: I actually do agree it is a credit card, but am trying to gather as much evidence to support my position, so when I present this to management they will agree with me.

I would highly recommend that you check your Discover Card issuer's agreement. I highly doubt that they allow their debit cards to be tied to a consumer liability account. The error resolution requirements and responsibilities are much too different and their system, I am sure, are not set up to handle a card that can be either a debit or credit card. If you can do it, I would be very much surprised.

While what you describe is a credit card under Regulation Z, there are specific sections that do and do not apply to a home-equity plan subject to the requirements of §1026.40 that is accessed by a credit card.