Our processer has recently offered the ability to print card limits on the card carrier for daily spending amounts. Our cardholder agreement currently states we have limits on the number and amount of transactions, but for security reasons we don't disclose them in the agreement. From reading the Initial Disclosures section in E, I think, since the agreement and the carrier come in the same envelope, we've lost our ability to say we don't print the limits in the agreement due to security if we start printing the limits on the carrier. Does anyone have an opinion on this? Thank you.

1005.7
(4) Types of transfers; limitations. The type of electronic fund transfers that the consumer may make and any limitations on the frequency and dollar amount of transfers. Details of the limitations need not be disclosed if confidentiality is essential to maintain the security of the electronic fund transfer system.

How does not telling the customer their limits maintain the security of the electronic fund transfer system.???

What a good looking question.

I took a thoughtful walk and now I'm wondering... in what scenario would this "not disclosing limits to maintain the security of the electronic fund transfer system" apply?

There is an example in the commentary:

7(b)(4) Types of Transfers; Limitations

1. Security limitations. Information about limitations on the frequency and dollar amount of transfers generally must be disclosed in detail, even if related to security aspects of the system. If the confidentiality of certain details is essential to the security of an account or system, these details may be withheld (but the fact that limitations exist must still be disclosed). For example, an institution limits cash ATM withdrawals to $100 per day. The institution may disclose that daily withdrawal limitations apply and need not disclose that the limitations may not always be in force (such as during periods when its ATMs are off- line).

You would tell them $100, but if system were off-line and it allowed unlimited withdrawals, you would not have to mention it. Over the years since this portion of the regulation was written, much as changed in the debit card world.